Am I a fool to sell my flat in London for 10k less than what I bought it for in 2017?

[Ellax]

Will be losing about 70k including the stamp duty and renovations I did to the place but it’s not really suitable for us any more with the stairs and buggy. Should I wait for things to improve or do you think the market will stay crappy for years to come?

TIA !!

If it's any consolation, I bought my flat for £280k at the end of 2016. £20k of renovation. Nice leafy part of South London, tree-lined road, 30 second walk from a train station that lands you at London Bridge 20 minutes later.

A year ago would have sold for £300k. Now struggling for interest at £270k. Agent's now suggesting £260k to match what other similar properties are doing in the area.

I'd love to be in your situation!

The London flat market is dead. I’d let it go now.

On those figures I’d take it as long as you can afford to move. I doubt you’re going to get much more in a year or so and it sounds like you’re already doing much better than other local flats.

I would say that it probably depends where. I mean if you paid that much for a flat in 2017 then it must have been in a nice location. So maybe prices will come back - it's hard to say. But you have to be prepared to wait and see over the next two years or so. Can you wait that long? If you have a baby do you need schools etc.

I am not sure whether it's true that flats wont come back. 1st time buyers will still need to live somewhere and most people in their late20s just arent ready for the suburbs or living really far out. So I actually think they may very well come back. However, whether these same couples will then pay 800k-900k plus for their next house in the suburbs when they could move further out once they have kids is more doubtful. So I actually think that it might be suburban three-beds that cost a million that might suffer

@RippleEffects

I'd reframe it as a £10k mental shift. Its approximately 1.4%.

1% sounds like such a tiny amount for being able to move on with your lives in a property that is closer to your needs? Being in a cash rich postition to move back onto the property ladder. A year of potential hassle, tenants damage, empty property whilst waiting for sale or £10k off now.

There is no ladder, she is no more cash rich than she was when she bought as best offer is under what she paid. It s a case of cutting her loss or banking in a house boom. Given the exodus and all the head winds for that particular market, I would expect buyers to continue having the upper hand for a while but hey, who knows with housing.

Ok thank you!! I just hope the buyer hasn’t walked away now. I only declines to accept 675 yesterday so it’s only been one day. He won’t have walked away right?

I know it’s only 10k from what I bought it for but I guess also considering the fact that I paid stamp duty, about 30k of renovations but anyway I’ve decided to go for it I hope the offer is still there.

The stairs are a nightmare with the buggy and I’m just generally sick of the place so I’m definitely ready to go for it.

I lived in a flat with lots of stairs (4th floor) and no lift until my daughter was 4. When she was a baby, we used a sling. When she was a toddler, we used the maclaren mark ii which is the lightest stroller on the market.

I lost £20k in value and renovations with my last house and it is gutting. But I had to move and I was nervous that when the housing bubble pops I'd lose even more.

I would sell now if you can.

If you’d rented that same flat at 2:5k per month you’d be looking at a loss of 90k for the 3 years. So could have been worse.

The fact you’re going into a family owned house and then will be end of chain when moving on is helpful

@Porridgeoat

If you’d rented that same flat at 2:5k per month you’d be looking at a loss of 90k for the 3 years. So could have been worse.

The fact you’re going into a family owned house and then will be end of chain when moving on is helpful

OP had to pay interest on the borrowed amount, assuming 2.5% on 600k that’s 45k of interest to service the debt, so the 3 years would have amounted to 115k versus 90k on rental.

You clearly overpaid for it. I'd take the hit and sell. It'll probably be worth less in 6 months time, and sounds like you're reliant on the sale in order to make your next purchase.

@rbubu

If it's any consolation, I bought my flat for £280k at the end of 2016. £20k of renovation. Nice leafy part of South London, tree-lined road, 30 second walk from a train station that lands you at London Bridge 20 minutes later.

A year ago would have sold for £300k. Now struggling for interest at £270k. Agent's now suggesting £260k to match what other similar properties are doing in the area.

I'd love to be in your situation!

2012-2016 is when sellers seem to have made the most money... And clearly buyers like yourself overpaid.

I think less people will work FT in offices & other industries will be affected by covid. So someone who previously would have bought in London might now buy in Brighton/Bristol/Cambridge & commute in couple of days but wfh rest of the week. A lot of the things people like about London won't be the same for a while. I think you may end up stuck with it if you don't sell.

