Rent Guaranteed | When property prices go through the roof
Most of our landlords use our guaranteed rental income scheme. We have our own list of tenants waiting to move into properties. But just in case there is a void period, should happen, and for some reason your property should be without a tenant, we offer a rent guarantee scheme.
EVEN back in the mid-Sixties, the asking price of £17,000 for the property in up-and-coming Chelsea, west London, was a tidy sum. However as the same house now goes on the market for a cool £3million it must rank as one of the bargains of the century. Retired barrister Julian Bevan and his wife Bronwen, who are selling the six-bedroom home after 43 years living there, stand to make an eye-watering 18,000 per cent profit.
It is a stark reminder that down the years, despite a few blips along the way, there has been no better investment than bricks and Âmortar. If the same house in west London had risen at the rate of inflation it would today be worth only about £267,000.
Millions of other homeowners who took the plunge in the Sixties and Seventies before property prices boomed are sitting on goldmines. The average house price was just £4,000 in 1967, although it must also be pointed out that Âaverage wages were then £21 a week. Today there is no corner of the nation where property prices have not dramatically outstripped the cost of living. In London and other residential hotspots the profits have been even greater.
Nowhere in the UK has performed better than Chelsea over the past 40 years. A five-bedroom house in Markham Square near the famous King’s Road was bought for £67,000 in 1965 and sold for  £5 million a little over a year ago. For the owners it represented a 7,000 per cent profit.
“You have to remember that in the years after the war Chelsea was fairly grotty,†says Ed Mead, director of estate agents Douglas and Gordon. “The fashionable area was between Mayfair and the docks, whereas Chelsea was for arty types who did not have much money. Chelsea only started to take off in the Sixties. In 1978 you could still buy a two-bedroom flat in the area for £25,000. Now the same property would fetch £1.2million.â€
Also in London a converted church in Knightsbridge, which was sold for £1million by the Diocese of London 15 years ago, has just gone on the market for £50million. As part of the building is still used by the church it could be the world’s most expensive semi.
ONE of the most incredible price rises involves Kenstead Hall in the millionaires’ row of The Bishops Avenue, Hampstead. It was bought for £100,000 in 1973, sold to the Saudi royal family a few years later for £2.5million and is now worth an estimated £100million.Rent Guaranteed
Another classic example of buying at the right time in the right area is Sandbanks in Poole, Dorset. In 2005 a modest chalet bungalow valued at £6,000 in the Fifties sold for £3million which is an increase of almost 50,000 per cent. The house called Flintshore went back on the market two years later in the same state of disrepair for £4million.
It has now been demolished and replaced with a stunning modern home with views of the Isle of Wight and is on the market for £7million – that’s 116,000 per cent more than the original price in the Fifties.
A decent sized empty patch on Sandbanks would fetch more than £13million now – a cool 259,000 per cent increase since the Forties.
A local agent says: “After the Second World War you could hardly give plots away and they were changing hands for less than £5,000. Over time sea views became precious and as there’s no room to build more homes prices soared.â€
On our overcrowded island and with a rising population there are barely enough homes to go round so property will always be regarded as a sound investment.
In the past decade homeowners in the resort of Wadebridge, in Cornwall, have enjoyed the biggest price increases of all the UK’s coastal towns. Away from the coast, some of the sharpest rises have been in Lymm, Cheshire.Rent Guaranteed
Nitesh Patel, an economist with the Halifax, adds: “Since the late Sixties house prices have risen by close to 6,000 per cent. Even taking inflation into account some astronomical profits have been made, especially in London, the South and coastal regions. The big booms came in the Seventies and Eighties when it became easier to get mortgages and home ownership increased dramatically.†Taking other price increases into account, the Halifax calculates that house prices have risen in real terms by 273 per cent since 1959.
The emergence of the commuter belt also fuelled huge house price leaps in some areas. A four-bedroom detached home in Belle Vale Lane in Haslemere, Surrey, was bought for £4,000 in 1960. It’s now valued at £1.5million.
Among those to cash in, albeit on a more modest level, is the Chancellor of the Exchequer George Osborne who sold his second home Harrop Fold Farm, near Macclesfield, Cheshire, for a reported £900,000 last year. The Chancellor bought it for £445,000 in 2000, giving him a profit of more than 100 per cent in just over a decade.
TO give some idea of the amounts involved, if grocery costs had gone up at the same rate as house prices a pint of milk would now be £10, six bananas £8.47 and a chicken £51.
Homeowners were given a boost yesterday as new figures revealed average house prices have risen almost £7,000 in the past year to £230,078. According to LSL Property Services the average UK home rose £532 in March and dropped just once in the past 16 months.
If house prices and inflation had stayed at the same level for the past four decades the average house today would cost a mere £62,000. Small wonder that there are now more than 300,000 UK homes valued at more than £1million.
It’s claimed that the housing market, which has been treading water in many areas since 2009, has emerged from the financial crisis. According to the same report there is an army of first time buyers waiting to get on the property ladder.
It seems unlikely they will ever reap the same profits as the fortunate house buyers of the Sixties but if they’re willing to sit tight for a few decades who knows?
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