Anyone else struggling to sell in London?

[alixpb]

I have a 2 bed flat in a good area of North London, admittedly it is expensive at £850 but I've been on since last September and it hasn't sold. I have had two offers in that time, one for more than it is on for now (I ended up lowering the price in the end) and the other for the asking price but both fell through due to their sales falling through. I've also had another person interested but again have to wait for them to sell so nothing will probably happen.

I'm wondering though how people are finding the market as I am literally getting few to no viewings and I've only recently changed agent. A couple of my friends who are selling admittedly cheaper properties in other areas have had their property sold within weeks but I'm still sitting here.

I know it's not price as I have actually had the most interest when it was on at it's highest price (£60,000 more than it's on at now) and since dropping the price twice I've had little to no interest.

I'm just interested to know whether this market is really slow and whether other people are also struggling. I'm wondering whether I'm actually going to ever get to move. A similar flat has also come on recently at £200,000 more than mine so I know my pricing is OK but there just doesnt' seem to be many people looking.

I'd be interested to hear other people's experiences.

If people want a little laugh - look at RM for flats 1/4 mile form Highgate and Hampstead stations, 2 beds, under £900k.

There are some totally shit flats up for sale for crazy amounts.

Bedrooms you can't fit beds in, only bathroom the other side of a kitchen. Dated decor. Low quality kitchens. Some of those vendors are out of touch with market realities.

If I had £850k to spend I quite like the look of this

Thanks essential. I wonder how it will work this time. Let's hope one way or another the floor space actually gets used! Empty flats are not a good thing in general....

The other variable - if we have continuing political uncertainty (which we may not, i realise) will that eventually = higher interest rates, which will also contribute to lower demand? Very difficult to tell - people would have said spring 2009 was a risky time to buy in London, and look what's happened! Doesn't mean it wasn't a risk, but it does suggest it is impossible to predict!

Has it crashed or not ? The centre of London l mean. Property. Or is it about to crash? Which is it? Why haven't l heard about this? You'd think it would be headlines or something ?

It hasn't crashed, no
But prices are softening

There are very few forced sellers which means that you won't see a crash. The vast majority of people who can't get what they want/think their place is worth will take it off the market or rent it out rather than sell for a knockdown price

We've seen a mini cycle since January in our area in SW London
In january/February, there was very little on the market, so things were selling fairly quickly for fairly good prices (about 10% down on pre-Brexit though)
By March/Easter, lots more came onto the market, which caused prices to soften a bit, because buyers had more choice and were putting in cheeky offers
A lot of people would rather take their houses off the market than take a cheeky offer, so the supply has dried up bar anyone who absolutely has to sell, so prices have risen again

So the supply/demand cycle basically self-corrects, because people are so loathe to take an offer for under what they think there house is worth, which is typically what is was worth a year ago (see OP for examples)

Also, the stamp duty over £2m has put off a lot of people from making the next step up the ladder, so a lot of people are staying put in their £1.5-£2m houses and extended/refurbishing, which means there are fewer of those houses coming on to the market, and that's had a knock on effect to the rest of the market

There also seems to be a lot of corrections in the £2-3m bracket, just like you used to see houses backing up below the old stamp duty thresholds

Houses are rarely worth £2-2.5m now. If they used to be, they are worth £1.99m now. To get someone to part with the stamp duty needed to buy a £2m+ house, it has to be very special, so the market caps at £2m and starts again at £2.5/3m+

I don't think it has crashed yet. But it seems to be wobbling, at least parts of it are. But nobody really know yet what might happen. Unless you have a crystal ball it's impossible to call the top of the market until it's passed. Personally I'm quite bearish having seen what happened last time at close quarters. But hopefully this time it won't just become hunting ground for opportunistic landlords and there are more owner occupiers.

Also, the tax regime for overseas buyers changed 2 years ago so they are no liable to capital gains tax for new purchases. This puts the uk more on a par with other popular jurisdictions so there are likely to be a lot less interest from overseas investors, especially as they won't know what will happen to financial services in London, who employ a lot of their target rental market.

Sorry ... now liable to ...

@LowGo

It is news. Do a google news search for "london prime property crash"

That's gorgeous!

kokusai
"Person can not now pay for the flat at the agreed price.
Developer tells them to go &*^^ themselves, they are owed the sull 190k.
Person ends up going bankrupt. "
In Nine Elms most of the "buyers" will be foreign ('tis rumoured), They';; just abandon the deposit and the developer needs to re-sell. Ah the Great British Housing Ponzi at its finest!

