29th September 2018
Recently, I went to view a property close to Hyde Park, in close proximity to Queensway. It is a freehold, and seemed like a probate deal, from the look and smell of the place. The road is a no through road, which means despite the location being close to all amenities, it is extremely quiet. It has the look and feel of a Mews street. The property comes with a garage, and an outside space; all of this consists of over 2,000 sq. ft.
I was told the property could be acquired for £1.25M. Very good, considering next door is on the market for over £3M. The difference between the two is that one has been extended into the loft and has had a basement dug out.
This is undoubtably a good deal, and the house is in a highly desirable location and street.
The property is on the market for £1.65M, and given the market conditions, and the fact it is a probate, I was told initially we would be able to pick it up for £1.25M. This, however, was superseded by the sheer volume of interest the property has generated on the first day of viewings. They had over 30 applicants through the door. It’s easy to see why.
This illustrates that despite the uncertainty in the environment, people on the whole still have an appetite for a good deal. All it means is they are more fussy with the product and the price. The appetite has not gone, it has been channelled for more desirable stock at keener prices.
This market means one can discriminate to a greater degree when buying. When the market bounces back these will be the properties which will jump the highest in price.
This is an end user property, therefore, although the price and location create the initial interest, emotion in the end takes over; and there is a strong chance, given the interest, this property will go for well over the asking price. It will be interesting to see how much it will go for.
On the other end of the scale, we are also in the process of securing another deal which is in W2, near the desirable area of Little Venice. This is an ex council property, which will be a long term buy and hold. Ideal, due to the low service charges and long lease.
It’s a two bedroom which requires complete refurbishment. It is expected to rent well, minutes from Warwick Avenue station. It is a rarity, from the point of view of central London yields, as it will give a return of circa 5%. This is driven by the price we will be securing the deal at. You do not get 5% in London any more. Or rather I should say, it’s rare. Once you have paid the mortgage off, you should actually be left with some surplus.