20th May 2017
The interest in one of our East London site’s is heating up. Currently, we have a hand full of strong bidders who are circling the site. Last week, I had one of the potential investors come and look at the site along with the planner; meeting the planner was more important than seeing the site, as it is more important to hear than to see. Especially from someone who knows his trade. After all, there is only a green waste land to look at. It is more important to understand the council’s policy and possible objections, and thereby ensure they are tackled well in advance. Looking at the site, situated on the high street, intuitively it’s crying out for development. The station is only a few minutes away and takes you into the heart of London in half an hour. The high street, contrary to my expectations, had a very light and airy feel. It’s a location where you can live and breathe, and have the luxury of getting into town within a short while.
The architect has drawn up a scheme for 63 apartments without the need for car parking; this looks doable given the closeness to the station.
My initial reactions are not to sell the apartments, as this area still has mileage in it, and I expect the rental will be very strong. A cursory glance on the high street shows there are many Estate Agents. They can only exist if there is money to be made. Money can only be made if there is liquidity or flow of transactions. This is indicative the area is buzzing. Whether we ultimately decide to develop and sell, or rent, I expect this to be a highly profitable investment.
If the decision is made to sell, it will be very helpful to ensure the development signs up to the Help to Buy Scheme, which is underutilised. This scheme is targeted at first time buyers, and home movers. The ‘bottom’ end of the market, perhaps the most important as far as the whole housing market goes, is the end of the market where new entrants come in, new blood. This ensures the rest of the market is continually revitalised, that’s the theory anyway. This scheme goes up to £600,000 for properties within London. It offers buyers a deposit of up to 40% of the property value. There is no interest on this amount for the next five years after which you will be paying 1.25% plus base.
This means you can sell to buyers with only 5% deposit. The scheme is only applicable to new build schemes.
These numbers are comfortably within the remit of this development. There is a real shortage of good quality homes which have signed up to this scheme irrespective of the market conditions. This scheme once signed up should be sold well before physical completion, as most of the population are struggling to even get a foot in the housing ladder. This deal is not done yet, it’s not on the market, and nothing is done until it’s done. So if you like the sound of this please get in touch!
Suresh Vagjiani
