New build vs. Second-hand homes in London: house price report reveals six-figure gap between new and resale flats

There’s a huge gulf between the average price of old and new-build flats in London. New builds can offer peace of mind while ex-councils flats are best for value so weigh up the pros and cons carefully before you buy.

Ex-council vs. new-build prices in every London borough

The six-figure price gulf between new and resale property, and between privately built and former council homes, is revealed in a new study focusing on London.

Research comparing the cost of one-bedroom flats in every borough shows pre-owned homes cost an average £542,715, while a new-build one-bedroom flat costs an average £679,671. That’s 22 percent — or almost £137,000 — more.

An ex-council one-bedroom flat is the best value of all at £396,317 on average, the Hamptons International study shows. This is more than £146,000 — or 31 percent — less than buying a privately built flat, and more than £283,000, or 52 percent, cheaper than a new-build flat.

New build is always the premium buy, for the peace of mind that comes with a modern, well-insulated home, often with such extras as communal gardens and sports facilities. In today’s tricky market some developers are offering good deals such as paying buyers’ stamp duty to stimulate sales, but the property will always come out more expensive with annual service charges on top.

0100

New — what £350,000 buys you: a flat at Leven Wharf, Poplar, with a terrace and city views but only one bedroom. For sale with My London Home (020 8012 5708)

Not long ago you could have said a new-build flat, bought off-plan, would make you a profit by the time you moved in. The direction of the current market is anybody’s guess because of stamp duty hikes and the fallout from the Brexit vote.

0101

Adrian Plant, director and head of new homes at estate agents Currell, says: “With the new build, you hope you know that for the first 10 years there will not be any major costs. You won’t need to pay for builders and plumbers, and many developments now come with a concierge to handle maintenance and sort out issues like arranging for parcel delivery or laundry, at a cost of service charges.”

Buyers of older homes pay less to purchase, but often then stump up for renovations and/or extensions. Of course, an older home may bring the bonus of period features such as cornicing, wide staircases, stained glass and Victorian tiled floors.

WITH GREAT VALUE COMES GREATER RISK

0102

Old — what £329,999 buys you: a second-floor ex-council flat with two double bedrooms in Clapton E5. Former council homes can be great value, but ask locals what life on the estate is like before you commit to buying

Ex-local authority homes are fantastic value but this is the riskiest sector to buy into. Generally, those built before the Sixties and Seventies are higher quality and larger than a more modern home. But on estates blighted by years of underinvestment, flats can be shabby, common areas depressing and getting a mortgage can be a pain.

However, Stephen Lovelady, sales manager at Foxtons’ Pimlico and Westminster branch, says ex-council homes on his patch are often well built, with good security and sometimes well managed. He says most lenders will offer mortgages on ex-local authority homes in central London, although some will not lend on buildings above six storeys, or of poor construction standards.

READ MORE

Beyond Zone 1, broadly speaking, lenders are happy with ex-council homes in desirable areas and less keen on run-down locations. Buyers must research whether there are any major repairs planned for the block or estate because they, unlike the council tenants, will have to pay a share of the cost. Request a work plan from the local council which will give a five-year list of any projects plus an estimated cost. Your solicitor should investigate any major works when conveyancing your sale.

Communal halls, lifts and walkways are often grim. Bad management, crime, drugs and gangs of teenagers making life a misery are all possibilities on a big estate. A safer bet is a small, low-rise block that’s well integrated into local streets, although this might be more expensive than average.

So before you buy, contact the tenants and residents association to discuss any major problems, knock on doors and chat with residents, talk to the local paper, study police crime statistics and visit the flat during the day and at night.

 

This is set to be positive year for Aberdeen’s commercial market

The political landscape and predictions are widespread over how the snap general election could affect the markets. With Scotland dealing with the negative impact on property investment and market confidence amongst some investors and developers because of the prospect of a second independence referendum.

However, in Aberdeen, the atmosphere has largely driven by the fortunes of the oil and gas industry for the past two years, with the sector now showing largely positive signs. But not to say the wider political backdrop is of no concern, the UK’s vote to leave the EU immediately benefited Aberdeen’s oil and gas economy. The North Sea producers have profited from production costs being incurred in a depreciated sterling relative to a product sold in US dollars, as have local service companies pitching for business around the world conducted in a largely dollar-denominated market. With a growing confidence in the local air which is now impacting itself in our property market.

