Buy-to-let: the background
When people are unable to get onto the property ladder or uncertain about moving, they end up renting for longer periods. This surge in tenant demand leads to more competition for rental homes, and therefore, higher rents.

Landlords end up making a tidy profit, which encourages them to expand their property portfolios. A buy-to-let bounce-back also entices new buy-to-let investors to put their money into property.

With the number of buy-to-let loans reaching its highest level for four years last year (2012), record rents propelled landlords into expanding their property investments.

According to the Council of Mortgage Lenders (CML), gross buy-to-let lending hit £16.4 billion over the year, up 19% on the £13.8 billion lent in 2011.

Overall, 136,900 loans were offered last year, the highest number since 2008 – although still a long way off the high of 346,000 seen back in 2007.

Average UK rents have soared by 13.6% since 2009, with a further rise of 2% predicted this year (2013).

In addition, the number of UK households renting has increased over the past decade from 31% to 36%, according to the latest Census data.

This means there’s great demand for rental homes in many places. In London’s Westminster alone, four out of every 10 homes are privately rented.

Savills predicts that London rents will rise by 26.4% over the next five years, more than anywhere else in the UK.

What is a buy-to-let mortgage?
A buy-to-let mortgage is money offered by a lender (a bank or building society) to fund a property that will be rented out. The borrower will not occupy the property.

How does a buy-to-let mortgage differ from a regular residential mortgage?
The difference between a buy-to-let mortgage and a standard residential mortgage is how the borrower’s income is assessed.

Instead of looking at your earned income, a lender views potential rentals income as your primary income source. Some lenders might also take the landlord’s personal income into account.

As different lenders assess this in different ways, you must compare all of the deals on offer.

How do buy-to-let mortgages work?
Typically, lenders will want your anticipated rentals income, verified by independent sources, to meet at least 125% of the monthly interest payments on the loan. This will be based on the pay rate for fixed and tracker deals, or a lender’s standard variable rate (usually an extra 1%, or more).

This is to ensure landlords (and the lender) is covered during void periods when the property is empty and not rented out. This reassures the lender that the borrower will still be able to meet the payments.

Lenders generally lend mainly to those with large deposits, with most deals expecting you to put down at least 30% (or even 40%) as a deposit. The best deals are at the lowest loan-to-value rates of 60% or below.

Loan fees
Buy-to-let mortgage fees that secure the best rates are usually not low. A top fixed rate deal could have a loan fee of 2.5% (£2,500 on a £100,000 mortgage, for example), or higher.

Those deals with higher interest rates will charge lower loan fees.

Before signing up for a loan, you need to make sure the high loan fee you’re paying is worth it. Many loans attract such high fees a higher interest rate might be a better choice.

Rentals returns
Try to achieve a five percent return on your rentals investment every year. Some properties might reap as much as 7% annually.

Does the type of tenant matter?
The type of tenant renting your property can make a big difference.

For instance, many lenders have restrictions on mortgages for student lets and homes of multiple occupancy (HMO’s).

At least three tenants live in an HMO building, forming more than one household and sharing toilet, bathroom or kitchen facilities.

Tax implications
Unlike residential property, a buy-to-let property is not exempt from capital gains tax. Also, rent received is regarded as taxable income.

However, you can offset interest payments on your mortgage against tax on rentals income, along with other expenses (such as agent’s fees and some maintenance costs).

It makes good sense to get advice from your accountant before you take out a buy-to-let mortgage.

Agent’s fees
Lettings agents can find tenants for you and look after the tenant and your property.

This could include anything from carrying out a credit check on a potential tenant, drawing up a contract, putting together an inventory of contents and the condition of the property when let, to arranging for someone to fix a broken boiler and chasing up money from an errant tenant.

There are mandatory health and safety gas and fire inspections and precautions to be taken. An agent can handle all of this for you.

Lettings agents typically charge about 11% to 17% in fees, and sometimes a one-off charge to locate tenants.

Property investment funds
You don’t have to actually buy a property outright in order to be an investor.

There are a number of property funds, some of which put investors’ money into residential property.

