How much would you offer for this property?

[Toria281]

I am first time buyer, no chain and can be flexible with moving, have a mortgage in principle and ready to go. 1 bed flat, newish build and well done. Currently on the market for £250k in greater london and has only been on market for 2 weeks. It was also put up in February, but didnt sell prior to the pandemic and has just been reinstated. The EA admitted the sellers have priced slightly above value to try their luck. The identical flat next door went for £219k in October last year. They bought it for £232k in 2017. What would you go in for as a starting offer?

200k.

I’d chance it with £235k

£220,000

It depends how keen you are not to lose it. As it has only been on two weeks going too low will probably put them off. I'd say go for 238 and expect them to take just over 240.

£215,000 based on the sale price of the identical flat next door in October.

£230K which is what it was worth 2-3 years ago because they paid that. It's possibly still on the high side given the Coronavirus pandemic and the fact that every landlord I know who have financed their properties are getting out.

I’d say roughly around what they paid for it if you want it. Pre Christmas things weren’t selling in our part of London - we had offers of £390k on a flat on the market at £425k which we didn’t accept - agreed £405k privately pre lockdown but everything was un hold until last week when it went through at that pre lockdown agreed price. Ignore that sold price in Oct!

225k

How large is it? Does it have a balcony etc? Difficult to put a price on it without having some more info. London varies drastically. Keen to know what 'well done' means - well done as in a neat new build, or have they done further work on it?

I’d offer what they paid for it plus the stamp duty they paid. If you want it make a series offer

£225k based on the value of the identical flat in October.

220 prices will probably tank somewhat as the resession processes, not crazy low but they ought to be expecting some hit.

I don’t think they will take you seriously if you go in at 200. It needs to be at least what they paid and a bit more.

So an update. Have just found out the lease on the property is 91 years. Should i be looking to avoid this totally or at least expect a significant discount on the property?

Why would you expect a significant discount? You know its a leasehold and the price will be in accordance with that... You can always top up the leasehold for a small cost, maybe make it part of the deal.

I didn't think 91 years was a problem. Under 80 - yes. Otherwise, not really.

Ok, good to know. I was told i might find it difficult if i wanted to sell in 5 years or so when it reached 85 or less. Is this true or even something i should be worrying about?

91 years seems OK! Surely it would be you who would either have to top up the lease before you sell or factor the need to do so in your sale price (assuming you live there for a few years before selling). But by then the property should have increased in value quite a bit. So no loss.

I’m really not sure you can expect a discount for that. I’d stick to basing your offer on what other similar flats in that area have sold for recently.

There’s a formula for working out the cost of extending the term of the lease - basically it’s based on the ground rent so the lower the ground rent the lower the amount will be.

Would it be a problem if i wanted to sell up at say 85 years? I have been warned it might be tricky to sell with a lease coming up to 80 years. Thanks!

Ignore above hadnt refreshed my screen so it looked like my last post hadnt sent! Thanks for input guys. Has made me feel a lot better

Well I definitely wouldn't offer more than what the other flat went for!