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

Update: I’ve finally received an offer...!

It’s a bit under asking price but think we will get there ....

Fantastic news, you definitely did the right thing and its worked

Well done! Fingers crossed it all goes smoothly.

@DespairingHomeowner great news!

Great news!
Make sure you’re really active in ensuring it can move forward quickly now. Get any paperwork to the EA or solicitor by return.
I can’t remember if you’re looking to buy too, but I’d consider going into rental to ensure you can complete quickly. Lots of properties aren’t reaching completion at the moment, and the faster you can move it all along, the better the chance of getting there really.

Best wishes with it all.

@WombatChocolate

Great news! Make sure you’re really active in ensuring it can move forward quickly now. Get any paperwork to the EA or solicitor by return. I can’t remember if you’re looking to buy too, but I’d consider going into rental to ensure you can complete quickly. Lots of properties aren’t reaching completion at the moment, and the faster you can move it all along, the better the chance of getting there really.

Best wishes with it all.

Why aren’t lots of properties not reaching completion?

Lots of people are finding they can’t get the mortgage required or mortgage offered in principle don’t come to fruition. Banks require bigger deposits than a few weeks ago and are also being more thorough when valuing properties to ensure their investment loan will be fully repaid if the property has to be repossessed and sold, in a market which is likely to see falling prices at some point during the recession that might be quite long lasting, as end of furlough etc starts biting. So some are finding their property is valued by the mortgage valuer at less than the agreed price or less than the mortgage someone would get even. Then it falls through.

People are also jittery and pulling out because they fear losing their job and don’t want to stretch themselves with moving. They felt keen, but worry prices will drop and don’t want to have bought at the top of the market.

If you’ve got a buyer, the best thing is to get to completion as quickly as possible because the longer it drags on, the more time for the economy to do poorly and prices to drop and the jitters to grow more. It’s always the case that longer time means more chance for things to go wrong, but it’s even more relevant now when everyone expects a stalling in the housing market at some point soon...it’s just no-one knows exactly when it will come.

What @WombatChocolate said

Also more time for people to cool off/see something else they like! I plan to get the ball rolling on Monday ... I have a house that I’m offering on who want to move fast so hopefully that will work out for all, if not I will move in with family for a while

It’s definitely not the end as far as being moved, but hopefully the end of the beginning!

Lots are still completing too, of course!
It’s great if you can move in with family so that you can get a fast completion, if the thing you offer on doesn’t work out or moves slowly.

What kind of position is your buyer in? Do they require a mortgage and if so, do they need high LTV mortgage (likely with FTB). Are they also selling or chain free?

I know you will just be glad to have had an offer what was acceptable....totally fair enough. Hopefully they are also in a position to move fast and not likely to face the issues some buyers are coming across of discovering their deposit is no longer big enough for lenders, or your flat is valued lower than their offer or mortgage by the lenders.

Hope it all goes really well.

Thanks - this buyer has 80pc deposit so seems v proceedable

I have a couple of viewings booked in for tomorrow which I’d like to go ahead and see where we stand on Monday (I don’t expect other viewers to be in as strong a position)

I’ve dropped by a whopping amount so am looking for my full asking price now ... this offer is just a couple of percent/7k or so below ... but I’ve dropped 40k

My daughter is the same. Agents put it on at £550 too high I think but it's now £460 and no buyers. Very few viewings too.

Watch that your buyer doesn’t start eroding the price significantly at survey and/or shortly before exchange. Mentally prepare for this and be v clear to call their bluff and that it will go straight back on the market.

The conveyancing for flats takes longer than houses so sensible to pace your house purchase accordingly.

Meant to finish.....we had house under offer before COVID and anticipated the pre exchange shenanigans - we chose not to blink and they carried on at the same price.

You have significantly reduced yours - you had lots of viewings at that price which indicates it’s in the right zone.

And remember it doesn’t matter that you’ve dropped by £40k....it was over-priced before. It really is only worth what people will pay and unfortunately for lOndon flats that’s less than a while ago.

If you’ve got an offer plus a couple more viewings, I wouldn’t delay deciding beyond the weekend. Yes, you’d like asking price, but if you’ve received a credible offer, don’t let it get away because you delay accepting it in hope of better.....especially if they have 80% deposit....to be honest, I’d consider that makes them a better bet than someone offering £5k more who might struggle with the current mortgage market.

It’s hard regarding people looking to reduce the price after survey. Sometimes of course it’s perfectly valid and there’s no point insisting on holding the line on price. And sometimes people are trying it on...and most sellers take this view of it, but it isn’t always the case. In the London flat market, I really do think it’s a buyers market at the moment and so being absolutely to hold the line on price isn’t as viable as when it’s a sellers market.....but you’d have to gauge the situation as and when it arises....but hopefully it won’t anyway.