Putting your money into a bigger residential property fund could be a low-cost and stress-fee way to get income from letting property.

Many property fund investments can be purchased through an ISA, which cuts down on income and capital gains tax.

Zoopla’s buy-to-let tips

• If letting to students, you can convert the living room into an extra bedroom, increasing the number of tenants – and your rentals income.
• Modernised properties tend to let quicker and for more money than older homes.
• Check tenant references thoroughly, including credit checks and guarantors.
• Always clean and redecorate after a long tenancy.
• Don’t be greedy. It’s better to hold onto a good tenant paying a sensible rate, rather than ousting them in the hope of someone (probably more demanding) paying more.
• You might find yourself competing with other buy-to-let landlords if you buy on a big development. Either make your property stand out, or consider buying on a smaller site.
• Choose locations near good transports links, a variety of employment and appealing shops and restaurants
• It might be less expensive to remortgage your own home when borrowing money for buy-to-let, rather than getting a buy-to-let mortgage. Get advice from a financial expert.
• Match the tenant to the area. If you live near a good state school, for instance, you could do well renting to families. And young professionals are attracted to areas with lively bars and a good arts scene.
• When choosing a lettings agent, make sure he or she is a member of the Association of Residential Letting Agents (ARLA) and/or the National Approved Lettings Scheme, (NALS).
• Look for the next ‘hot spots’ where regeneration, new transport links and employment opportunities are in evidence.
• Prime property holds its value better in a downturn.
• New research shows that period homes hold their value better than new-build property.
• Ask yourself if you can still afford to pay your buy-to-let mortgage if you lost your job, had your hours cut or fell ill?
• Factor in extra cash for maintenance (if you don’t replace that worn carpet every so many years you won’t get a quality tenant).
• If you can manage the property yourself, or even carry out some of the maintenance and repairs, you will make a larger profit.
• Provide a small ‘welcome pack’ (tea, milk, bread, cheese, biscuits, information about the area, and a chilled bottle of wine) for the new tenant. This will help kick off your relationship with the new arrival – hopefully, leading to a long and prosperous
• tenancy.

Whilst every effort has been taken to ensure the above information is up to date, some inaccuracies may occur.

Plenty of good-size homes, a local surge in house prices and retail therapy at Westfield make arty Shepherd’s Bush a favourite with first-time buyers, investors, and couples with young families.

Shepherd’s Bush is four miles west of central London and sits south of  Westway and north of Hammersmith, with Holland Park to the east and Acton to the west. It was probably the place where drovers rested their flocks on the way to Smithfield Market.

At the heart of Shepherd’s Bush, the Green – marooned by surrounding  traffic – recently had a £2 million facelift. Two new playgrounds were installed and a tree-lined boulevard was created, while the listed war memorial was reset on a granite plinth.

Houses and flats for sale in Shepherd’s Bush: Houses are mostly Victorian terraces. Many of the larger properties have been converted into flats but there is also a good supply of family houses. Prices range from over £2 million for a five-bedroom terrace house down to around £200,000 for a studio flat.

The district is an arty one, having attracted a large number of BBC workers over the years. The Television  Centre building was sold to developer Stanhope in 2012 and much BBC output has moved from White City, but these design-conscious owners left a legacy of attractively modernised houses.

Travel: Shepherd’s Bush has excellent transport links and all stations are in Zone 2 with an annual travelcard to Zone 1 costing £1,256.

Shepherd’s Bush is on the London Underground Central line, the London Overground to Clapham Junction, and Southern offers fares to Milton Keynes and between East Croydon and Shepherd’s Bush. White City Tube station is on the Central, Hammersmith & City and Circle lines, while Wood Lane, Shepherd’s Bush Market and Goldhawk Road are on the Hammersmith & City and Circle lines. Bus services include the C1  to Victoria, the No 49 to Kensington High Street and Chelsea, the No 94 to Oxford Circus and Piccadilly Circus, and the No 148 to Marble Arch and Westminster.

The area attracts: according to Dylan James of the local branch of estate agent Faron Sutaria, price per square foot in Shepherd’s Bush is between £700 and £900, which is cheaper than nearby Fulham. Many home buyers who start their search in Fulham often end up in Shepherd’s Bush, happy to find themselves in a cultural hotspot with excellent transport links.

