Marijana No Comments

It’s not easy selling a property in London’s sluggish market

I’m trying to sell my two-bedroom apartment in London and it’s becoming a bit of a nightmare as the capital’s property market continues to see demand decline.

U.K. property portal Rightmove said last week that average asking prices in London, across all property types, are down 1.7 percent (or £11,040, around $14,500) in July, compared to a year ago — the largest year-on-year fall since a 3.5 percent decline seen in January.

Good news for first-time buyers looking at properties with two bedrooms or fewer though, the “lower market sector” saw the largest percentage drop in the last 12 months, with prices falling by 3.5 percent, or nearly £18,000, from an average £504,131 to £486,371.

Encouraged by friends’ tales of quick sales and easy purchases, I thought my selling experience would be the same. But my zone two apartment has been on the market for over two months and has had only two viewings.

On reflection, it looks like I bought my apartment at the worst possible time, a month before the Brexit vote in June 2016 , and am now trying to sell at the worst possible moment.

My husband and I were first-time buyers and had been living on a canal boat for years. But lacking a large deposit — still the biggest obstacle preventing people from being able to afford their first home — we turned to the U.K. government’s “shared ownership” scheme.

It was a relatively easy process to buy a 45 percent share of a flat in the borough of Tower Hamlets in East London with a mortgage, paying rent to a housing association on the remaining 55 percent. But being part-owners has thrown up an extra layer of complexity for its sale.

The rules state that the housing association has first call on trying to find a shared ownership buyer to, justifiably, maintain London’s affordable housing stock. The association failed to find anyone, however, meaning the flat could be marketed on the open market, to anyone, at full-market value.

Now with only two viewings in two months, my estate agent says the price of the property is too high and is deterring value-conscious and cautious buyers.

Lower the price, you cry — but it’s not so simple with shared ownership. The housing association says that if we accept an offer lower than the official valuation (made by an independent surveyor it approved), the shortfall is taken from the value of my share, not theirs, meaning I have had to appeal the valuation just to lower the price.

Price is only one part of a wider picture of stalling property sales in the city. Economic uncertainty and lackluster demand, which is even weaker in summer, are making people stay put. A forthcoming interest rate rise from the Bank of England could depress demand and mortgage approvals further.

The woes for London’s property market is a first world problem, and, arguably, I don’t have to move urgently — there is some Dickensian charm to my three young children sharing a bedroom, for now.

As it stands, my flat has been on sale for 63 days and Rightmove says it’s currently taking, on average, 67 days to sell a property in London. Perhaps this could be my week.

Source: Yahoo Finance UK

Marijana No Comments

Biggest fall in house prices for five years

ASPIRING first-time buyers will be hoping to get a foot in the door after the biggest fall in house prices for five years.

The average asking price has dropped by £8,000 across the UK and £23,000 in London over the past month, property website Rightmove has revealed.

It comes after chancellor Philip Hammond offered another chink of light to first-time buyers in his Budget by exempting them from stamp duty on homes worth up to £300,000.

Rightmove’s director Miles Shipside said prices were likely to rise again next year but sellers faced a ‘more challenging market’.

He added: ‘2018 will continue the 2017 trend by being a real mixed bag of different price pressures, both up and down. But the net result is that we forecast another year of a slowing in the pace of price rises.’ The average asking price was £302,865, show the Rightmove figures, which cover homes of all sizes.

The 2.4 per cent drop from £311,043 is the biggest since a 3.1 per cent slide in December 2012.

In London, prices fell 3.7 per cent to an average of £605,203, from £628,219.

However, experts warned home ownership will remain a dream for millions of renters.

Mark Hayward, chief executive of the National Association of Estate Agents Propertymark, said: ‘There is still a long way to go before many first-time buyers can imagine getting on the housing ladder. While the stamp duty change in the Budget will feel like a positive step for them, we may find it increases demand for properties in the new year and ironically pushes prices up.’

Polly Neate, of housing charity Shelter, said: ‘We all know that homes are over-priced, so modest falls in house prices should not raise alarm bells.

‘Even with these slight drops, home ownership is still a distant pipe dream for most ordinary working people. That’s why we really need to see the government building more genuinely affordable homes.’

Brian Murphy, head of lending at the Mortgage Advice Bureau, said sellers should not worry unduly as demand was healthy despite uncertainty over Brexit and the first interest rate rise in nine years.

‘The market has remained consistent and steady in real terms, which will provide us with a stable start to 2018,’ he said.

Source: Metro News