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

So the question is, what price do you need to achieve in order to be able to afford the next step on the ladder that you want to take?

Personally if I was pretty keen to move I’d put it on for a bit above that level and just leave it there and see what happens. Don’t get into a position where you’re selling for an amount which hampers your future purchase if you don’t absolutely need to.

Chelsea flat, on the market 3 weeks, just sold for asking price. Nothing special...
erm the location makes it special - most foreign buyers with money buy there, for one thing. Whether investors or not.

Thank you all, especially @JoJoSM2 and @KoalasandRabbit

I really DONT want to be here for years so will try to see whatever t suggests re price drop to sell and move!

I just don't think there's a huge market for flats rn. We were about to buy one before lockdown but then pulled out and are now only looking at houses. We even have the fabled 20% deposit, but I'm still half-furloughed so who knows if we'd be able to get a mortgage. Most FTBers I know are just standing back and hoping for a crash, so we are holding off. You would either have to knock the price down quite a bit, or just wait a year.

I'm in the outer London borders and it's a vibrant market with people from zone 1-3 moving out so they get a house with a garden instead of a flat. Anything decent priced up to £1.5m is doing well. Above that and the pool of buyers is naturally smaller.
I think that's the competition. I would personally sit tight for a bit to see what way the markets goes.

Could you try and renovate the kitchen a bit- what about painting the units and replacing the worktop/ taps and adding some nice accessories? Also are there any nice parks near to you, what about mentioning them on the description and putting a photo of the park in the gallery? And if you haven’t decluttered and made the flat as charming/ airy as possible then do that- what you need to do is (a) get people through the door and (b) make someone fall so much in love with your flat they will overlook the lack of outside space. But yes also if you can drop the price a bit now I would do it and get the deal done- who knows where we will be in the spring. Just be aware that you may not also get a big discount on where you are moving to as properties with gardens, studies and a bit more space are a different market.

@DespairingHomeowner we are in exactly the same position as you! Although we don’t actually live in our flat anymore, we left London 8 years ago and it’s been rented to the same tenants the whole time. They moved out at the beginning of the year and we weren’t sure whether to sell or rent it again. With Brexit uncertainty then we decided to rent it for a year and then review. Had the place repainted from top to toe and recarpeted. Kitchen and bathrooms are not modern and shiny but also not dated or mouldy.

By the time we had it done up lockdown had kicked so it was just sitting empty for a few months and then once viewings were allowed again we didn’t have much interest as people wanted a garden. Decided to put it on the market at the beginning of August. We have had a few viewings, probably around 10 or so, but no offers.

We dropped the price by £25k at the beginning of September and haven’t had any viewings since. It is a beautiful 3 bedroom duplex flat on the best road in the area. When we bought it it went to sealed bids, and probably would have done so if we sold it at any time since we owned it up until bloody 2020!! It’s in zone 1, five mins from a station, it is currently on for £100k less than our highest valuation.

We aren’t sure what to do now. Too soon to drop price again? We are thinking maybe another £25k as that would take us into a lower search bracket on rightmove. I personally don’t think the market is going to massively improve anytime soon and we would rather just be rid now. It’s ideal for a couple working from home as third bedroom could be a study and still have space for guests etc. It’s so hard to know what to do.

I think the increase in stamp duty generally has hurt the traditional house buying market. When I was a FTB, we all bought 1-2 bed flats in central locations knowing we'd sell up in 5-10 years when we coupled up. Every couple had a 4-5 house trajectory in their lifetime.

As it has become so expensive to move, I suspect that has shrunken to 2-3 houses in a lifetime. That means people want to skip the usual 1-2 rungs of the ladder.

@SunnyUpNorth - very sorry to read that but it echoes with what I'm hearing too. It sounds gorgeous and would have been snapped up a year ago.

Thanks @NewHouseNewMe , what’s really depressing is when I scroll through rightmove there are flats under offer that are smaller (2 bed, one bathroom) on not very desirable roads on for more money and under offer! Always because they have some form of outside space. That makes me wonder if it’s even worth dropping the price as price doesn’t necessarily seem to be the issue. But then I keep thinking that someone will value the great location and size over outside space. I think I need to get the agent to push it a bit more. I don’t know how soon is too soon to drop the price again without looking like there’s something wrong with it and that we are desperate. We aren’t really in a rush to sell but I think once you’ve made up your mind to sell you psychologically just want it gone!

We lost money on our first house after living in it for 10 years as we bought just before the financial crash in 2008. Negative equity for years and after having our baby we'd grown out of the house and area. In the end we just decided it was better to 'lose money' and sell it for a lower price just to shift it and move on with our lives as we wanted to relocate for schools and a garden.

I would price it as low as you can afford without compromising your next purchase depending on equity etc..

