The government announced yesterday that the HS2 rail-link between Birmingham and London is to go ahead at a cost of £33billion. 65% of the responses to a consultation mentioned property, and at Manse & Garret Property Search we too are interested to see what the affect will be on property prices in London, Birmingham and along the route.

The link is expected to cut journey times between London and Birmingham by 30 minutes. Commuters who traverse this route will benefit from shorter journey times but it is the disruption during construction and the on-going noise created by trains travelling at speeds of up to 225mph in 2026 that is causing concern for property owners.  A Department of Transport Report from 2009 predicted that 21,300 households would experience an increase in rail noise, which in our experience is not what people look for when buying a house.

If your house is under the route then you can expect to receive a compulsory purchase order from the government, however not until 2015. The government has promised that property will be purchased based on the open-market value, “as if unaffected” by the scheme. Owners will also receive a home loss payment of 10% of the property’s value and reasonable costs will be paid. The problem with this is that many of the affected areas have already experienced a decline in house prices because the scheme has been years in the making and it is not clear if these home owners will be bought out at pre-HS2 prices.

Perhaps those in a worse position are those whose homes will not be considered for compulsory purchase, but who will be affected by the noise.  The government says that 3,100 properties will experience a “noticeable” increase in noise. Homeowners will be able to claim for any loss of value on their property resulting from noise, vibration or artificial lighting, but only once the railway has been open for a year. There is no amount of secondary glazing or sound proofing that can help you to enjoy your garden in peace and quiet and it is these homeowners who may have trouble selling their properties even at lower prices. The good and influential people of Primrose Hill were successful in making enough of a fuss so that the proposed route under Primrose Hill was changed so that they would not be negatively affected by vibration from the trains. Unfortunately the good people of Belsize Park have not been so lucky, Adelaide Road, Fellows Road and Eton Avenue are now likely to be affected instead.

What will happen to property prices in Birmingham and London? The value of property in Birmingham is likely to increase, as demand for property in Birmingham increases, becoming more attractive to those who may not have considered commuting this distance before now. As for London, will an extra rail-link into Euston boost property prices in this area? It’s unlikely that there will be that much of an increase; Birmingham is not as enticing a location as Paris and so proximity to this rail-link is unlikely to be at the top of many property buyers’ wish lists.

Technorati Tags: Birmingham, high speed 2, House Prices, House prices in London, HS2, London Buyer's Agents, Primrose Hill

Tags: Birmingham, high speed 2, House Prices, House prices in London, HS2, London Buyer's Agents, Primrose Hill

Sometimes I wonder if we do the right thing extolling the virtues of prime central London real estate to risk averse overseas buyers looking for good capital appreciation and a safe haven for their hard-earned cash.  As London Buyers Agents, we do most of our business in prime established areas but we also buy in other areas of London including Hackney, Islington, Greenwich and Blackheath and others.

City buyers like Islington and parts of Hackney for the 20 minute commute to Bank.  Canary Wharf workers like Greenwich and Blackheath for similar reasons.  One of our Clients can get from his front door to his desk in 17 minutes.  But all of these areas were hit in the downturn and in our view Islington agents were the first to lose face back in 2007 when Lehman Brothers went down and Northern Rock followed.  So we tend to suggest prime areas, which are likely to weather future storms much better.  And are relatively immune to rioting.

As I write, the skirmishes in Hackney look relatively minor but this London Buyers Agent is under no illusions that we may see a different picture in the morning.  During the first six months of the year, Hackney house prices had increased by 4.1%, the third highest house price rise by borough across London according to the Land Registry.

Islington has also been a winner to date, with prices rising 5.5% year on year, but there was rioting there too at the weekend and now we hear Highbury resident BoJo is cutting short his holiday and  coming home to save the day.

Likewise, Lewisham which incorporates a small part of Blackheath and is the closest DLR to some of the lovely heath facing properties in West Blackheath, has seen violence today.  Property prices overall in the borough had increased by 3.2% year on year to June, but this rioting underlines the issues about the area.  One of our Clients who settled in Greenwich was considering moving to Lewisham at one point.  We strongly suggested they settle at least initially in Greenwich or Blackheath, which was admittedly more expensive, but what price do you put on safety?

I bet they are grateful today that they listened to our advice and although they paid more than they wanted to, we negotiated a significant proportion off the rent.

So I don’t regret being firm about areas with Clients.  Our job as London Buyers Agents is to find perfect properties on and off-market, negotiate great deals for our Clients and make sure they are buying in the right area for them in the first place.  London is a series of villages and although confidence and house prices in affected boroughs will almost certainly be hit, there is sure to be the right village for you.

Technorati Tags: blackheath, Hackney house price rises, Hackney house prices, hackney riots, House Prices, Islington house prices, Islington riots and house prices, islinton riots, lewisham house prices, lewisham riots, London riots

Tags: blackheath, Hackney house price rises, Hackney house prices, hackney riots, House Prices, Islington house prices, Islington riots and house prices, islinton riots, lewisham house prices, lewisham riots, London riots

Stamp Duty Allowance

Announced in March 2010 by the Labour Party, the increase in the stamp duty on residential property purchases over £1,000,000 increased on April 6^th from 4% to 5%. This increase is intended partially to fund the tax gap created by doubling the stamp duty allowance for first time buyers to £250,000.

One effect on the housing market in London has been that although property has come to the market between January and March, there has been no shortage of prospective buyers, particularly at the top end of the prime central London market, encouraged by bonus figures being released at the start of the year. Selling and buying has been frantic; the prospect of paying an extra 1% on top of a purchase has put pressure on people to move before April. There have been bids and good offers on those properties which have been reasonably priced at the beginning of this year. We have seen properties selling at and above asking price before they have even fully come onto the market – not quite at 2007 levels, but certainly reminiscent of the pre-crash boom.

A consequence of this is that the dearth of property is now even worse than it was at the beginning of the year, and there remain many frustrated high-end buyers, not best pleased by the knowledge that the purchase of a home will cost them upwards of £10,000 in additional tax.

It is likely that the 5% stamp duty will be with us for the foreseeable future, as the government needs the revenue and luxury, top end property is an obvious source for it, to a government conscious of its electoral viability. The majority of buyers at the top end of the market who are most likely to be affected by the increase in stamp duty will be the plethora of overseas buyers and will not be a part of the electorate.

The shortage of property exacerbates the demand in prime central London and key towns in the South-East, where property remains a favourite with overseas investors. The unrest in the Middle East and the recent declaration by Portugal will encourage investors further into the prime central London market which continues to be perceived by most as a comparatively safe place to invest in property.

Technorati Tags: First time buyers, House Prices, House prices in London, investors, London property, London property market, london property market news, property investors, Stamp Duty

Tags: First time buyers, House Prices, House prices in London, investors, London property, London property market, london property market news, property investors, Stamp Duty