The market for flats in London currently is poor and was declining pre Covid. There are also new bills (building safety & fire safety) on the way, they tie in with the cladding issues some are experiencing & that are likely to expand in scope. Add in Brexit...Despite all this I think the real problem is purely affordability, the market was & is still vastly overpriced & needs to fall/stagnate. Absolutely sell, it's not lost or wasted money, you got to live in secure housing which is a luxury many can't afford.

Forget about renting it out. Being a landlord now with tax changes & regulations is a bad idea, especially as the market may take ages to recover.

Other posters are right, I the grand scheme of things you've not made a huge real terms loss. Good luck with your sale!

If you can I'd hold out and see what happens with the stamp duty holiday. I get a sense that people are waiting to see if that will be extended before they start looking for places/working out what they can afford.

I change the floor and windows and other stuff so including the stamp duty that was paid that’s roughly how much Im losing.

Did you change those to increase the value, or did you change them to enjoy the use of?

@VinterKvinna to enjoy the use of but at the same time I justified parting with a substantial figure as I thought it would also increase the value.

@Andthenanothercupoftea it’s all so up in the year whether or not stamp duty will be extended. I’ve heard that apparently it Will probably only be extended for an additional 6 weeks so that people don’t drop out purchases. But who knows!

We sold a flat in London for less than we bought in 2018/19, having bought the flat in 2014. But the house we bought was probably cheaper than it would have been in 2014. Ultimately it’s all about what you want to do next. In our case the amount we anticipated borrowing remained the same so we didn’t really see it as a loss. And I was about to pop out baby number 2 so am hugely relieved we got into a bigger place particularly given lockdown life in 2020/21.

Don't keep it to rent out. It's a hassle and a financial risk and honestly the market doesn't need more unprepared, unprofessional accidental landlords.
You've lost a bit of money but presumably you'll save a few £k by living in someone else's property - you could 'recoup' £10k in 6 months of that if you want to look at it this way. Stamp duty and new floors are just things you had to spend money on. You can't expect to recoup your stamp duty when you sell on and the floor was an investment that didn't pay off and there is no guarantee it ever would.

I think I would take the offer and move on....cant see flats in london increasing for a long time...friends just sold in battersea to move to folkestone and it took over a year to shift it and meantime they lost out on lots of places in folkestone.

It’s a tough one, I accepted around 10 pc less than I thought my home was ‘worth’ (and the initial valuations this summer) - as I had loads of viewings but not lots of offers. I’d owned for years which eased the pain a bit

In 2017 you really would have paid top whack, but then you’ve spent money too ...

If it helps, my neighbours who bought in 2015 are on market for what they paid, and expecting to take around 20k cut, they say they would have paid similar to rent

It’s hard to accept, depends if you are willing to stay put for 2-3 years which is what I think it would take

It's undeniably a bad time be trading from a flat (currently undesirable; hard to sell) to a house, but this will undoubtedly level out a bit in the future, once lockdown is lifted, the the cladding form issue has been sorted etc. Depends really on if you think it's worth waiting, or getting on with life.

@Ellax : I was in a similar position, decided to sell in June, on mkt in July (photos etc take a while), around 5 viewings in 1st 2 weeks so not great

Then viewings slowed, eventually agents only advice was to drop price 25k ... which drummed up viewings but only 1 low ball offer which disappeared

Meanwhile, I withdrew from mkt and got 1 offer privately via neighbours : it’s less money than I want but they have been smooth to deal with

In my area, flats seem to be going for less and less

HOWEVER- if you are selling to FTB now, I’d let them get their mortgage offer in before I started incurring costs if I can as that’s always the risk

I think the mkt will take minimum 3 yrs to bounce back to 2019 levels for flats - I may be wrong. It’s possible this SD extension allegedly happening will keep activity going this summer

Are you seeing properties you want to buy? If market slows supply can dry up too..

Agree probably worst moment I can think of to move from flat to house but in my case it’s the cost of sanity

Renting out is possible but you need to research it carefully.
Many rules and regs changing and profit hardly covering the mortgage these days. Could you get a recommended agent ?
Join the NRLA to get up to speed.