Buyers are mainly first-timers, investors, and couples with young families, although there is now a smattering of international buyers who like the idea of being close to the Westfield mall.

The prospect of massive regeneration in the White City Opportunity Area is also attracting buyers to Shepherd’s Bush. This 20-year plan could see up to 4,500 homes built and plans are afoot for a new Imperial College campus and an extension to Westfield, including a John Lewis store. The former BBC Television Centre is to be transformed into more than 1,000 homes and a hotel after plans were approved in December.

Staying power: a strong surge in local house prices – 12 per cent last year – has led some families to sell up and move out of Shepherd’s Bush. Typically, young couples stay for three to five years, moving further west or north in search of more green space when they start a family.

Best roads: families make a beeline for houses in Boscombe Road and the Coningham and Lime Grove conservation area, the triangle of streets between Uxbridge Road and Goldhawk Road. Ashchurch Park Villas in the Ravenscourt and Starch Green conservation area is particularly desirable.

The most expensive house in Boscombe Road sold last year for £2 million and in Ashchurch Park Villas the top price was £2.95 million, reached in October 2012.

Up and coming: gradually gaining popularity is the “Flowers Estate” south of Westway and east of Old Oak Road, a garden estate of simple Edwardian houses where street names include Wallflower, Daffodil and Orchard Streets. Estate agent Faron Sutaria has a six-bedroom house for sale on Foxglove Street for £580,000.

History: a sepia postcard shows what looks like an opulent, alabaster compound, perhaps the home of some Indian prince during the days of the Raj. There are gleaming colonnades, onion domes, canals and lakes. Today, this same spot is home to Westfield London shopping centre where Gucci, Louis Vuitton, Miu Miu and Prada echo the extragavant past.

Westfield London was built on a long-derelict plot in Shepherd’s Bush and no one alive remembers the wonders that went before. This was the site of the Franco-British Exhibition of 1908, which was mounted to celebrate the signing of the Entente Cordiale four years earlier. It occupied 140 acres, attracted eight million visitors and sat next to a stadium built for the 1908 Olympic Games. The stadium was demolished in 1985 to make way for a new BBC centre.

All those white buildings became known as the White City, which is how the area north of Shepherd’s Bush got its name. The site went on to host another four international exhibitions before the outbreak of the First World War when it was turned over to the war effort, never to be restored to its former glory.

Open space: Ravenscourt Park has a walled flower garden, a bowling green, children’s playground, café and tennis courts. Holland Park and riverside walks along the Thames are close by. Otherwise green space is in short supply locally.

Ravenscourt Park and Holland Park: the best green spaces in Shepherd’s Bush
Shops and restaurants: High street and luxury brands rub shoulders at Westfield, Europe’s largest shopping centre, which has a street of restaurants along the southern terrace that stay open until midnight Monday to Saturday. The older W12 shopping and leisure centre is in Shepherd’s Bush Green and there are also shops in Goldhawk Road, Askew Road and Uxbridge Road.

Goldhawk Road is a mecca for dressmakers with a good choice of fabric shops frequented by students at the London College of Fashion in Lime Grove. Shepherd’s Bush Market sells everything from clothes, to luggage, to fruit and vegetables. Mr Falafel at the Uxbridge Road end of the market claims to sell the best Palestinian falafel.

Other shops and restaurants to look out for on Goldhawk Road include Patio, a family-run Polish restaurant, A Cooke’s pie and mash shop – although this could be displaced by the market development – Brewdog, a branch of the innovative Scottish craft brewery, and patisserie Fait Maison.

Askew Road has seen an influx of interesting independent shops over the last couple of years with branches of The Ginger Pig butcher and Brackenburys café. Laveli Bakery is another popular daytime hangout. Next door there is Max Inc, specialising in mid-century furniture and its own-designed giant desk lamp.  In Oaklands Grove off Uxbridge Road, Hummingbird Café is another popular place to meet.

