London flat not selling

[DespairingHomeowner]

Just wondering what people’s experiences are with flats in London at the moment? I have a 2 bed upstairs flat which I put on the market mid July 5/6 viewings, no offers. Dropped price 25k which generated 2 viewings and now interest has dried up entirely

My options now seem to be to undercut the market (it’s on at 425 so down to eg 410 for 400) or wait til next year perhaps

Pictures are good but agent doesn’t seem to make much effort... how can I encourage them, how much time should I give them, and if I go to an other agent should I just take it off now & remarket in Spring?

No garden of my own and downstairs neighbours garden is scruffy and overgrown which is part of my problem... it’s a nice flat and spacious though. I bought for about 5% under average value for area as flat was scruffy (needed full replaster etc) .. I can afford to drop by same if needs be (but want to make sure I’m doing the right thing. If it’s not the price but no interest in flats then not worth doing).

Other negatives:. Flat has a dated/worn kitchen (fine but cheap laminate put in to sell around 10 years ago, it’s a ‘I can live with it for a year or 2 kitchen’). No other major negatives, and don’t want to change kitchen as won’t get money back but know this is holding it back.

My motivation for moving is to go to a house - wondering whether I’d be better off waiting til Spring, or trying to get someone interested for a BTL now ... I’d never have believed before Covid that a zone 2 Victorian conversion, 20 min to C London would be hard to sell but this market seems to be very tough

If it won’t sell chances are your price is still too high.

Thanks - I had 4 valuations, current price matches lowest 2 (others were price I originally listed at).

How much would I need to cut to get interest without selling myself short ... am thinking another 10 might do it?

A lot of potential buyers will struggle to get a mortgage at the moment. And the market is saturated in some places - is there a lot for sale in the same bracket in your area? If you don’t really need to sell immediately I would be wary of cutting the price further, I’d be minded to sit tight and wait til next spring if you can.

Possible reasons

• people don’t want to buy in London right now. People think working from home will continue and want to see what’s going on with that before committing to things like buying.
• People are also wary about job security, even in London, and want to hold on before spending shit loads.
• no garden - lockdown has made people realise how important outside space is, and not having any will put people off.
• loads and loads of mortgage products are gone. Deposited needed now are massive. DH and I were gearing up to finally buy (on the edge of London with a budget around what your flat is up for) but needed a close 95% LTV and there’s no hope right now, needs to be more like 80%LTV which is no joke in London. Your flat sounds like the sort FTBs would have looked at and they won’t be able to right now.
• The kitchen may not be as fine as you think

It's absolutely hellish to sell a flat without a garden now OP. Everybody wants a garden. If you can hold off and wait for them to become a bit more desirable again then I would do that.

A few months ago I could get a large mortgage with a 5% deposit, then this changed to difficulty in getting a mortgage with a 10% so have been trying to get a 15% deposit.
Now just hearing in the news that they may be restricting to 20% deposit.
Will take me a lot longer to get a mortgage now especially wih prices going up. I think your best bet would be to drop prices now, I really doubt the market would be better next year

A lot depends on the area you live in - are there a lot of other flats on the market near you? There are lots near me (SW London). Having no garden/outside space is definitely a no-no in the current market after lockdown when people were desperate to get outside.

I doubt very much whether things will be any better next year and lots of other buyers are like you, looking to move out of London into a house for the same price as a 2 bed conversion flat in London. Sorry, probably not what you want to hear :-(

Lots of competition: 28 2 bed flats in 1/2 mile, around half have been reduced in recent weeks

Am just wondering if situation will be any better in the Spring re mortgage availability etc? Main reason anyone would buy this is to get into C London quickly do its WFH that is killing things (it’s also why I want to move as don’t see point of being central now that I no longer need to be in C London myself: changed jobs a few months ago)

OP - you've nailed it on the head - so many more people WFH now and for the foreseeable future.

I know 3 people trying to sell and move out of London at the moment. People are looking for more space, gardens, nicer surroundings. They’re all struggling to sell. Very few people are looking to move into a London flat at the moment.

@SuzieCarmichael, @sunshinesupermum*@BuffaloCauliflower and @Rudolphian*

Thank you for your thoughtful comments. I’d been thinking of moving for a while, and as bought 10 years ago and looking to buy a house at c.500k I could take a hit, or I could wait til Spring. Just wondering if I’m best just getting it over with now as it may be exactly same situation for next year or 2

I bought in 2011 and mortgage availability was being squeezed then - mostly needed 10-20pc deposits, was hard then and would be impossible for me now ...

