4th June 2019
We have just agreed a deal yesterday on a property in Ealing. The property is a garden triplex flat, consisting of a massive 1,400 sq. ft. The contract will be with the lawyers later today or tomorrow. This is a probate property and has a shortish lease, though it is mortgageable.
This is one of those that I call a ‘boomerang’ deal. We had been tracking it for several months, and then the vendor ended up agreeing an offer on it with an end user. They proceeded to do a full structural survey so it looked like it was full steam ahead. However, for some reason or another the deal did not proceed.
So, the deal came back. This time there was a sealed bids situation. We changed our offer just before the deadline to £500K.
This won us the contract.
There were two issues with the deal, one was the short lease, and the other was that there were some rather large cracks going through the first floor of the property.
The lease issue is not insurmountable. Currently the lease is 67 years which is actually mortgageable, and usually an extension is almost procedural nowadays.
The other issue of the large cracks was enough to scare most people away. It’s always good to remember you never get a deal laid out on a plate for you. There are generally some issues, or something or another, to work through. This of course required further investigation. In such a situation you can investigate the issue itself, or check the insurance policy to see if it is fully covered. Ideally, both should be done to get a full picture.
The survey revealed the movement was from the ground floor extension which was done after the house was built, just settling. The cracks should stabilise in a few years.
It was not subsidence which is the first fear which enters people’s minds when they see such cracks. Which itself is not an issue, if it is covered by insurance properly. There will be an insurance claim to be submitted, the cost, however, will be borne by the insurance company.
The closest comparable is the property next door, which sold for £820K in Jan 2018. This was during the aftermath of the Brexit vote, which should mean the price reflected the uncertainty caused by the vote to some degree at least.
I would like to aim to buy and sell this deal. The current market is not conducive to this approach. However, this is a prime residential postcode and the property is large and airy and has a garden; so I feel it is worth a try. Although, it is always prudent to have a Plan B, which is simply to hold it on a BTL basis. Once the issues are resolved we can look to extract the initial funds from the property, thereby leaving very little, if any, in the deal.
We are looking to place this deal, please get in touch if you are interested.