The shops along Uxbridge Road serve the local Middle Eastern and Polish communities well – the Lebanese supermarkets have stunning displays of fruit and vegetables. Forrest is an old-fashioned baker and Stuarts London is a smart menswear store. The Bush Hall Dining Rooms sit next door to the Bush Hall music venue and there is a café at the Bush Theatre. Albertine in Wood Lane off the Green is a long-established wine bar with an impressive wine list.

Shepherd’s Bush Market: sells everything from clothes, to luggage, to fruit and vegetables

Leisure and the arts: Shepherd’s Bush is a cultural hotspot. The Bush Theatre, renowned for new writing, has relocated to the old library building in Uxbridge Road where culture vultures also find music venue Bush Hall. Next door The Music House for Children holds music classes and individual tuition covering a range of instruments. The Shepherd’s Bush Empire is a leading music venue on the Green and there are two multiplex cinemas, one in Westfield, the other in the W12 shopping centre.
The nearest council-owned swimming pool is the Janet Adegoke pool in Bloemfontein Road. Queens Park Rangers football team, based at Loftus Road Stadium, are standing second in the Championship this season

Shepherd’s Bush Empire: the leading music venue on the Green
Council: Hammersmith & Fulham council is Tory-controlled and current  Band D council tax is £1,060.90.

TEST YOUR KNOWLEDGE: Three things about Shepherd’s Bush

Where and when did four lads from Liverpool first record for the BBC?
The Beatles first appeared on BBC TV on April 13, 1963. In a session recorded at the Lime Grove Studios, they played From Me To You, Thank You Girl and Please Please Me. The studios were built in 1915, originally for the British film industry. At different times Gaumont, Gainsborough Pictures and Rank Films occupied the site and some of the great names of British cinema worked there, including Alfred Hitchcock and David Lean. The studios were later rebuilt in Art Deco style and from 1949 were acquired by the BBC. Steptoe & Son, Doctor Who, Sooty, Nationwide and Hancock’s Half Hour were among classic TV series produced there. The studios closed in 1992 and were demolished a year later.

Who links Shepherd’s Bush with Cricklewood and Hackney?
Oswald Stoll, the Australian-born British theatre manager and founder of the Stoll Moss theatre group, built the Shepherd’s Bush Empire. It opened as a music hall in 1903 and remains a leading concert venue. Stoll worked extensively with its designer, theatre architect Frank Matcham, who also designed the magnificent Hackney Empire. Stoll also owned the Cricklewood film studios in a former aircraft factory – it opened in 1920 and closed in 1938.

When was the Japanese gateway in Kew Gardens last seen in Shepherd’s Bush?
The huge White City exhibition centre north of Shepherd’s Bush hosted the Japan-British Exhibition in 1910. The gateway – a four-fifths replica of a Buddhist temple entrance, the Gate of Nishi Hongan-ji, in Kyoto – was moved to Kew Gardens in 1911. It still stands there today, close to the pagoda.
Average house prices in Shepherd’s Bush:
One bedroom flat: £365,000
Two bedroom flat: £530,000
Three bedroom house: £907,000
Four bedroom house: £1.43 million
Source: Zoopla

Source: Evening Standard

The five bedroom flat is one of only a tiny handful of homes at One Hyde Park – the world’s most expensive residential block –  to have come onto the lettings market since it was completed three years ago.

The £195,000 monthly rent on the Candy brothers interior designed property is enough to buy a studio outright in many parts of London, while the annual £2.34 million bill would pay for a substantial family home in areas such as Battersea or Chiswick.

The weekly rent is £45,000, about one and a half times the median London salary.

The particulars describe it as a “truly exceptional apartment” suitable for “entertaining on a grand scale” with sweeping views over Hyde Park and the Serpentine on one side and south towards Westminster on the other.

Simon Price, head of super prime lettings at agent Savills, which is handling the One Hyde Park property, said there had already been one offer and interest from several other potential tenants. He said: ”It is the outstanding building of its type in London, there is nothing to match it yet.”

The 9307 sq ft flat – about six times the size of a typical London house – has a 50 metre long hallway stretching almost its entire length, five reception rooms, six bathrooms and access to wine cellars and two parking spaces.