Yes I know that re nine elms, but I was saying that a lot of ordinary people got screwed over because of falling prices between exchange and completion on their off plan properties in the GFC. It wasn't just 'flippers' last time.

Just pulled this from the FT:

www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/apr2017

UK house prices rose by 5.6 per cent in the year to April, according to new data from the Office for National Statistics, up from a (revised) 4.5 per cent gain in the previous month.

“While up against March 2017, there has been a general slowdown in the annual growth rate since mid-2016,” the ONS remarked.

The rise leaves the average UK house price at £220,000 in April, up by £12,000 on the year and by £3,000 on the month.

English house prices stand well above those in Wales, Scotland and Northern Ireland, and within England, London (unsurprisingly) stands tall.

Sounds like a Prime Central London problem that hasn't spread (yet anyway). Sellers can't hold off forever though can they? I googled that Nine Elms thingy - that's not going to end well is it?

"Sellers can't hold off forever though can they? "

While interest rates are low, many sellers have a lot of flexibility not to sell. If they start rising, then you may get into more forced sales (although of course lenders have been doing stress testing on borrowers to try to prevent this).

Thanks everyone for posting and for all your commments, I really appreciate it. It seems to be quite an active topic which is great and it's been very interesting reading all your thoughts

Sounds like a Prime Central London problem that hasn't spread (yet anyway). Sellers can't hold off forever though can they?

Prime central will have a much, much higher proportion of houses that are second homes, owned without mortgages, bought as investments, BTLS etc

There will some forced sellers due to divorce and bankruptcy but even those needing to relocate will probably be in a much stronger position financially and can rent etc

A wholesale crash will only come about when you've got a massive glut of property coming to market, and I just can't see that happening in Prime central
You can see it at the moment because transaction numbers are down, and falling...

Bloomsbury was mentioned as an example... if you look on mouseprice you'll see that 26 out of 87 properties are currently reduced...

mouseprice.com

Sure, a lot of people in central London are holding off selling their property in the current market, but I'm really glad we sold last year and don't need to worry what might happen if everyone is rushing to sell.

I certainly wouldn't "invest" in prime central London right now...I really think that is ill advised.

I think interest rates will never go up because of political uncertainty, but I wouldn't bank on that either.

good point spare change about absolute prime - not that many financed by borrowing.

A bit lower down the ladder there may be a lot of btl mortgages - though some will be fixed rate of course. (Would be interesting to know the proportions.)

Has anyone heard of any buyers pulling out post election due to general uncertainty - would be a bit soon I know, but if I'd been due to exchange on Friday I might have felt nervous!

beijing youth I agree govt would not want interest rates to go up at the moment, but sometimes it can become impossible to avoid if markets take fright. But as I say stress testing/affordability etc may mean the impact is not so great as it might have been.

What about Nine Elms - isn't that a "massive glut of property" coming down the line? Who are all those new expensive apartments going to be sold to? A "glut" surely? So close to Chelsea too.

stress testing/affordability etc may mean the impact is not so great as it might have been.

@I17neednumbers

I dunno.... I got a mortgage last year @ 5.5x salary that was 'stress tested' and since then I've had a 15% pay rise and TBH I find it a little tight as it is at the moment to maintain my pre-mortgage lifestyle as the house costs so much more than the rent I was paying.

I wouldn't loose the house or anything if rates go massively up - but I would have to stop eating out all the time, buying stuff for the house going to theater, gym membership etc all of which have knock on impacts on the economy. I imagine there are plenty of people like me who would not have an issue paying the mortgage but wouldn't maintain their spending that keeps other bits of the economy afloat.

Fix fix fix :-)

Really interesting that the house you link to Kokusai is up for sale for 200K more than it was bought for 2 years ago. If it sells for that price, it would have increased in value by 100K every year for the past 4 years. You can see why London turns the masses into speculators!

As somebody described it above, it is a complete ponzi scheme, underpinned by ever increasing numbers of speculators to buy at increasing prices.

kok that's interesting about the robustness of stress testing. I think past experience suggests that (not surprisingly) owner occupiers will do whatever they can to avoid selling - cutting back on all discretionary expenditure like your gym membership etc.

That may not apply to btl owners though - I don't think we know yet, because we haven't previously had a drastic interest rate hike with so many btlers. But it would make sense if they were readier to sell rather than cut back on discretionary expenditure to 'subsidise' their btl.

As you say, fixed rates will reduce the impact as well. Anyone know the proportion of fixed to variable rate mortgages? (And the length of fix as well is important)