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analysisparalysis

Central London (wc1, Ec1, N1)

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Hi everyone,

Have been lurking for some time and after doing another two viewings on properties tonight decided it was time to join/post.. please go easy on me.

Have been semi-looking for a year or so. Had an offer agreed on a 2-bed in WC1 a`while back but after much argy-bargy over undisclosed communal repair costs (of around £10K for 'our' share) we pulled out.

(before I get any abuse for wanting to buy in these postcodes, I have to point out that they have been agreed with OH after much discussion and aren't really a negotiable for him.. we currently rent in WC1 and love not having to catch the tube to work ... hard to give up!)

So, I've been keeping a watchlist of properties over the last few months - about 50% have had falls after sticking for a month. The one that fell through was on at £325K, fell to £310K. Have seen a 2-bed on at £320K fall to £290K, a 2-bed at £320K fall to £299K, a 1-bed £320K fall to £295K (this one has been on the market since March! We finally went to see it when it dropped to £295K and was told it had been on for eight weeks, yeah right)... just a few examples.

There seems to be a trend for 1-beds going on the market at around the £310K-£320K mark, which I think ridiculous. They are largish for central London standards (around 60sqm) but the rent cost would be way less than the mortgage - by my calcs we would need to pay around £400-£500 a month to own rather than rent. (I realise the financial craziness therefore of buying rather than renting, but still have that yearning...)

Anyway, the number of properties shifting off the market quickly in the areas we're looking is quite low ... most things are sticking for a good few months before vendors realising the prices are way too high. Some aren't realising that at all - the number of properties that have been stuck at the same price for months is quite amazing.

Many of the agents we've been seeing have been quite condescending about our competitors in these postcodes, for whom 'money isn't really a problem' and who 'can well afford cash purchases at those prices' or unexpected costs of £10K.

Anyway, this is just indication of how asking prices are going in these postcodes, rather than actual sold prices.

Thanks,

AP

Edited by analysisparalysis

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Yes there's a limitless supply of people who think that 'money isn't really a problem' and who 'can well afford cash purchases at those prices' or unexpected costs of £10K'

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Yes there's a limitless supply of people who think that 'money isn't really a problem' and who 'can well afford cash purchases at those prices' or unexpected costs of £10K'

Funny how 10k is not a lot and any one can afford it when you are buying but when selling no one can afford to drop 10k.

Excuse my ignorance but you siad big 1 beds and quoted 60sqm how much is that in square feet as I find it easier to understand.

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Have you done any research into price trends in these areas in the last few years? This area was the epicentre of the dot com boom and received plenty of city money in the equity market bubble. I wouldnt be surprised if prices were down on 2000 levels.

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Hi there whiterabbit and balamory,

60sqm = around 645 sq ft (I'm Australian originally so can't think in feet!)

Re price comparisons, I've only really looked at specific property prices I've been interested in, or general data which I can only seem to break down by borough. WC1 falls into Camden so I don't really trust the borough-wide data given the variation in areas. Any ideas on sites I can use for more specific breakdowns?

Ta,

AP

Edited by analysisparalysis

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Just got my ourproperty.co.uk prices update and the sale of a flat I had been watching (which is also identical to one I saw last week) had gone through - it was listed as being under offer at £329,950 - actual sold is £300,000 - buyer negotiated 10% off. Still high for a 1-bedroom, but it was a decent size flat and was on Hatton Garden in EC1.

It's going to make their £320K listing for the other flat a bit difficult, I suspect.

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Just got my ourproperty.co.uk prices update and the sale of a flat I had been watching (which is also identical to one I saw last week) had gone through - it was listed as being under offer at £329,950 - actual sold is £300,000 - buyer negotiated 10% off. Still high for a 1-bedroom, but it was a decent size flat and was on Hatton Garden in EC1.

It's going to make their £320K listing for the other flat a bit difficult, I suspect.