What helped us was trying to view it positively and accepting we'd had the pleasure and security of owning our house, renovating it to our taste and enjoyed living there, hosting parties, having the first years of our child's life there, instead of spending the same on renting somewhere where we may have had to move around etc. Although we're now selling up again in our next home (another story ) I don't regret moving as we're in a nicer area, good schools that suits our family now.

@JoJoSM2

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.

Yes exactly that, the banks willingness to lend and credit availability that controls property prices.

We are at the start of a massive economic upheaval which we haven’t even begun to feel the impact of yet.

It starts with the likes of FTB not being able to satisfy the banks stricter requirements (higher deposit etc) this has a knock on effect as there’s no first link in the chain. Then even those the next step up with houses bought in recent years realise they haven’t enough equity to get another mortgage to move.

Another factor for flats is the fire certification debacle due to cladding and without one banks will refuse to lend against newer flats.

Then you have the fact that the trend is leaving the city to WFH and with companies giving back their office keys, that’s unlikely to reverse to anytime soon.

New kitchen worktops or a lick of paint won’t solve these issues. It has to be priced to sell below all similar properties.

When BTL landlords finally start being able to evict their tenants after months of voids, you could well see whole portfolios of city flats come on to the market.

No-one could have foreseen that this would happen as London flats were previously a sound investment. I am by nature a pessimist when it comes to all things financial. If I were in your position, I would drop the price as low as you can to shift it and move on with your life. Honestly, I can't see things getting any better, in fact it could be that the economy will definitely get worse once redundancies start coming through. Will people want to commit themselves long term? It will sell if the price is attractive enough. Very best of luck - a rotten scenario for you and not of your making.

Btl landlords are probably also only looking at flats which are 1) very well priced: rent achieved will be lower in current climate and riskier. Landlord insurance has gone up substantially too 2) have outside space - as most tenants are insisting on that and 3) definitely no fire safety certificate issues. If 1-3 met they might still buy at a good price due to stamp duty holiday.

If it where me I would drop the price. I can only see prices for central London flats going one way in the next couple of years.

If you hold on in the hope of prices going up, you may find yourself stuck for a few years. Even if you take a 20K hit to shift it, you'll be able to buy a cheaper place next year, assuming the predictions on house price falls play out.

The other thing to consider is whether it is going to get what a BTL would want, e.g. 6% yield after service charge. That would mean about 2K rental after costs.

I am with the majority. I’d reduce/sell it and get on with my life. Things won’t be better for you in the spring, there almost certainly won’t be a mass return to offices full-time and people will continue to appreciate outside space. I’m sorry that you’re in this predicament. I’m sure you worked hard for your property.

Meanwhile, spruce up the kitchen as best you can. Ask the neighbour whether their garden could be tidied up at your expense because you desperately want to sell (appeal to their better nature).

Thanks all ... some sound words of advice

Paying to spruce up downstairs garden is more than I can bear (they have been awful anti social neighbours which is part of wanting to move) but agree waiting til Spring wil achieve zero

Will get on to agents in the morning...

In your position OP, I think i'd look at reducing the price further, getting a sale & your life moving. Easy for me to say that, & I don't know how much of a financial hit you'll be making, but these thing's do usually work out :)
I don't think demand for flats in cities will go anywhere but downwards for the foreseeable.

I agree with the cut price and move ASAP
If anything a flat with no garden in London will lose value in the near future and the houses with gardens will more than likely hold their value or may even increase
So by waiting the gulf between your flat and the house you want will get bigger and then might not be achievable at all

I’ve just got off the phone with agent - who advised dropping by a whopping 25k

It’s a bit of a shock but unfortunately I do think lack of outside space will be a massive limiter and I can’t magic up a garden

It means I will be buying a much cheaper future property but I don’t see things changing anytime soon so hoping this will get the place sold

Good luck, OP! I hope that makes a difference. Even if you then need to get a house that’s smaller than you originally hoped for, you can try to pick one that you can grow into and extend etc.

My SIL tried to sell a 3 bedroom terraced house in Dulwich area in 91-92. She had one viewing in 18 months and that was their future buyer, with an offer with a request that they move out by Christmas, they manages to sell it in that time (6 weeks).

This slow down in market will definitely happen this time as well because we will have more redundancies in London. My friend and I we are waiting for an announcement about redundancies today, one of us works for a charity the other for a FTSE100 company.

What's £25k as a % of the original advertised price? If we're talking a typical £400-£500k London flat, i'd say if you only need to reduce £25k to sell that's very very good.

Thank you @JoJoSM2 @Fere and other commenters on this thread

It’s really a shock and disappointing but I think I need to get in there before winter/redundancies/ Brexit etc makes things worse 😳😳😳

It’s a total 40k taking it down to 400...so 10%, taking my next purchase down a notch

Irony is when I was looking to buy years ago I also wanted a garden flat .. ! I saw this place which had great space and was priced to sell so jumped at it, lets see what unfolds