What does the launch of a new mortgage product aimed at the buy-to-flip market say about prospects for property prices in and around Wimbledon Village? More than you could ever imagine.
The fact small-scale mortgage provider OneSavings Bank, a business that was only established in 2011, has launched a finance package aimed at secondary investors in property developments shows confidence in the property market remains high.
As an independent estate agent that has been successfully marketing some of the finest residential property in south-west London and Surrey to buyers and tenants from home and abroad since 1987. Robert Holmes & Co could never recommend one finance product over another.
But the significance of this new product being offered in conjunction with mortgage broker John Charcol is that it shows the buy-to-flip market is back to a level of strength last seen before the financial crisis of 2008.
In those heady days, when it was not unusual to take a taxi from one end of the office to the other and claim the fare on expenses, investors who bought into off-plan developments would often sell on their holding to a secondary investor before the scheme was complete in order to cash in on any gain in value made.
And the secondary investors were still able to profit because the property in question was continuing to rise in value.
Robert Holmes & Co is more than aware that the number of new-build developments being sold off-plan is extremely limited in Wimbledon, Coombe, Kingston Hill, Wandsworth and other parts of the London and Surrey that we operate.
But the fact that this new mortgage product is only being made available for secondary investments in London and south-east England shows OneSavings Bank has confidence in the capital’s prospects for property price growth.
This confidence is shared by the Royal Institute of Chartered Surveyors, which is saying house prices in London and the south-east will continue to rise by 5% a year for the next five years.
These views contrast with the opinion of property economist Hansen Lu.
Mr Lu, who works for independent research company Capital Economics, claims the outlook for prime central London housing is “lacklustre” and “prices in the most expensive parts of the capital will struggle to do more than mark time” during 2016.
He warns that the relatively strong pound, global economic turmoil, the free-falling oil price and tax increases for high-value homes could paralyse the top end of London’s housing market over the next 12 months.
Robert Holmes & Co is an estate and letting agent, not a property price prediction business. We are unable to see into the future.
But we are sure that all the time the Bank of England’s base rate remains at 1% or below, London experiences economic growth and demand for property in sought-after areas of the capital outstrips its supply, homes in Wimbledon Village and beyond will hold their value at the very least and in all likelihood rise in price.
OneSavings Bank obviously thinks the same, otherwise it would not be fueling the buy-to-flip market by offering secondary investors the opportunity to buy into off-plan developments.
Here at Robert Holmes & Co, our experience of valuing and marketing some of the most desirable homes in Wimbledon, Coombe, Kingston Hill, Wandsworth and Surrey is only matched by our passion for property.
Our international reach means that we have a long list of buyers and tenants who have expressed an interest in a property like yours. For an up to date valuation of your home, contact Robert Holmes today.