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Low hanging fruit

24th March 2018

We are looking to tie up a deal shortly, in the W2 area.  The property was on the market for £1.8m last year, and even attracted bids of £1.5m, which the owner chose not to accept.

However, we are now in a different time period, which is affected by various factors.  Correction, it is not actually directly affected by any of these factors at all.  Behind every property there is a human being, and it is their perception of the factors which then have the effect of altering property prices, not the events themselves.

Humans tend to stagnate and put their heads in the sand whenever there is adversity or uncertainty.  Fear of interest rate rises, and uncertainty surrounding Brexit, have been accused as being the main culprits for this environment.

In the market there are always those who have to sell, they do not have the luxury of choice.  At Sow & Reap, we make it our business to get to know these sellers, and make acquaintance with them.

There are aspects of life you just can’t get away from, namely death, distress and divorce.  They can also occur sequentially, someone can get distressed, then divorced, these two can of course be interchangeable, and then die.

Such personal situations are bad enough, coupled with an external dampened property market creates a harvest where there can be low hanging fruit for grabs by the astute investor.

This year, most commentators are predicting a flat market at best, and probably whereby in real terms there will be a decline in prices.

Generally, this creates an excellent environment to purchase property.  The issue is, if a market is in decline, the question people ask themselves is: what if after I purchase a property, the price drops even further? This mentality causes lethargy, and very few people have what it takes to take the decision and action to do a deal.

At certain prices there is no question of whether a property is a deal or not.  When you can purchase in W1, W2 and Marylebone at prices which range from £650 to £750 per sq. ft., there is no question of this being a deal.  The prices here usually start from £1,000 sq. ft. as a bare minimum.

Currently, we are in the process of securing a contract for a period property in W2 for only £658 per sq. ft.  There are no issues with the property, for example, no short lease or a massive service charge around the corner.  Prices on this road normally go at around £1,100.  This is a massive 40% discount to the normal prices.

Just to contradict everything I have written, I will throw something into the mix.  Just this week, a property has sold for £6,100,000 in W2 within 5 days.  This represents £1,813 per sq. ft.  This flies in the face of the picture which I have painted.  It demonstrates the diverse nature of buyers for the London market.  Clearly, there are some for which a bargain is not at the top of their agenda.  They may want a beautiful turn key place to live, and time may be precious; therefore, they do not wish to waste time haggling or wait when they have seen something which exactly fits their criteria.

If you like the sound of this deal, call the office now to find out more.

Suresh Vagjiani

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