Time And Tide Wait For No Man
We are this week looking at a flat in Maida Vale which is coming up for sale in the Barnard Marcus auction on Wednesday the 16th March 2011. By the time you read this article it would have been sold to our client or not as the case may be.
We looked at many properties in strong locations and decided this is one of the best to go for.
The property consists of roughly 450 Sq Ft. It is comes in dilapidated condition and therefore there is an added margin in the development on this property.
Our research on this property shows it has come in auction previously and remained unsold in 8th February 2011. The last bid was £256,000 and the reserve was set at £275,000 this is assuming the auctioneer was not using the back wall to bid up the price, which often happens. A similar property was sold for £277,500 in the Allsops auction in 13th February 2008.
Allsops is a much popular auctioneer I remember attending one and the doors were closed as there were too many people and it became a health and safety issue.
The property is on the ground floor of a period conversion. The main selling point of this flat is its huge garden which comes with the property. A garden is extremely rare in a flat in this location. The flat is in the borough of Westminster and is equidistant between Queens Park and Maida Vale Stations. Westminster College is only a stone throw away from the property. A college like this would fuel the demand for rentals from the student sector of the market. Shirland Rd runs parallel and is a very desirable road for people wanting to live in Maida Vale. The Paddington recreation ground is close by, it is always good to have a large patch of greenery near a property this helps wild life and air quality which although is not a main factor for driving up the demand but it enhances it. Though dilapidated this property has a good feel about it with plenty of day light coming to the living room due to it being south facing.
It comes with a new lease of 125 years and low service charge of £1150 pa.
The vendor is Network Housing, this means it is very unlikely to be sold pre auction. As a company they need to be seen as being transparent in its dealings. If it was sold pre auction they would need to justify why it did not go to the room.
A comparable is the actual price a property has been sold for as opposed to one that’s on the market. Any one is free to put their own property on the market at whatever price they wish. This means market prices may not be a true indication of the actual worth of a property . This is why comparables take precedence, bank valuers use these when valuing a property. Our comparables led us to give a valuation of £325,000 to £350,000 for this property.
Therefore a purchase price of up to £280,000 at the auction would still yield a good return on this property for buying and selling. And don’t forget you can always refinance at the new valuation after a 6 month period at 85% LTV. If the property is valued at £350,000 you would release £297,500. This is all your money for the flat plus some of the refurbishment money would come back to you and you would still own this property and carrying on enjoying the uplift. This would allow you to carry on purchasing and holding on to your properties.
If you sold this property your margin would be reduced as the entrance cost would have been in the region of £12,000 allowing for 3% stamp duty and legal costs etc.
The above is some of the research we do when sourcing a property for our clients. There is still the legal pack to be read and understood as well as ensuring the finance is in place. 10% will be required on the day followed by the rest in 28 days.
MD Sow & Reap