The office sector was a most impacted sector by the energy industries. The fortunes between 2013 and 2015 fluctuating and with the best quality space have maintained headline rents and interest from occupiers despite carrying a record level of voids. However, it must be said that much of the remaining stock has seen its day, being functionally or economically challenged or located on peripheral estates which have long been a unique feature of Aberdeen’s property supply.  

In comparison, Aberdeen’s industrial market has held up reasonably well. During 2016, take-up was in line with the 10-year average with rents generally remaining stable although the supply of second-hand stock has increased.

Investor appetite for Aberdeen is beginning to show signs of increasing. A North American investor, for example, acquired the Lloyd’s Register building in Prime Four Business Park for £41 million in February, pushing Q1 office investment levels to £49 million, more than the total volume recorded during 2016. Investors are seeking a ‘flight to quality’, looking for well let assets in the city, which may offer more attractive yields than elsewhere in the UK.

The good news is that office lettings in Q1 2017 were 181,000 sq ft (16,815 sq m), the highest quarterly take-up since Q3 2013. This clearly indicates that the local mood has moved up a gear, in part reflected by oil companies Total and Marathon committing to new leases and a number of large requirements circulating.

The further positive news comes with Hurricane Energy announcing a new find west of Shetland with estimated recoverable reserves of a billion barrels and small local independent Chrysoar announcing a $3 billion acquisition from Shell comprising 10 separate assets in the UK continental shelf with funding from US private equity firm EIG Partners.

The smart money is clearly backing a more positive future for Aberdeen and the property market is starting to reflect this.

 

7 THINGS YOU SHOULD BE DOING PRIOR TO MOVING INTO YOUR FIRST HOME

0100 - Article #1

As a first-time buyer, the responsibility can be quite daunting when moving yourself and your belongings into your new haven. Fortunately, for you, the buying process is made easier if you used the more traditional method, via Estate Agents. However, as soon as the keys are in your hands, the responsibility is yours!

So we’ve curated and listed below, our top 7 tips that we believe you should be doing prior to moving into your first home:

TIP #1: Change your address

There is nothing more annoying than having your utility bills, doctors’ appointments and random promotional letters being sent to your old address. Not only is it annoying for you to go back and forth to collect post or have your previous neighbours (family) have to update you on your letters that are flooding in, but it also means that your life is still registered at your old address.

So make sure you’ve updated your Driver’s License, Doctors, Water/Gas Providers or whoever it is that you’ve moved. I can tell you from experience it definitely saves you a LOT of hassle!

TIP #2: Change the locks

Now that the victory key has been placed in your palms, it’s time to throw it away and get a new one. No seriously get a new one!

Estate Agents, tradesmen, previous owners, neighbours, cats and dogs, whoever who may have had access to the house prior to you owning it will probably still have a spare key to your new home lying around. So for your sake and the sake of your sanity; have the absolute reassurance that no-one but you can get into your new home, look into getting new locks installed ASAP.

TIP #3: Spring clean the place

Whether you bought the property in Spring or not, give the place a good scrub. You might be lucky and have the previous homeowners clean up the place for you, but it’s still best to add your touch to the cleaning as you can definitely be certain that your new home is nice and clean, ready for you to decorate.

TIP #4: Don’t throw it away, paint it

If you happen to have a surprise chest of draws left in the masters’ bedroom and you don’t know what to do with it, definitely don’t throw it away!

You may not be excited about the colour or hardware of the leftover furniture, but upscaling and adding your own style to it can definitely reinforce that rewarding feeling of owning something as well as saving you money, but you can also brag to your friends about your handy work. So don’t throw it. Paint it. Style it. Repurpose it.

TIP #5: Get familiar with the community

Now, I’m not saying that you have to attend community meetings 6 weeks consecutively prior to your move or sign up to all the local clubs so that you can become familiar with everyone in the area and have Julie who lives across the road fill you in on the community gossip. I mean if you want to do that you can, and I’m sure Julie wouldn’t mind filling you in.

But rather, we suggest that you acquaint yourself with the local transportation, get a clearer understanding of the local shopping/market on offer and familiarise yourself with the key hotspots/locations around the town. It will save you a lot of mindless confusion and time. So you don’t necessarily have to research the communities’ historical records or look for a Julie.

