With most West Hampstead families home schooling their children in lockdown and the forthcoming Stamp Duty Holiday deadline on the 31st March 2021, less West Hampstead properties have been coming onto the West Hampstead property market since the new year. This has prompted a 7% drop in the supply of West Hampstead (NW6) homes for sale compared to November 2020.
For the past couple of decades, like clockwork, West Hampstead estate agents’ busiest times for putting property onto the market is the new year to Easter rush, with a smaller flurry of new properties coming onto the market in the mid/late summer. Yet, since the ending of lockdown 1.0 in the late spring 2020, nothing has been normal about the West Hampstead property market.
Throughout the summer, the number of properties coming onto the market in West Hampstead steadily rose to its peak in November and the number of properties then becoming sold subject to contract (stc) rose even higher (and whilst statistics don’t exist for the properties sold stc, anecdotal evidence suggests there were just under 50% more West Hampstead properties sold stc in the last six months of 2020, compared to the same 6 months in 2019).
However, back to the number of properties for sale…
The peak of the number of West Hampstead properties on the
market in autumn was 852 – that now stands at 789
The first lockdown caused many West Hampstead homeowners to want to move with the need for extra space to work from home and in some cases larger gardens. This was further exacerbated by West Hampstead home movers also trying to take advantage of the Stamp Duty holiday to save themselves money on this tax on moving home.
This meant many more West Hampstead properties came onto the market (more than a “normal” year) in the last 6 months of 2020. However, those West Hampstead home movers motivated to move for the extra space/save money on the tax, did so in the summer/autumn and have already placed their West Hampstead home on the market (and are probably by now sold stc rushing to get their house purchases through before the deadline on the tax savings).
So, how does West Hampstead compare to other property markets, and what does this recent decrease in West Hampstead properties on the market mean to West Hampstead homeowners and landlords?
There are 49% more properties on the market today in
West Hampstead, compared to 12 months ago.
Interesting when compared that to the London and national picture. There are 39.5% more properties for sale than a year ago in London, whilst nationally, according to Zoopla, there are 12% less properties on the market today (compared to a year ago). Yet it gets a lot more interesting when you look at what type of property is on the market in London.
There are currently 47,900 apartments for sale in London compared to January 2020, when there were only 32,600 – a rise of 46.9% … all the more interesting when there only 15.1% more London semi-detached houses for sale and 1.8% more London detached homes over the same 12-month period.
The jump in London apartments for sale is being pushed by an upsurge of London up-sizers eager to trade their city living apartment up to suburban houses, and a small handful of panicky London buy to let investors who are wanting to exit the London property market following falling rents for apartments. Looking closer to home in West Hampstead, there are…
55% more apartments for sale in West Hampstead than a year ago,
whilst there are 42% less semi-detached homes
So, whilst there are some differences between the supply of individual types of property in West Hampstead (e.g. apartments vs semi-detached houses), the overall reduction in the number (i.e. supply) of properties for sale can only mean one thing, when there is a reduction in the supply of anything and demand remains stable, this will mean a decent level of upward pressure on West Hampstead house prices in the short term (although I suspect there will be some downward pressure on West Hampstead apartments with that level of increase in supply).
Will overall demand for West Hampstead property continue to be
Lockdown 3.0 will probably cause another wave of West Hampstead people who want to move home (thus increasing demand). The last property crash (the Credit Crunch in 2008/9) was caused by a huge increase in the supply of properties for sale in London when people lost their jobs and interest rates were much higher. People couldn’t afford their mortgages and so dumped their homes onto the market all at the same time – causing an oversupply of property for sale and hence house prices dropped.
The number of London properties for sale increased from 66,250 in
early 2007 to 100,200 in May 2008, a rise of 51%
It was this increase in the level of property for sale in London that caused West Hampstead property prices to drop between 16% and 19% (depending on the type of property) in West Hampstead over the 12 to 14 months of the Credit Crunch. So, whilst the West Hampstead property market is slightly top heavy with apartments, as long there is no sudden change in the demand or supply of properties and interest rates remain at their current ultra-low level – the medium-term prospects for the West Hampstead property market look reasonably good (especially semi-detached homes).
If you are a West Hampstead homeowner or a West Hampstead buy-to-let landlord and want to chat about the future of the West Hampstead property market – do drop me a line.