The key really is to do everything to move it along fast. You can see the lOndon flat market has already fallen. Furlough is close to ending and there will be redundancies. Local lockdowns are growing. Mortgage lenders are getting increasingly twitchy. More sales are likely to fall through and prices to fall further, so these all make completing at the price you agree more challenging as time progresses further....so I’d sacrifice a further couple of £K if necessary to keep it all moving along before these other things outside your control make it even harder.

Having an acceptable offer from someone with 80% deposit is pretty damned good at the moment. Brilliant !

Thanks for all the helpful comments esp @WombatChocolate

I’m totally expecting both renegotiation attempts at survey time & just before exchange... and I’m dead set that I won’t settle, am going to start as I mean to go on by holding firm to my asking price ... I am a bit stubborn, and not 100% in love with the house I’m planning to move to which both help. My flat is special (to me at least!)- I saw 40 in the area over 2 years to find ‘the one’ and never considered dropping after survey so hoping it will be the same with future buyer...

@DespairingHomeowner Do hold firm! Bearing in mind potential buyers know that we are entering a recession and will therefore try their luck. Granted, a home is worth whatever someone is willing to pay for it, but that doesn't mean you could pick up a 1 bed Islington flat for £300k - buyers need to get their heads out of the clouds and be realistic! Given that your buyers have an 80% deposit, it's unlikely they'll struggle to come up with the additional £7k to meet your expectations, and it's not like they're having to fork out on stamp duty.

If I'd found my dream flat, there's no way I'd let it go for the sake of £7k.

Our buyer was 90% deposit but still chanced his arm 2 days before exchange. It wasn’t a huge amount £12k - and we could have met half way financially but like you we knew that the property was unique in the area, would likely have increased in value over COVID - but more importantly just decided we wouldn’t entertain dealing with anyone who did this on principle. We also knew he was buying it for his DD - she would be gutted.

@Sssloou

Our buyer was 90% deposit but still chanced his arm 2 days before exchange. It wasn’t a huge amount £12k - and we could have met half way financially but like you we knew that the property was unique in the area, would likely have increased in value over COVID - but more importantly just decided we wouldn’t entertain dealing with anyone who did this on principle. We also knew he was buying it for his DD - she would be gutted.

This sounds like quite a story @Sssloou.

What justification did he give, and how long did the attempted renegotiation go on?

He said that the issue was accessing the last £12K from a timing perspective - so we said that’s fine exchange now as planned at the original price agreed and tell us when you want to complete ie when the £12K will be “accessed” - this was also done thru the estate agent - and we also said this needs to go back via the lawyers - which of course he couldn’t do because he had already had to prove access to level of funds for the lawyers to start conveyancing - so it was a lie that he didn’t have the funds.

Also on principle I don’t deal with people who operate like this in the world.

I think it must be dependent on area as well. A friends two bed flat with no garden in zone 2 sold in 3 days.

Oh sorry didn't read full thread. Fingers crossed all goes well OP

I have also been in the position where the prospective purchaser of our flat asked for a reduction (7K) shortly before exchange, fortunately the agent advised that they knew the individual and we should turn down their suggestion, which we did. The purchaser thought its only business, it didn’t feel that way to us.

@DespairingHomeowner checked back to see how you were getting on, glad to see you’ve had an offer, hope it’s proceeding well. I commented earlier in the thread. We are in a similar position, put ours on for way below what we would have got a year ago and have dropped £25k twice (so £50k in total) and just changed agents so fingers crossed we get some interest soon. It’s painful!

@SunnyUpNorth: it really is painful dropping the price, but I wasn’t getting anywhere so I think its just a really difficult market for flats

I hope your new agent delivers the goods !

What I found was a lot of FTB are obviously super keen to take advantage of SD holiday, but are stretched as were expecting to put 10pc down not 15 (EXACTLY same thing happened to me buying post credit crunch), so they have zero cash for normal updates (Carpets, kitchen etc). If you are in a position to do anything needed like that it might help (obviously reflected in price)

What has your feeeback been?

My sale is progressing: buyers may get mortgage offer back as soon as Friday so I’m praying it will be approved (they are REALLY stretching)

We have completely recarpeted it and repainted it throughout. The bathrooms and kitchen are dated but completely clean and usable for a good few years. All the agents we saw said not to do them up as it’s a way for buyers to add their own value which apparently they like. It would be hard to do anyway as we don’t live in London so would be difficult to organise from afar.

We haven’t had loads of viewings but not too bad, maybe 12-15ish. All the feedback has been that it’s lovely, good size, great location but it’s the lack of outside space. No one has said it’s priced too high even when it was first listed. There is a little cut through road from ours to get to the station that has some exLA flats on it that are smaller than ours and not very nice but some have tiny gardens and I noticed has gone under offer for more than ours is on. It’s 2 bed, ours is 3, and isn’t nice at all. It’s so depressing as we can’t do anything about the garden. We have one viewing booked for Saturday but was hoping for more seeing as we have just relaunched with the new agent this week. I was hoping she would rally some viewings from people on her books or people viewing other things nearby.
Good luck with yours, I think you’re right that it’s difficult for FTBs at the moment who are more likely to be buying flats than couples with kids.