x
By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards

TODAY'S OTHER NEWS

Distressed sellers offer 20% discounts on London off-plan homes

A leading buying agent says 2019 is likely to see the continuation of last year’s trend where distressed sellers accept discounts of up to 20 per cent on new-build homes they bought off-plan two or three years ago, before recent price falls.

Black Brick says high-end buyers in London are increasingly looking at not-yet-completed new builds because of the discounts available, especially in secondary locations.

“Some of the best deals we are sourcing for investors at the moment, with discounts reaching around 20 per cent, are from owners who agreed an off-plan purchase two or three years ago” according to Black Brick’s managing partner Camilla Dell.

Advertisement

“Due to falling prices some are unable or unwilling to complete, so face either selling at a loss, or losing their deposit” she adds. 

Dell gives one example, which she labels her firm’s ‘acquisition of the month’.

It’s at Lillie Square in Fulham, where a 7.4 acre car park is being transformed into a garden square with 808 high-end new homes.

Black Brick identified a three bedroom apartment owned by a highly motivated seller, who was unable to complete on £2.074 million contract.

“We were able to agree terms at £1,700,000, some £374,000 or 18 per cent below the original contract price. This equates to £1,352 per square foot – considerably below the £1,714 psf at which similar apartments in this scheme have traded” says the agency.

Dell says that aside from the growing interest in new-builds, there are other trends to watch for in 2019 beyond the inevitable Brexit uncertainties.

Firstly, buyers paying in Dollars continue to enjoy good deals in the UK generally and London in particular because they benefit from a nearly 30 per cent fall in Sterling against the Dollar over the last four years. “The currency advantage combined with the fall in capital values across the residential market has meant that they are seeing a saving of over 45 per cent compared to what they would have paid for the same property at the peak of the market in 2014” says Dell.

Secondly, there is renewed interest in buy to let. The agency says its sourcing deals offering yields between four and five per cent, with forecasts suggesting rents to rise up to 15 per cent over the next five years.

Thirdly, Black Brick says that for buyers looking to take the next step up the property ladder, conditions haven’t been better for years. “The challenge, of course, is finding properties for sale in a slow-moving market … [but] a number of our clients have sold and are renting, meaning they are ready to strike, chain free, when the right property comes along” explains Dell.

icon

Please login to comment

MovePal MovePal MovePal
sign up