TIP #6: Check the hardware around the house and mechanical equipment is serviced

Even though some Estate Agents offer those additional services and can recommend to you servicemen/traders to do the job before your move, it’s even more beneficial if you keep on top with the condition of the gas cooker or that the heating and cooling system are still running nicely and have had a good clean.

TIP #7: Throw a party!

Even though this tip applies more when your home has properly been furnished, it is one of our top recommendations.

Invite some friends over for a meal or a drink, not necessarily a party as you might have that one friend who after one or two drinks may decide to wreak havoc among your nicely decorated china display. A get-together is a good way to celebrate your achievement and also make your home homier.

So these are the main things we would recommend you budding first-time buyers consider doing when moving into your new place. Also, an additional checklist would come in handy (that’s a bonus tip), we’ll be providing you with one of your own checklists in the coming weeks!

————————————————————————————————————————–

Also if you have any tips that you could recommend to us, share them in the comments and we’ll be highlighting them in our upcoming articles in the ‘First Time Buyers’ series.

[Opening image sourced from Martin&Co Chelsea listing, check out the property now http://bit.ly/2xuSeEK]

Abbeywood where house prices are way below the London average and price growth is strong at the Crossrail hotspot!

Abbey Wood SE2 postcode has grown by an impressive 76 per cent in the last five years, but the average remains a relatively modest £309,560.

Buyers have been pouring into Abbey Wood in anticipation of next year’s launch of Crossrail — the Elizabeth line — which will cut journey times to central London by almost half an hour.

While the area is not a thing of beauty and boasts few amenities, it has streets of good-value period terraces where a three-bedroom house would cost £375,000 to £425,000. You could get a slightly dated purpose-built two-bedroom flat in Abbey Wood for about £250,000.

The research by Bairstow Eves, using Countrywide data, evaluated average prices in every postcode in London. Then, concentrating on the cheapest 25 per cent of postcodes, it analysed their one-, two-, and five-year price growth to establish the areas where prices are on the strongest upswing.

Bellingham and Catford (SE6), an area well-placed to link to Crossrail services via neighbouring Forest Hill, has performed almost as strongly, with prices up 71 per cent in the same period, to an average £380,641.

For buyers on really slim budgets the bargain basement postcodes are Thamesmead, just north of Abbey Wood, where average prices stand at £252,747, up 60 per cent in five years, and Dagenham (RM10) where prices have grown 66 per cent to an average of £270,878. The once-desolate Thamesmead Estate is currently the focus of a £1.5 billion regeneration. Housing association Peabody was granted planning permission for the first phase of its transformation of the area late last year. There are also plans to link it to the London Overground.

Predictably, none of today’s leading areas are in Travel Zones 1, 2 or 3, where  nothing qualifies as affordable. More than one in three are perched on the outer fringes of London – MitchamDagenhamHarold WoodWellingSuttonNortholtWest Drayton, and Uxbridge. Their low prices combined with good transport links have been tempting an increasing flow of buyers priced out of more central locations, pushing their prices upward.

NORTH LONDON
Nowhere in fully priced west London makes the good-value grade, but representing north London are 
Tottenham (N17), where prices have mushroomed 67 per cent to an average £347,486 — and where billions of pounds worth of regeneration money is being spent on new homes and facilities — and its near neighbour Upper Edmonton (N18) where prices stand at £316,045, up 66 per cent.

The location of London’s cheapest neighbourhoods is a bellwether for change in the capital,” said David Fell, research analyst at Countrywide, who believes that as these regeneration schemes take root further growth is likely.

Over the last 20 years the most affordable neighbourhoods in London have been pushed steadily outwards and eastwards as swathes of the inner city reinvented themselves. Some of the cheapest corners of the capital in the Nineties turned into the boom towns of the Noughties, changing beyond recognition in the course of two decades.

It’s likely to be a similar story for some of today’s cheapest neighbourhoods in London. The arrival of Crossrail and the extension of the Overground will soon plug swathes of south and east London into the rest of the capital. The prospect of these new links is already bringing a wave of new development to some of the furthest-flung corners of the city. Within a decade it’s conceivable that the capital’s cheapest neighbourhood could pop up in west London for the first time.”

