4 of us in a 1 bedroom flat!

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This is very long story but I’ll try to cut to the chase. My partner and I bought a property before covid and it was perfect for the two of us. We got pregnant with the intention of moving when the baby was born but covid hit and totally derailed our plans. We hoped to get out but after multiple reasons we had to hold off. One major reason was the flat had depreciated in value and we wanted to hold out and see a raise in price. Our DC was still so small and our flat was big enough but then a surprise arrived. We thought ok we’ve got 9 months to get this sorted but the market completely crashed and after the valuation we are now down a whopping 50k from what we paid. We had no one interested and it sat ok the market for nearly a year! Now, We’ve had lots of viewings recently but no sale and we are desperate to get out but cannot afford to lose so much. Obviously it affects the next step of location and type of property we buy. I’ve also had a very quiet year with work and I think my mortgage application wouldn’t be favourable. We were hoping to port, I know they still check things but it may be less strict? I’m not sure. Selling at a low price could potentially mean a huge upheaval as we wouldn’t be able to stay in the area. Schooling would be effected and work etc. we’d potentially have to move out of the city to a completely new place. I’d just like to know would be people willing to sell low in order to get on with their lives despite it causing such an upheaval forcing major and somewhat unwanted change?

Definitely but it actually isn’t that great after our own mortgage DOUBLED thanks to Liz truss 🙈 so it covers it but not the additional service charges etc that come every so many months

I feel for you OP- I recently sold a flat in London and had to take a big loss, I also know three other people in London who have had to do the same this year. As someone said upthread, new builds do lose a lot of value the second they are no longer new. Also if you bought pre-Covid, you probably overpaid, and now the market is very different. What is the service charge and ground rent situation on your property? This can put a lot of people off too.

I don't mean to sound harsh, but you need to accept you will lose money if you want to move. If you are struggling to sell at a 50k loss I don't think the flat is ever likely to increase by value that much.

It took us a long time to come round to the idea of this, but now we've been in our new place for six months and haven't looked back. Sometimes it is worth it to get to where you want or need to be. Good luck!

Omg living in London sound amazing reading this (I have no experience with London 😂). That's great you're loving it and the kids do too.

Zone 3 is still great and allows you to enjoy London and all it offers.

Realistically if the EA are telling you that you need to lower the price sadly that’s really the only answer. If you did lower to what they are suggesting what budget would you be looking at moving forward.

If you can't loose £50k you can't buy in zone 2. It's the reality for a lot people. You need to step up at work if you want to buy in zone 2.

You should move further out. You can't have everything you want. What are the priorities? Bedrooms for the kids, a garden? Access to transport for work and childcare? If you can't afford the area you are in then you have to accept it.

Thanks for that! Were you in London too? We are around 570sq ft

It’s not so much about staying in the area… and I’ve accepted the exact place we are is too expensive. we can’t go anywhere until our flat sells and our flat has depreciated for the area. We could move to a cheaper area if the flat sold but it’s not been moving sadly

They are suggesting another 25k down!

Thank you for your thoughts! Did you stay in London. I definitely have accepted the price factor. Sadly it is the reality. Our neighbours can’t sell so came off the market but we have kids so we cannot wait really.

We moved out of London, in part due to the fact that we could no longer afford it.

We are now up north, in a 4 bedroom house that cost the same as our 1 bedroom flat (even with the loss in price), and very happy with our decision to do so.

ubfortunately it can’t reconfigure. The best option is sofa bed and kids have the bedroom I think

You can get trapped in the London ‘lifestyle’ though.
We also enjoyed living central for 10+ years.
But where we live now actually has equally as much to do.

Our friends sold their 1.5 bed flat (it was 1bed and office space smaller than a single) near Kew Gardens in 2022. They have bought a 5 bed house with huge garden near Ipswich for the same price. They were also in Kew with 1 child and baby 2 on the way. They were upset to move as Kew Gardens and the river were a short walk. But now said they were silly to wait so long. Both children now at local schools and nursery’s, which actually had spaces and not extortionate. They both only commute to London once a month

London can be great. But more and more you need to have a lot more spare money to enjoy.

We considered the north as DH is from there but both our jobs are London centric. It’s so incredible what you can get for your money!!!

When you say your jobs are 'London centric' what does that mean?

I am self employed with the majority of my clients being in London but it doesn't matter- I occasionally travel down to see them but I often travel to London anyway. My partner has to be in the office once a week so he just travels down for then.

What does your DH do? How many days a week does he have to be in London for work?

The flat hasn't sold at the price. If you want it sold now you don't have a lot of choices. Sorry.

Sadly the reality is the only thing you can do is move the price downward as suggested by EA and you have seen your neighbour is in a similar situation with their property.

New builds when glossy and new offer a benefit to those that want them, but an old new build doesn’t have the same appeal. Also new builds are often overpriced and don’t make the market increase that others do especially in a short time frame. They loose their market value as you can see.

You really can only take the price hit and move forward. The next property will then hopefully increase in value and offset your loss. But you will have to make the move to a cheaper area to achieve this.

Also your service charges and sinking funds will be a saving going forward.

Reduce the price, clear out everything into storage and limit toys etc to basics. It’s the only solution as nobody is going to pay an inflated price and even your EA is saying reduce and you have no current interest.

You need a similar couple or single person who wants the location and small ish space.

So if you sold for £75k less than you paid for it, would you have any equity left?

I think you just need to reduce the price further, sell and take the financial hit. Your flat isn't going to increase in value by £50-75k any time soon. Unfortunately it sounds like you overpaid for it to start with and given that new builds lose value and with higher interest rates, you're going to struggle to find a buyer if you don't lower the price. Overseas investors want brand new and domestic buyers will be affected by interest rates and affordability, and are much more savvy these days about high service charges for high spec new builds (maintaining that comes at a significant cost) and since Covid everyone wants a garden even if it's just a communal one.

Living in limbo is one of the hardest things. It must be so stressful to have that uncertainty and trying to keep it ready for viewings.

To me it sounds like you have to make a choice;
A) expect losing money, lower the price to something it will sell at and buy where you can afford- potentially outside of London.
B) take it off the market and focus on making it work for a period of time; a year or two.

I think the main question is how much you want to stay in London. Definitely pros to holding on but if you do go it would be better to do it soon and let your son start school in the new area. The sooner you moved the sooner you can start rebuilding your finances as well.

I wouldn’t rent it out unless you were moving to a much much cheaper area.

You'll pay tax (40% I’m guessing) on the rental income less costs before the mortgage cost. Then you get 20% tax relief on the mortgage interest. So you could be actually making a loss after the mortgage cost, but still be paying tax. And having the risk of voids, damage etc.

Then obviously you have the cost of renting on top.

We rented out our house when we moved (shared the equity between our old and new house) and it took a year to break even for the first time. And that was with very low interest rates and switching the mortgage on that house to interest only.

Also when you talk about your work as being like a toxic relationship - I think you should reevaluate whether it’s worth the stress and anxiety over cash flow. Maybe it would be ok if other parts of your life were less stressful, but that doesn’t appear to be the case.

I know flats often haven’t held their value as well as houses, since covid and also concern about the service charges. So it’s not necessarily you over paying in the first place, it’s unfortunate for you and many others trying to make the jump from a flat to a house.

Good luck.

we both are in jobs where our skill set needs us specifically to be there in person. DH is in every day. My days in the week could be 1 day here or there or (whilst unusual) could even be 7 back to back. The average is 3-4 when it was “normal”.

No the current price is already in the negative