Should I reduce my flat price?

[Bells3032]

I bought my flat in late 2016 for the price for £305. I met my DH in Aug 2017 and moved into his place and rented out my flat from Dec 2018. We have now decided to buy a house and we have found one but the excess stamp duty and the capital tied up in the flat is significant so we are having to sell it.

We put it on the market at £300 in June and got an offer within a week for £287 for a buyer who asked for tenant in situ so all was happy. 8 weeks later they admitted they only had a residential mortgage so couldn't have tenants in situ. I put the flat back on the market as investor only but sadly decided to give my tenants notice, they asked if they could move out earlier as found somewhere and I said fine and they're moving on October 26th. They have been really great through the whole thing and i feel terrible but not much I can do.

The original buyers came back begging me to reconsider selling to them and i know how hard the flat market is so said yes. 4 weeks later they hadn't even sent their lawyers their forms so back on the market the flat went.

In the meantime two other flats have come on for sale in the same block (of 24 flats).

one is ground floor - now listed at £289k in not great condition
second one is second floor listed at £299k but recently refurbed.

Mine is first floor and in OK although not amazing condition. The other flats are also a different layout with a big windey hallway which means their square footage is bigger than mine but every single room is smaller.

My agent is pushing me to go down to £290 (it's currently on at £300k). It's been back on the market a week and had three viewings and no offers yet. The previous buyers haven't pulled out yet but still haven't done any legal work either.

It's not holding up our purchase as my in laws have offered to lend us the funds until the flat is sold but moneys gonna be tighter til it's sold

What would you do?

You ve got 3 years to sell your second house to claim the stamp duty surcharge I think. In any case, with the fire certificate mess and the current uncertainty, prices will remain volatile for the foreseeable future. If you would rather not ride the storm then chase the market down for an early exit. Worth noting that the rental market in London is down 5% with the influx of Airbnb and WFH/ redundancies so not an easy job to predict what will be financially sensible between selling and renting out.

I don't want to rent out again. It's been a nightmare trying to sell with tenants in and whilst we can manage in the short term without selling the capital tied up and the extra stamp duty will make a big difference in our lives (between them it's around £130k that's tied up until it's sold). Now tenants are moving out it's gonna be empty til it's sold

OP I think you are going to have to price it at 290 or below to sell it - you put it on in June at 300 - the market has only gone one way since then. You do not say whether you have a balcony or private terrace but it seems, going on postings on another thread, that flats without private outside space in London are now hard to sell. If you want to be the one who gets the sale in your block, you need to be better value than the others.

I’d also try 290k.

I think you have to reduce it if you want to sell now so it’s worth working out whether the price reduction is balanced out by the other factors. The worst thing to do though would be to leave it on the market untenanted at the higher price.

Do your in-laws want the money back sooner or later? Doesn't that influence your decision?
what's the rental yield on the property? I don't know what yield investors are looking for these days? Someone mentioned 6% on another thread but with near zero interest rates that seems a bit high?