28th January 2017
This week we have finally managed to pull in a deal, priced at close to £8m. The seller was a little paranoid, presumably due to past sales which have fallen through. They required confirmation of who the buying party is and a letter from their lawyer to confirm they have the cash. This was duly provided, twice in fact as we had to raise the offer.
However, even after the deal had been agreed the seller then asked for a bank statement through a couple of agents who were arranging the deal. This is a little ludicrous, no one wants to show their personal statements to anyone else, especially as the initial letters had been provided through a reputable firm of lawyers, with the buyer clearly identifiable, and with two agents involved in the deal. I even appreciated the need for the seller to insist on the initial letter for comfort, as it’s very easy to put in offers and not follow through, this happens all the time. And often agents pretend to be buyers with a view of finding a genuine buyer when the contract is in, and then can’t perform anyway.
Most talk is cheap, there is no follow through when it comes to many individuals and the same is true in the property business. There are very few serious players who get things done, most make noise and hover around deals hoping to somehow or another get some crumbs whilst transactions are done.
This is a very lucrative deal in a prime part of North London. In this market the only deals to do are the most lucrative ones; you can afford to be choosy, as the future conditions are uncertain. There are many variables in the market, from the new lending criteria coming into play to the softening of the currency and the uncertainty around it; and then you have the consequences of Brexit, which only few understand in totality. This environment makes people nervous and consequently decent deals start to float to the surface, the likes of which could only have been imagined only twelve months ago.
We are seeing interest from developers in India and Family Wealth Offices, who want to bring money wholesale into the London property market. This is the environment they look for and prey on. The foreign player has the added bonus of a soft pound as well as a soft property market. The two combined can, with a little effort, have the effect of making deals about 40% cheaper. It is rare to see a property sale in London with this much discount.
We have a property developer in South India who has taken the strategic decision to enter the London Market; they are currently negotiating on a site.
Rest assured this window will not last forever, those who purchased in late 2008 and 2009 during the last period of uncertainty are sitting on a tidy fortune.
Suresh Vagjiani