The master bedroom has “his” and “hers” bathrooms and dressing rooms and a south facing balcony terrace. The bathrooms have marble basins, huge walk-in “rain showers” with body jets and freestanding baths.

A family kitchen is fitted with Bulthaup units and Gaggenau appliances and there is also a separate “prep kitchen.” A large dining room can seat ten and there is also a media room, study and “winter salon.”

It comes shortly after a Georgian mansion on Audley Square in Mayfair was offered for rent for £15,000 a week.

It is not known why the owner has decided to rent out the apartment but Land Registry records reveal it was sold to a St Vincent and Grenadines registered offshore vehicle called Motion Incorporation for £56.265 million in February 2011 not long after the building was finished.

The apartment is unusual because it is available on a longer term let. Many of the biggest homes in London’s most exclusive areas are available only on short lets and compete with the biggest “Royal” and “Presidential” suites at the top five star hotels.

A huge six bedroom penthouse flat in a separate block in Knightsbridge is currently being offered for £50,000 a week for a short let or £25,000 for a long let. It was last occupied by a Middle East royal family.

Property experts said the rarified top end of London’s rental sector is being “Candified” in the same way that the “for sale” market was a few years ago.

Mayfair estate agent Peter Wetherell said: ”Even three years ago monthly rents of £60,000 to £80,000 were unusual, now they are becoming more frequent. A rent of £200,000 per month would have been unheard of, yet now a 5 bedroom penthouse in One Hyde Park can command such stratospheric rental values.

“The owners of these super-prime properties, rich Gulf Royals, wealthy African oil and gas traders and Asian billionaires have realised that these properties are often sitting empty for most of the year and are only used infrequently. So they hve now decided to turn them into “cash cows” by releasing them onto the rental market to regenerate income.

“The tenants are the people next in line down the super-rich food chain, the wealthy young overseas Prince, who are often students in London, New York traders on secondment to London, visting rock stars and Hollywood film stars all wanting an uber glam short-stay pad whilst they are in London.”

But Mr Price said there remained a shortage of supply at the top end because many owners preferred to keep their “trophy” London properties empty rather than sully them by renting them out.

He said: ”You lose 10 to 15 per cent of the value if you rent it out because it becomes ‘second hand goods.’ If you leave it empty and fully dressed you can watch it gain five per cent a year. It is like putting fine wine down for ten years and let it gather dust and not touch it.”

If anyone ought to know how to scale the property ladder, it’s an estate agent, surely. It must be a badge of honour, having honed your skills in the property marketplace over many years, to acquire for yourself one of those desirable residences in a sought-after location.

Most estate agents begin their buying life much like the rest of us, without privilege or private income. However, they learn to property hunt, to stalk up-and-coming areas for a bargain, and — with a bit of good fortune, a willingness to take a risk and the knowledge of how to do a good refurb — many eventually reach the top of the property market.

Here’s how three of them did it.

Shaun Macnamara, 34
Shaun is an associate director at CBRE, and his wife, Hanni, works in product development for a fashion company.

Start: a one-bedroom ex-council flat in Bethnal Green.
Finish: a smart two-bedroom period house in Victoria Park Village in east London, plus a buy-to-let flat.
Time taken: seven years.

In 2006 Shaun and Hanni spent £140,000 on an ex-local authority flat in Bethnal Green. Ideally they would have lived in Shoreditch but since they were priced out they opted for a cheaper neighbouring area, hoping the Shoreditch effect would ripple out —which it has.

Renovating the flat cost about £10,000. The couple did much of the work themselves and stuck to a strict budget, careful not to overspend on things such as kitchen units and tiles. They had seen renovations and knew what mattered to a sale.

Thanks to their hard work and a rising market, by 2007 the flat was worth £225,000 which meant they were able to remortgage. This helped them raise a deposit for a one-bedroom period conversion with a garden for their dog, in a nearby road. So they moved and rented out their ex-council home.

Then the property market crashed, leaving the couple with two mortgages. “We were quite nervous about whether we had done the right thing but fortunately we never had any void periods on the flat, which we let at £200 a week so it covered our mortage. We were all right,” says Shaun.