We sold our flat in zone 2 after 3 weeks on the market. We’re ground floor and have a garden. We’re in an area with lots of new builds and I’ve noticed they are taking much longer to sell (if at all) even after reductions.

I think it’s to do with the lack of 10% mortgages, people wanting outside space and not needing o be so close to work if they are only going to be going in a few days a month.

@DespairingHomeowner I am personally not expecting it to be better in the spring. We’ve adjusted our plans and expect to rent for around another 3 years while we try to cobble together at least a 10% deposit (not great when I’m about to go on maternity and we’ve both been on 80% salary this year which has battered our savings plan) but of course not everyone will be in our position. I think it will take a couple of years for the mortgage market for FTBs to get more sunny.

DespairingHomeowner I doubt very much that things will improve for quite some time and as there is the stamp duty helping you atm I would probably take the hit now rather than wait. Best of luck.

It is a very difficult time for those with flats.
Even the activities in London have stopped so those with kids aren't able to take their kids anywhere but then you do have good parks around you.
If you've found a house and the house prices are not dropping, I would do whatever I could afford and move to the house. I don't think it's a good idea waiting. Make sure you can afford it though as who knows what lockdowns etc they'll be adding to in the next year plus house repairs etc.

I'd take the hit if you paid less when you bought. Most flat owners will have to do that if no garden or bug terrace / not an exceptional flat. Definitely not going to improve much in spring! Maybe in a year or two may impove but imo not to the previoius price levels.

big terrace ( )

@blue25

I know 3 people trying to sell and move out of London at the moment. People are looking for more space, gardens, nicer surroundings. They’re all struggling to sell. Very few people are looking to move into a London flat at the moment.

Chelsea flat, on the market 3 weeks, just sold for asking price. Nothing special about it either. Well, it is lovely but it's an identikit one like 1000s of others. 8th floor, small balcony. Have been astonished.

I’m trying to find my first place now! Before lockdown we would have considered a place like yours - Our budget is 425

However, now we decided we need a garden and there are heaps available within our price range with lovely gardens - so we have stopped viewing any other flats now!

I would wait till Spring or later if you can. The ripple effect of the City of London saying many of their staff can WFH is bound to have an effect while COVID lasts if not longer ... why should they pay for desks when a few meeting rooms suffice? But clearly you need to think about the stamp duty tax furlough and when it runs out.

I think I’d drop the price and just move on. I doubt that the market for flats will be amazing in a few months due to higher deposits required etc. As above, many ftb are looking for garden flats or choosing to get a house in outer London instead.

If the price drop doesn’t work, then maybe it is a case of tarting the property up. 5% of 400k is 20k which would be enough to put in a nice kitchen and decorate to make it really gorgeous.

@Rudolphian

A few months ago I could get a large mortgage with a 5% deposit, then this changed to difficulty in getting a mortgage with a 10% so have been trying to get a 15% deposit. Now just hearing in the news that they may be restricting to 20% deposit. Will take me a lot longer to get a mortgage now especially wih prices going up. I think your best bet would be to drop prices now, I really doubt the market would be better next year

Surely the property market will just dry up if this continues for a long time? Even selling my house and having equity of 70k, I'd still need a 82% LTV for a next step up house!

I would just drop the price, can't see market improving in next year.

We are currently trying to sell a house on London borders, been on a week, viewing level has been 4 in first week so that appears fine but very interesting 3 out of 4 feedback has raised the garden as only issue. So think garden is becoming much more of a factor than normal due to lockdown. Estate agent also said studies are being mentioned a lot, again due to increased wfh. Probably not much you can do with that but may explain a bit.

I would look at similar properties and assess the competition thinking about it as if you are a buyer. The kitchen could be an issue, it requires spare cash and mortgages are requiring increased deposits. Though renovation ones are selling by us but at a much reduced price. Our estate agent advised either go on as a renovation or perfect. Maybe ask the estate agent's advice and look at your competition on Rightmove, ours is 90% houses all done and 10% renovation jobs. Our EA said a house part done would struggle.

You do realise prices will fall even further in the Spring when stamp duty holiday ends?

People have realised how stupid it is to spend half a million quid on a pokey flat. Not your fault, but you will have to drop the price considerably if you want to get rid before prices fall further next year.

Surely the property market will just dry up if this continues for a long time? Even selling my house and having equity of 70k, I'd still need a 82% LTV for a next step up house!

That’s exactly what happens during recession. People struggle to get mortgages and there are v few properties sold and bought.