Was 10% really chopped off, or was it overpriced at the start? What have similar properties sold for over the last 2 years or so?

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Was 10% really chopped off, or was it overpriced at the start? What have similar properties sold for over the last 2 years or so?

Definitely overpriced, the one on at £320K has now gone under offer so I'll wait to see what that sold for.

Lots of price drops this week - about 4 properties in my watchlist have dropped their asking prices by 5%

(and I've only got about 20 on my list!)

And more showing up for rent or sale - this one as an example:

http://www.findaproperty.co.uk/agent.aspx?...prop&pid=392634

http://www.findaproperty.co.uk/agent.aspx?...8&photo=2#photo

I don't really understand why agents do this - by my calcs it would cost you around £50 more a week to own than to rent, not counting all the costs of buying and maintenance, service charges etc. Do they think we can't use a calculator?

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A bit of mood music from SW1 for you, for what it's worth... all the flats in my block received mailshots from a local EA this week offering to sell our flats to 'waiting buyers'. Late 2003/early 2004 we used to get 2 or 3 of these each week - but they vanished almost overnight last summer. Draw your own conclusions from the fact they're back - seems the best sign I've had for a while that the market round here is still moving.

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Guest Fiddlesticks

And more showing up for rent or sale - this one as an example:

http://www.findaproperty.co.uk/agent.aspx?...prop&pid=392634

http://www.findaproperty.co.uk/agent.aspx?...8&photo=2#photo

I don't really understand why agents do this - by my calcs it would cost you around £50 more a week to own than to rent, not counting all the costs of buying and maintenance, service charges etc. Do they think we can't use a calculator?

Buy at £279,000, rent for £320pw. By my calculations that gives a yield of nigh on 6%, which doesn't seem so bad in Central London. Surely you can borrow the money for less than 6%?

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Buy at £279,000, rent for £320pw. By my calculations that gives a yield of nigh on 6%, which doesn't seem so bad in Central London. Surely you can borrow the money for less than 6%?

Most mortgages seem to fall into the range of 5.5 to 6.5% (source: Charcol).

Assuming that there are no falls in the price of the property (a heroic assumption in my opinion) then in this case it is just about breakeven to buy.

Interestingly, from the landlords side his yield will actually be less than 6% because of service charges, repairs, agent's fees and vacant periods; frankly, if he is left with 4% he would be doing well.

Once the landlords realise that there will be no further growth and combine this with the miserable returns there could well be a rush from the market, contributing to the anticipated crash.

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Guest Fiddlesticks

Most mortgages seem to fall into the range of 5.5 to 6.5% (source: Charcol).

Then most people are paying way over the odds! Perhaps you're thinking of existing mortgages?

For a new FTB it seems pretty easy to get a mortgage fixed at 4.5% for five years: http://www.yourmortgage.co.uk/espot/best_supermarket.htm

Still no good if you think the flat will be worth £50k in five years time ;-) However, ignoring possible capital losses I would say it's cheaper to buy it than to rent. If you knock them down to £270k and get a mortgage at 4.39% fixed for five year from Britannia you'll pay less than £230 pw on an interest-only basis. That's £4,680 pa less than renting, which should cover maintenance.

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In this particular case it's important not to overlook the fact that 'the property benefits from lift access' -- which will really ramp up the service charge for the owner/occupier. The two most expensive service charge items for London flats are (as far as I am aware) lift maintenance charges and porters.

BE

Edited by Bathsheba Everdene

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Buy at £279,000, rent for £320pw. By my calculations that gives a yield of nigh on 6%, which doesn't seem so bad in Central London. Surely you can borrow the money for less than 6%?

Hi there - when I originally posted the property was listed at £289,000 but they must have dropped the price since then - neatly illustrates that asking prices are going down though! I'm working on the basis of a 95% mortgage at around 4.8%.

And Bathsheba's point on service charges is a really good one - most central London properties I've seen that have a lift have a service charge of at least £2000 pa.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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