For years Clapham Common has been a magnet for young professionals. Stroll across the green on a sunny Saturday afternoon and you’ll see clusters of them sprawled out on the grass. It’s got a lively social scene, it’s got good transport links and it’s got a median age of 31, according to the last census. But change, it seems, is afoot in its fresh-faced property market.
Since the introduction of the 3 per cent stamp duty premium on second homes in April 2016, Clapham’s buy-to-let market, which accounted for around 60 per cent of Marsh & Parsons’ sales, is now “dead”, says Alex Philo, senior sales manager at the estate agency.
Robert French, head of Knight Frank Clapham, agrees. “We don’t really see buy-to-let investors any more,” he says. He estimates that their market share has halved. It’s not just the change in stamp duty — and the cutting of mortgage interest tax relief — that killed off buy-to-let in Clapham. Developments in neighbouring Battersea and Nine Elms, where some 16,000 homes are being built, have also been stealing the market. “I think a lot of people who are buying to rent out are focusing purely on [Nine Elms] — it’s very low maintenance,” says French.
Fortunately for local estate agents, the property market in Clapham has a trick up its sleeve. “We have seen a humongous rise in the ‘bank of mum and dad’ market,” says Philo. Parental support is now the country’s ninth biggest mortgage lender, according to Legal & General. Across the country, 62 per cent of under-35s will have help from friends and family when purchasing a home. In Clapham, Philo estimates that something close to 60 or 70 per cent of his deals in the past quarter were financed with parental support. “There are 20-something-year-olds buying these £800,000 flats,” he says.
On Abbeville Road, Kinleigh Folkard & Hayward is selling a two-bedroom flat with a garden for £750,000. A two-bedroom apartment on Windmill Drive is on the market with Marsh & Parsons for £1m. It has triangular bay windows looking over Eagle Pond.
Around half of the property market in Clapham is going to first-time buyers, says Robin Chatwin, head of Savills South West London, and about 75 per cent have support from relatives.
One buyer, says French, was making a purchase for their three-year-old daughter. The bank of mum and dad is in many ways a new form of investment, he says. Homes are bought in the child’s name, but parents will often sublet rooms to their children’s friends, or collect rent on the property until their children are old enough to move in.
Good schools, the 220-acre park and easy access to the Northern line, make this part of Clapham the sort of place parents would probably like their children to live, and it is also a hotspot for young families, says Chatwin who, he estimates, account for 40 per cent of the market.
Relative value is another pull factor, he adds. According to Savills’ second-quarter prime London index, the average price per sq ft in Clapham is £790, which compares favourably with the prime south-west London average of £830, and is 17.7 per cent cheaper than neighbouring Battersea.
“Particularly in the old town we have sold houses to people who have moved from Marylebone, Fulham and Chelsea,” says French. “We get a lot of families who are trading up in size.”
Even they can’t limit the fallout from the London property market’s current strop. Home values fell 2.1 per cent in the year to the 2017 second quarter, according to Savills’ prime London index — which, compared with the 5 per cent drop in south-west London and 6.8 per cent in prime central London, looks pretty resilient. According to Land Registry data compiled by Knight Frank, though, transactions above £500,000 in the 12 months to April 2017 saw a 25.4 per cent drop year-on-year.
Unsurprisingly, there are some reductions around. John D Wood is marketing a two-bedroom converted coach house overlooking communal gardens on Crescent Grove, which came to the market in February at £1.1m and is now on sale for £900,000 — a reduction of nearly 20 per cent. Some vendors find alternative solutions. Knight Frank is marketing a two-bedroom flat on Clapham Common North Side with a roof terrace for £1.5m — with 50 per cent of the stamp duty paid by the vendor.
Higher taxes mean a greater demand for homes in need of doing up, says French, as buyers prefer to save on tax and splurge on refurbishment. Roughly 20 per cent of the housing stock is un-modernised, he estimates — “it’s not uncommon to have people fighting over them”.
Homes overlooking the Common are particularly popular. According to Savills, being within 50 metres can add 15.5 per cent to home values. It might well have boosted the price of the eight-bedroom Georgian house on sale on Clapham Common West Side. It has views over the common, as well as a grand entrance hall, a billiard room, a wine cellar, a self-contained flat and a 32ft indoor pool. It’s on the market with Savills for £12m.
- According to Savills, prime home prices in Clapham have risen 53.8 per cent in the past 10 years, compared with 35 per cent across prime south-west London
- Local private schools include Eaton House The Manor, Thomas’s Clapham, Parkgate House and Ecole Wix, which is a feeder for the Lycée in Kensington
- The average second-hand sale price in Clapham Common is £848,601, according to Land Registry data compiled by Savills
What you can buy for . . .
£500,000 A one-bedroom flat near the high street
£1m A three-bedroom flat with garden
£6m A grand seven-bedroom Victorian house with views over the common
More homes at propertylistings.ft.com
Main photograph: Alamy