The couple married in 2011 and the following year, with the market picking up again, they moved once more, spending £370,000 on their current home.

They have since spent £60,000 on refurbishing it. “We do think it has gone up in value — some friends of ours recently moved in across the road and they paid £525,000 for a similar house which needs work,” says Shaun.

His advice to others climbing the ladder is to buy somewhere they will enjoy living in, rather than treating house buying as simply an investment exercise.

“We know this area will never be Mayfair, it will always be rough around the edges, but that is why we like it,” he says.

“And there is still property, so we can move and improve.”
FOLLOW THE SIMPLE RULES:

• If you are willing to renovate you will add value — but don’t chuck out original windows or period fireplaces.
• Buy quality but do not overspend on crazily priced fixtures and fittings.
• Take a DIY course and do as much as you can yourself.
• Neutral décor appeals to most prospective buyers.
• Choose your dream location and buy on its fringe — and hope the ripple effect will send up the price.
• Look in areas with run-down period homes ripe for gentrification, where good transport links are planned or already in place.
• A flat with its own entrance always appeals to buyers. Communal halls and passages can be dull and depressing and there may not be much you can do about them.
• Basements, top floors without lifts and high service charges put people off, so avoid these when buying.

James Wyatt, 48
James is a partner at Virginia Water-based estate agents Barton Wyatt, and his wife Jane, 47, is a full-time mother to their three children aged 13, 11 and nine.

Start: a two-bedroom “box” on a housing estate in Bracknell, Berkshire, bought when James started work in 1987. The property cost £62,000.
Finish: a £6 million house on the Wentworth Estate, plus a four-bedroom buy-to-let house, both in Virginia Water, Surrey.
Time taken: 27 years.

While James’s ascent might seem spectacular it has been earned by regular house moves and a willingness to self-build and take on debt.

He bought his first home at 21, only needing a five per cent deposit to get a mortgage, a process that was at the time “terribly easy”.

Within a year, however, he was fed up with commuting and decided to buy a flat in Virginia Water with his brother. He sold the Bracknell property for £77,000, and put the money into an £80,000 two-bedroom flat.

The property was run-down and the brothers invested around £6,000 in upgrading it, confident of turning a great profit. Then the market crashed and when they sold the property in 1991 they only raised £88,000 leaving James “bust”. He went to live with his parents to retrench.

In 1994, he got engaged to Jane and bought a penthouse flat in a converted Victorian brewery in Staines, breaking rules by buying the best property in the worst area rather than vice versa. “I really thought I had made it,” he says. The flat cost £125,000.

By 1997 he had itchy feet once more. His grandmother died and left him a small sum of money but enough to encourage him to remortgage again and buy a three-bedroom house on a gated estate in Virginia Water for £250,000.

“The market was really motoring by then,” says James, who sold the flat two years later, in 1999, for £395,000. This allowed the couple to buy a townhouse, also in Virginia Water, for £495,000.

“It was double the size of the other place but because interest rates were coming down so much at the time the mortgage didn’t actually cost me any more — it was a fantastic move,” James says.

The favourable mortgage conditions meant that in 2000 he “kept on borrowing” to purchase a four-bedroom buy-to-let property in Virginia Water.

A year later, James took another chance and bought a plot of land on the upmarket Wentworth Estate for £750,000. He funded this by selling the townhouse for £780,000 while the market was “really flying”, and he and Jane moved into a rented property while they applied for planning permission to build a 5,000sq ft detached house on the site. It involved both disruption and a gamble but even though he’d had his fingers burnt once, James felt he could now cover the risk.

By then they had a young family and were able to move into their new home, built at a cost of around £750,000, in 2002. Most people would have been content to stop there but in 2005 the family was on the move again, this time to a “rotten” Sixties house on the estate. They sold their self-built house for £2.2 million and moved into the new property while they drew up plans to knock it down and rebuild.

The build was carried out during 2008 and 2009 — they lived in their buy-to-let house for the duration — and the result is a huge, 9,000sq ft family home with seven bedrooms and an annexe, valued at an estimated  £6 million.

