1. When is the best time to sell or let a property?
As with all industries influenced by wider macro-economic forces, there are peaks and troughs in the residential property market for sales and lettings. Typically over the years September has performed very well and always remains as one of the most buoyant months of the year. The months of December and January, on the other hand, are relatively quiet.
2. What major projects are happening in Canary Wharf and the Isle of Dogs at the moment?
There are too many to mention, however, we are witnessing some of the capitals most high-end developments approaching their completions in approximately 16-18 months from now. Developments include South Quay Plaza, Lincoln Plaza, and Baltimore Tower - all of which are located in the South Quay area of the Island.
In addition, Woods Wharf development is coming along well, representing 4.5million sq.ft of new homes, office and retail space – a highly desirable location for both investors and buyers (including buy-to-let).
Further east of Canary Wharf is City Island, a self-contained, 12-acre riverside development that is creating Docklands’ very own miniature version of Manhattan.
Further East in Canning Town, Hallsville Quarter has been attracting a lot of overseas interest and consists of a multi-phase development of 1, 2, and 3-bed luxury apartments and townhouses.
Just metres away from the Thames Barrier, Royal Wharf is also being marketed as “the new waterside village for London”. Royal Wharf is currently on the market with planning for 3,500 residential units.
3. How has the residential property market in Canary Wharf and East London changed since you first started your career in property?
Since the formation of the London Docklands Development Corporation (LDDC), Canary Wharf and the Isle of Dogs skyline has been a never-ending sea of cranes hoisted up by some of the UK’s most prestigious developers. However, it’s fair to say that the past 15 years have been the most prolific with developments such as Pan Peninsula, The Landmark and Discovery Dock (to name just a few) garnering a great deal of interest from both domestic and international buyers. The property market in Canary Wharf and East London has been relatively fluid for the past five years now, with an increasing level of interest from international investors and an ongoing rise in the demand for rental accommodation.
4. What type of properties are currently in demand for sales and lettings in Canary Wharf?
Residential properties in Canary Wharf are constantly in demand – not only from Canary Wharf’s elite workforce but also from students and those who work within central locations of the City. That said, we are only three weeks into the third quarter and we have seen our applicant levels rise by 27% compared to the same time last year, which indicates that demand is currently exceeding supply.
Demand for one and two-bedroom leasehold property and rental property during the autumn months in Canary Wharf (and for the property industry across the board) has always performed well, which is why anyone hoping to sell or let their property before Christmas should ideally arrange for their property to be marketed prior to the latter part of the autumn months.
5. How do you define the value of a property for sales or lettings?
There are several caveats that lend themselves to an accurate sales or lettings valuation. Most reputable agencies adopt similar methods and use similar resources to compile a property valuation. However, the difference in a correctly priced property and one that is somewhat ambiguous is defined by the valuer’s knowledge of the area / development.
At Vanet, it’s hugely important that we manage our client’s expectations, which is why we typically take into consideration (but are not limited to), the age of the property, its condition, historical sold/let prices from our database as well as publicly available databases such as the land registry. We also compare similar properties on the market within the development or area. No agency should struggle to sell or let a property that has been correctly priced, especially in today’s dynamic market.
6. Economists suggest that the Bank of England will raise interest rates within the next 12 months. What impact do you envision this will have on the residential property market?
Towards the early start of my career in residential property I recall operating in a market when interest rates were roughly 6 to 7.5%, property values declined, there was an oversupply of property stock and a scarcity of buyers. The current base rate of 0.5% has definitely helped to preserve fiscal stability in the UK since March 2009. On that basis I cannot envisage a half to a few points increase creating too much of a dampening effect for what has been a very buoyant and consistent market. It is certain that interest rates will surely rise in the near future, but in tandem with the UK’s economic recovery.
7. What trends have you witnessed with rental yields in London over the recent years?
Rental yields have slowly decreased due to the rise in property prices in London. However, the moderate rent increases over the last 4-5 years have prevented rental yields across the capital from plummeting drastically, and hence rental property across the City of London remains attractive for many buy-to-let property investors.
8. What rental yields do you consider to be strong for residential property investment in Canary Wharf right now?
Typically, yields over 5% are considered very strong for London right now, however – somewhat hard to come by. In terms of Canary Wharf, anything between 4.5 to 4.7% is considered very good at the moment. According to a recent bulletin from the ONS “London has continually shown higher annual growth in rental prices than any other region in the UK in the 12 months to June 2015 (the largest annual rental price increases of 3.8%)”.
In the last two years at Vanet we have seen rental yields in some of Canary Wharfs popular developments range between 4.1 to 5% for 1 and 2-bedroom properties, which is very respectable when compared to the rest of the Capital.
9. How can a landlord maximise their annual rental return?
Over the years I have seen various adjustments that can help to maximise a landlord’s rental return:
• Taking preventative action to reduce the possibility of a void period is crucial
• Up-keep of maintenance and keeping your property well furnished
• Qualifying high-calibre tenants
• Setting fair and realistic rental prices.
10. What are the benefits of buying a property off-plan?
These days it’s not uncommon for the vast majority of developers to have sold the entire development prior to its official launch or completion date, demonstrating that purchasing off-plan is becoming more and more desirable. I have overseen many off-plan purchases over the years, and it is well noted from feedback that the top three benefits to the buyer are:
• Opportunity to develop a relationship with the developer, thus allowing you to have some input on internal specifications and fixtures and fittings
• Securing a price in today’s market as opposed to the completion date, which can be in years’ time and by which point the value of the property may have increased considerably
• The joy of watching your new home/investment being built.