 

House Price Index – March 2013

House price increases down but inequality up, says the Office of National Statistics (ONS)

The Office of National Statistics today released the latest house price figures for March 2013, showing that the speed of house price inflation has slowed.

To give you an idea of the comparison at which the rise of prices has slowed, prices across the nation as a whole rose by 1.9% between February 2012 and February 2013.

That compares with a preceding yearly increase of 2.2% in the 12 months to January. Even though these statistics are based on a national coverage, there is however still areas in the UK that are not seeing this slower speed of house price inflation. The nationwide number reflected a broad inequality across different regions of the UK, which appears to be rising.

According to the Office of National Statistics, house prices in London are now rising at 5.9% year on year. Where as in Scotland and Northern Ireland, they have seen deeper house price falls then ever before.

Prices north of the border are declining by 1.2%, as those in Northern Ireland are down by a massive 7.7% over the last year. With stats not that off from London, Wales house prices are now at an increasing rate of 4.1%, up from just 0.9% in January.

Another region in the UK that is performing healthier than most is north-east England, where prices are up by 2.4%. Ernst and Young’s Item Club earlier this week predicted that house prices in the UK would actually stay almost at a standstill over the next two years.

Its prediction suggested that prices would rise to 2.1% in 2014, but recover to 5% in 2015.

National Statistics House price index 2013 (Download Here)

Future updates on the House Price index 2013

Monday 20th May 2013
Monday 15th June 2013
Monday 15th July 2013

With all this in mind, if you are thinking of moving, or buying your first or next property, why not start the search here.

 

Terrific Tips for a First Time Property Investor

Buying your first home can be an exciting time, but it is also one fraught with confusing issues and hurdles which can be difficult to leap. Here at Property Property Property, we know that it can be easy for first-time buyers to feel overwhelmed, trawling through all the estate agents in London (and especially if they view their property as an investment opportunity). Hopefully, the tips given below will be helpful in relieving some of the stress associated with the buying process. Don’t forget to check out our search tool and property alerts service to ensure that you’re among the first to see new properties as they come onto the market near you.

Buying a house is probably the biggest purchase you will ever make, so you need to make sure you are getting what you pay for. Spend as much time as you need on looking at a property because you want it to be right for you. If property investment is your plan, then the same rule applies. Property investment is a challenging, yet rewarding project; use some of the tips listed below if you are a first time property investor.

Do not buy the first property you see
Even if you are in love with the property, you need to do your research and shop around because there might be a better deal. You need to consider a number of aspects, not just how much you love it.

Do not be afraid to ask for advice
If you are confused about your process, then you should ask for advice. By asking for advice, you are avoiding silly mistakes that could potentially be crucial. Property investment is not easy and if it is your first time, then you should really not be afraid to ask for advice.

Work out your budget
Without a budget plan you could cause yourself big problems. The budget is a huge factor in property investment. You need to work out your overall budget for everything; you will need to have a rough price in mind on how much you are willing to spend on the actual property and then another figure for the work you are going to do.

Do not just look at the property once
Go back as many times as you think is necessary. Buying a house is a huge purchase, so you need to make sure you are getting what you are paying for. Make sure you are not taking on a job that is too big for you to handle, otherwise you will struggle to make a decent profit.

Begin with a small project
Do not go straight into property investment with a huge goal, you should start small because you need to find out whether it is right for you. If you figure out half way through the job that you do not like it, then you will wish that you had not created such a huge project. You also need to see what you can do. By all means, go for a larger project after you have experienced the first.

Create a contact book
If property investment is something you are serious about, then it would not be a bad idea to have a contact book that lists a number of people you may need to call; this contact book can include numbers for plumbers, electricians and estate agents. Create good relationships with these people so they will be willing to help whenever they can.

Now you have a few tips on property investment, you can go ahead a begin your project; just remember to take your time. You do not want to rush a property investment project because there is a lot of money at stake; you should begin with a smaller project and then work up to larger ones, once you have got a good idea about what is going on. It is not always going to be easy, but it is most definitely a rewarding job.

Attached Images:
  •  License: Royalty Free or iStock source: http://www.sxc.hu

About the Author: Janet is a financial advisor who deals with a lot of property investors. As a financial advisor, she helps people work out a budget and makes sure they are aware of how much money they need to spend. She recommends online tools and calculators to help plan out a budget.