First-time buyers are priced out as number of flats sold in London tumbles

London’s flats have decreased in sales as the prices are out of reach for ordinary first-time buyers, according to new research.

According to figures from Home.co.uk, which analyses data from the Office for National Statistics and property portals, which the number of apartments sold in the capital fell by 47pc in July compared to 12 months previously.

The number of detached properties sold in London fell 5pc in 12 months to July this year, with sales of terraced houses down 8pc. This comes amid a general slowdown in the level of transactions across the country, and particularly in London.

According to the Land Registry, the average price of a flat in London increased by 3.9pc in the 12 months to July to £434,587. The price growth of flats is outstripping all other property types across the country, partly due to a lack of supply, being led by the rises in the capital.

With the slowdown in sales signals that affordability has been crunched and many first-time buyers, who would typically purchase these properties, are sitting on their hands and waiting for a correction in prices. 

While the Government’s Help to buy scheme has allowed many first-time buyers across the country to get on the property ladder with a 5pc deposit, the take-up in London has been far lower. The threshold of £600,000 means that many newbuild properties are too expensive to qualify and analysis by the BBC earlier in the year found that while Help to Buy is used to buy one in three new-build homes outside London, in the capital it is just one in 10.

Other natural buyers of these properties, buy-to-let landlords, have also been squeezed by changes to the tax regime and many are sitting out buying opportunities or selling up their portfolios.

Lucy Pendleton, the founder of estate agency James Pendleton, said: “Solid numbers of people are showing some reluctance at current prices and signaling to all the other market participants they can’t transact unless they come back down to earth.” 

A correction could soon be coming: data from Acadata and LSL property services found that prices in London have fallen the most since the financial crisis. Average property values have fallen 2.7pc in the year to September, the most since 2009.

 

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.

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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.

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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

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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.

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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.

 

How to Find the Cheapest Homes to Rent

How to Find the Cheapest Homes to Rent

Rental propertyWith the current state of the economy, it’s no surprise that those who haven’t yet been able to get their feet on the first rung of the property ladder are struggling with high rents. Throughout the country, rental costs are increasing faster than wages, meaning that it can be difficult for potential tenants to find a home that they’re going to be happy in. Those who are looking for cheaper accommodation should bear the following in mind:

Compromise

We know it can be hard, when you begin searching for a new home with certain expectations, to adjust your predictions when you realise that you’re not going to be able to live in the kind of home you had wanted originally. With that said, it needn’t be a disaster. Several aspects of your ideal rental property are probably available for compromise. if you commute on the train, you probably don’t want to look too far from the railway station, but do you really need a separate living room? Or will a combination kitchen/living area suffice? Do you really need a garden? You get the idea.

Get a Housemate

For obvious reasons, this can dramatically reduce the amount of rent you have to pay. Finding a housemate will probably be very easy in highly-populated areas, especially given that many people will be in exactly the same position as you are. If you were already planning to live with someone, try to convince them of the need for a third person. And this doesn’t mean that you need to start looking for 3-bedroom properties – take a leaf out of a student’s book, and turn the living room into a bedroom. Suddenly, you’re splitting the rent on a two bedroom property between 3 people, and things start to look much more affordable.

Check the Market Often

From time to time, you will find very good deals on the rental market – only to find that someone else got there first. By checking frequently, you can increase your chances of finding a great home and booking the first viewing. PropertyPropertyProperty can even simplify this for you by setting up free property alerts. Just register with your email, or simply log in through Facebook, and we’ll be able to send you information on properties matching your specification as soon as they hit the market.

R-Patz Seeks Property in London?

R-Patz Packs For London

Having recently split with long term partner Kristen Stewart, Robert Pattinson looks to be selling his glamorous Los Angeles mansion and heading back to London. With the temptation of a pint in his local pub and a Sunday roast, it seems the LA lifestyle wasn’t all that it was cracked up to be. With Robert currently having no fixed abode, we look at some suitable living quarters which are available to rent in London where he can marvel in all things glitz and glamour whilst at the same time having the home comforts which were so greatly missed.

The City of Westminster

Most likely, Robert is looking to carry on living the life of a singleton and what better place to do so than in Grosvenor Square, Mayfair. At £4,500 per week, Robert could rent a four bedroom apartment situated in a luxurious mansion block with original features restored to give the sense of authenticity, not forgetting though, the state of the art CCTV surveillance to keep any fans at bay. With 24 hour access to a porter included, Robert can always send the porter to run any short errands that may occur during the early hours.

The Family Life

If Robert is looking to settle with a fellow Londoner, maybe a more family orientated home would be more appropriate. Ealing Green boasts a number of Grade II Queen Anne Town Villa’s at a very luxurious price of £1,038 per week. For this Robert can expect all mods cons situated over three stories, including a large garden to host an after show parties for celebrity fans.

Bachelor Pad

With so much property in London to choose from Robert may find it difficult to choose the right home. For the short term Mr Pattinson may want to escape the limelight and all the other trinkets the celebrity lifestyle has to offer. For this the ideal location would be Marylebone, London. For £950 per week, Robert could live the bachelor lifestyle in peace. £950 per week will ensure his flat has three bedrooms (for any unexpected visitors) and ample storage space to store any awards that may have gathered over the years.