Deal By Accident
27th August 2016
I was calling someone regarding a property we manage and in calling him I called someone else accidently, who happened to have the same name. I seem to have ten people with the same name on my mobile and often end up misdialing. However I have mastered the art of talking to a random person, until I have worked out to whom I’m actually speaking to!
So the person I accidently called this time around was an agent. Naturally I asked if there were any deals floating around at the lower levels meaning £500k to £1m.
Coincidentally he was actually at that time viewing a property in Queensway, which is priced at about 900 per sq. ft. The block is a very sought after block and hence the comparables were few and far between.
There could be two reasons why there is a lack of liquidity in a block, one is that it is so desirable to purchase once you manage to do so you never let go of the asset, unless you have to.
The other is the market for resell is so poor that no one wants to purchase, one reason for this could be that the property may be unmortgagable. There is a block like this on Edgware Rd, W2 which prima facia look cheaps, but closer inspection reveals the property is unmortgagable, and it is poorly managed with an absentee freeholder.
The property in Queensway sounded attractive so I viewed it within the hour. I immediately took a liking to the property and after understanding the numbers I took the deal! Being south facing means it gets a consistent amount of sun which adds to the feel of the property. This property certainly has a good vibe to it, though it’s a little dated.
Having transacted business with the agent previously we are in pole position to acquire this property. The likely purchase price for the flat will be £950k, with a lease extension and light refurb the property should be worth circa £1.65m. This is an asset to hold for the next few years or long term given the softening of the market, especially at higher levels.
The area of Queensway in general has been forecasted for a massive increase in price in the years to come, there is allot of money being put in thanks to the overseas investors. This area is known as ‘the poor side of the park’, being the north end of Hyde Park it is seen as the area which is least desirable. The other areas around the park are Mayfair, Knightsbridge and Kensington. However, the smart money will be invested in this end.