Heaton & Partners Newsletter · Heaton & Partners Newsletter Caveat emptor? Or ‘buyer beware’ in this market! 2016 saw the double whammy of Brexit and increases in Stamp Duty

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Heaton & Partners Newsletter

Caveat emptor?Or ‘buyer beware’ in this market! 2016 saw the double whammy of Brexit and increases in Stamp Duty

put the brake on the market with transactions down 40% in London and fewer deals in the country too.

While reports of values stagnating proved to be wrong in most places some prime London locations

did see negative movements after many consecutive years of growth.

Looking to the 2017 market, now with the added complication of a snap General Election, commentators offer a

plethora of forecasts but most seem to agree that growth in values will be slow but steady in the next 12 to 24 months.

Both buyers and sellers can be left hanging with a desire to move home or invest, but are unsure of values

and timing. A complex market such as this really does need expert help for the buyer. Which areas offer the

best value? What is a realistic price for any individual property? How can you be sure that you are making the

right investment at the right time?

Vendors and their agents also know that when a buying agent like us approaches them we

are acting for buyers who are almost always ‘chain free’, which makes dealing with us a strong

prospect. The return of property chains has caused many vendors stress and frustration and

the quality of our buyers ensures we can agree the best possible deals.

My team and I spend our working lives dealing with buyers, vendors and their agents.

We are very sensitive to the nuances of the market and offer a full report on any target property illustrated with

all comparable evidence. Only when you see recent market activity and analyse the comparables can you be

assured a value is correct.

May 2017

We are very sensitive to the nuances of the market

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Of the many properties we have purchased over recent years, each has been assessed for value. Only when

we are clear on what the price should be – as opposed to the price being asked – do we then engage with

the vendor and negotiate the best possible deal. But the buying decision is rarely solely about negotiating the

best price. It is usually about finding a property they couldn’t otherwise find and securing it. That isn’t to say

we don’t try and negotiate the best deal, but for the best of the best, it is very rare for those properties to be

sold cheaply.

Property remains one of the best performing asset classes in the UK and the mid-term outlook is strong, as

supply is unlikely to ever meet demand on this small island. The likelihood of a lower pound has also served

to stimulate strong overseas demand, but buyers must beware in this climate and make sure all the facts have

been checked before making that crucial purchase decision.

What is the outlook for 2017?I see the decision to hold a General Election in June as a positive for the property market, particularly as

the snap nature of the announcement means that there has been no long build up with buyers and sellers

wanting to hold off.

So with the outlook for 2017 remaining positive and the General Election unlikely to cause a slowdown, where

do we see values moving? While Savills see a flat line, all other commentators anticipate a positive movement

of up to 4%.

May 2017








Below is a summary of the views on the 2017 UK Property Market as a whole.

In terms of the Prime London market the consensus indicates unchanged values in 2017.

Within these London forecasts the sub markets have their own dynamics. The sub £2m market is still strong

and there have been some good deals in the £20m+ market. It is the interim market that has experienced

most adjustment.

Whilst Savills only expect to see a 1% increase in the prime country market in the south of England this

year, we anticipate that the best of the best will see more significant increases. Such is the lack of quality

stock in counties like Oxfordshire, Gloucestershire, West Berkshire and Hampshire that the best of the best will

continue to sell well and at increasing prices.

While the economic and political backdrop remains uncertain in the wake of Brexit, tight supply, high levels

of employment and very low borrowing costs are acting as a floor under prices. Sterling weakness will also

continue to attract foreign buyers, again bolstering prices.

So the view is that 2017 will see continued growth in the general market, and prime property will also continue

to grow in its sub markets.

2017 Forecast %

Capital Economics 2

John Charcol 1

RICS 3

Nationwide 2

Halifax 1–4

PWC 1

Savills 0

Knight Frank 4

Office for Budget Responsibility 4

Prime London 2017 %

Savills 0

Russell Simpson 0

Knight Frank 0

May 2017








Bank of Mum & DadMuch coverage has been given to the need for parents to help their children onto the first step of the property

ladder, especially in London, with first time buyers facing the highest multiple of earnings per property ever

seen. The rise in prices has led many young buyers to move on from trendy enclaves such as Fulham and

Islington and start looking in other areas such as Shoreditch and Brixton and other previously overlooked areas

in developments firmly aimed at younger buyers.

As a parent bankrolling all or some of the equity in such deals there are a few key points to consider. Firstly does

the location and transport work to enable jobs / universities to be reached and social lives continued? Key rail

routes dictate the options and the addition of new routes such as Crossrail and HS2 can indicate newly accessible

areas offering better value for money.

Then the question of whether new build or resale property offer a better investment? The advantage of new

build is a ‘turnkey’ proposition requiring little or no work before occupation. Often the resale will be a ‘fixer upper’

which is great for adding value but intensive DIY can be a strain for some 20 somethings. New build apartments

also tend to be more liquid in the sense that they are easier to sell in a few years when the next step is being taken

on the ladder. The new build price premium does have to be factored into the equation, but the convenience of

such units can make a compelling proposition.

We can help both the parent and child (do they ever grow up?) identify the best opportunity and advise on the

finance options. Not having the parents’ name on the deeds saves the 3% stamp duty premium for a second

home. Sub-letting a second bedroom to a friend can also make inroads into the monthly mortgage payments.

Careful analysis should result in the successful launch of another home owner. In terms of a return for the Bank

of Mum and Dad, be assured it awaits in heaven only!

May 2017








Now is the time to act for schoolsSeptember may seem a long way off but if you are planning to move your child’s school and this will require

a house move, now is the time to act. Competition for state and private school places is strong and the right

home is key part of the equation. So, if you are planning a change in schools this year, do not delay.

Heaton & Partners add to senior teamWe are delighted to announce our continued expansion with the arrival of two more senior members to

the team.

May Rahmani joins to give more coverage to Heaton & Partners’ property search team in the North Surrey and

East Berkshire area. May has over 10 years of experience in both buying and selling property in these areas and

her track record, in addition to owning her own property search and acquisition business, includes Royalton

Ltd., Harrods Estates, Sotheby’s International Realty and Savills.

Charles Phillpot also joins Heaton & Partners this month, to play a key business development and marketing

role. Charles was with Savills for 20 years as Marketing Director and was part of the management team that

grew the company to the premier position it occupies today. In addition to responsibility for the Marketing

and PR for the Savills brand, Charles also ran the Development Marketing function. Charles will focus on

developing the Heaton & Partner business in the UK and overseas and increasing its media footprint.

May 2017






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Heaton & Partners Newsletter · Heaton & Partners Newsletter Caveat emptor? Or ‘buyer beware’ in this market! 2016 saw the double whammy of Brexit and increases in Stamp Duty