James is keen to point out that although they enjoyed favourable market conditions, he and Jane have “been through it” with their risk taking, always being on the move and living in rental homes while work was done. “I run a small estate agents and you are never going to make a fortune doing that,” he says.

“A great way to make money is to buy property, or build your own, but it is never guaranteed. After the Virginia Water flat I bought with my brother I was completely bust but I kept on going.”

Spencer Lawrence, 39
Spencer is a director of London-based Paramount Lettings, and his wife Francesca, 40, is a full-time mother to Sadie, nine, Otto, seven, and Freddie, four.

Start: a two-bedroom Acton flat bought for £166,000.
Finish: a four-bedroom family house in Ealing, worth £1.5 million, plus a one-bedroom rental flat in Kilburn worth £300,000.
Time taken: 16 years.

When Francesca met Spencer, she had a two-bedroom flat in Acton which she’d bought for £166,000, while he had a £106,000 one-bedroom flat in Kilburn. They moved into Francesca’s larger flat, taking in a friend as a lodger to help pay the mortgage, and rented out the Kilburn property.

The couple saved hard and in 2003 heard about a three-bedroom flat in West Hampstead, where Spencer works. It was a probate property and in a terrible state. But, crucially, it was cheap for the area at £280,000. They snapped it up, although the purchase was a stretch since they sold the Acton property for £220,000.

West Hampstead is a hugely desirable area and the couple had a big advantage, in that Spencer’s father is a builder and rebuilt the flat at cost price of £40,000 over the next six months.

However, once Sadie was 13 months old, and with Otto on the way, they were fed up with wrestling baby buggy and a toddler up and down stairs, while lack of family space was a nightmare, and another worry was on the horizon — the quality of the local schools.

They made a fine profit on their flat, which they sold for £510,000 and started looking in Ealing where schools were good. They bought a four-bedroom semi for £680,000 and spent £300,000 extending into the loft and the garden. “We now have the home we want, and when we downsize there should be a bit over for a pension.

“We did the right thing getting on the property ladder as soon as possible. Like so many people our needs changed and we were pushed on from being a young couple to becoming parents wanting space for a family. And we got there.”

Politicians are taking a stand over pre-selling property to foreign investors. A new industry code will put home-grown buyers back at the top of the developers’ lists.

Londoners are being offered first bite of the cherry with a fresh crop of new home projects, as developers step back from initially launching schemes abroad to foreign buyers who are keen to invest in the capital.

“Pre-selling” to foreign buyers has become a hot issue, with Lib-Dem MP Simon Hughes leading a campaign to stop the practice. He argues that the trend pushes up prices, prevents Londoners buying homes, and creates “ghost” developments with empty apartments owned by absentee landlords buying for investment.

Savills estimates that 75 per cent of private new homes in central London were snapped up by foreign buyers in 2012/13. From April next year, foreign owners will have to pay capital gains tax on any profits, but this is unlikely to dent demand from international buyers, as London property remains such a good investment bet.

Fearing tighter controls on foreign investors after the next general election, developers are going on a charm offensive with London buyers and have signed up to an industry code pledging to market all new homes in the UK before, or at least at the same time, as going overseas. Mayor of London Boris Johnson has welcomed the move.

“While overseas investment is a necessary part of any global city’s housing market, it is right that Londoners are not disadvantaged and new homes are made available to them at the outset,” he says. Barratt, Crest Nicholson, Galliard, Fairview, Redrow, Taylor Wimpey, Telford and Lend Lease are the big-name developers who have signed up to the code.

Smaller builders and niche developers are also focusing on London buyers — and why wouldn’t they, says Carl Schmid of east London estate agent Fyfe Mcdade. “The market is red hot with domestic buyers and likely to remain that way for at least the rest of this year.”

In today’s cost-conscious climate, homebuyers want best possible value for money and are searching for areas that are up and coming. For their part, developers are investing in outstanding architecture and pushing interior design, “that captures buyers’ imagination”.

New homes are in short supply, particularly finished properties, which is driving buyers towards  off-plan deals up to three years ahead of completion.