How to flip a London property?

mercman, dont mind telling you the boroughs, nothing for me to lose only gain, Enfield Council and Haringey Council. these boroughs are now actually loaded with people coming from Turkey, Bulgaria, Romania etc. they seem to be really establishing their areas all around me, post codes, EN3, EN1, EN2, N9, N18, N17, N15, N22. By the way the council must give back the property to me in the condition they got it, that includes furniture, beds etc. and they do this. have owned some of these properties for 10 years now so would expect to do total refurbs before selling whenever that will be so my life in the UK will not end for some time yet as not actually selling anything before we move back including our own home which we intend to rent out too. want to keep my house just in case ! have no need to sell it so why bother.
 
lorna said:
i would have thought by may/june time there will be some good bargains but then again that's assuming you can get a mortgage ! - they are getting scarce too, the lenders are pulling all the good deals at the moment.
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Who needs a mortgage? I see that as my possible advantage if things do get really bad. The fact that possible competing auction bidders cannot get finance, and possibly even more forced-sellers hit the auction market at the same time, may make it very much a buyers market. I can always refinance later to increase gearing once the market improves (even if that does take 5-10 years, I can sit it out).
 
martin77, good luck, let us know how you progress. i am sure this property thing is like a disease and i cant seem to shake it off.
 
I think people quoting this expert report are a little misleading. No where in the report does it mention London. It mentions Manchester and Leeds, which we're all in agreement are falling. Secondly the report only deals with auction sales, it doesnt take into account private sales or sales through estate agents. Also it states that 85% of the sales are distressed sales which means it's probably the bank selling them, so they'll let them go at rock bottom prices as long as their debt is recovered. My personal opinion at the moment is with the current currency rates, the misleading info about London out there at the moment, there are some great investments to be made there. Obviously certain areas of London are better than others. To check out the full report click here [broken link removed]
 
London as a region in the short term is a leveraged bet on the financial services industry.

This area has hired alot in past 5 years and this will now reverse for probably 2 years. It also has funded the labour govt via taxes.

Prices in london ran up far too much when the UK central bank cut its interest rate about 2 years ago in massive error.

Top to trough I would think could see falls of 20% plus while distressed sales could show a further 10% off.

All the amatuer BTLer buying any new build from 06 will get hammered in London if they have sell pre 2010.

Taxes have got to rise from outside the city to fund govt and these will be indirect and direct. Add in rising oil prices and it is going to take a while to digest.

No one wants UK mortgage assets this year or next as security and mortgage rates are going up - witness RBS increased today as will other banks in order to get profits that have disappeared from the trading sides of their operations.
 
I have just returned from London where I was on property business. I am sorry euromortgage but matters in London are worse that I thought. And it is total coverage. The central London market would be off in the region of near 25% and the boroughs prices depends on the region. South London appears to be worse than North London. There are and will be further bargains, but be prepared to hold. Simply I am saying that there are no quick flips to be done in the present market conditions.
 

Mercman - my place is right in the middle of canary wharf.

Any insight as to how that area is ?

I have been onto an estate agent that are prepared to flip it for me.
I have given them the details of the property and am waiting on them to get back to me with a valuation for selling it on.

I bought it this time last year. So i'm curious as to what proice they come back with.THey sholuld be back to me in the next day or two.

Aa a side issue - they are charging a 2.5% charge.

Does this seem reasonable ?
 

Canary Wharf means bankers. Bankers are not so well these days.
If the agent can get you out with a 5% fall in price then will be doing well.
Know a fantastic house for sale targeting Canary wharf bankers and its been on market for 6 months. Last year this would have sold in 2 weeks.

The FT leads today with story that 1 in 3 mortgage applications in UK are being refused finance at the moment and number of mortgage deals available is down from 15,000 last year to about 4,500 today and continuing to fall.

My advice is probably keep it to the next boom in financial markets
 
If the agent CAN rather than try to flip it then go for it. Otherwise, take the advice of Maine if you can afford it and hang on. There is nothing more soul destroying than waiting for months and months trying to sell a property. If he can do the business 2.5% is Ok. Otherwise they are full of hot air trying to mplace properties on their books.
 
Maine said:
Canary Wharf means bankers. Bankers are not so well these days.
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I'm not sure that statement is true for all situations for property in canary wharf for a number of reasons.

Firstly - this is a one-bed apartment in canary wharf.

While some of Londons property market may be determined by bonuses of bankers and the like I don't think this applies for 1-bed apartmenst.

The guy who would be buying a 1-bed apt. would be the guy who would be using his basic annual salary as his security to teh bank - as opposed to the guy whose bonus is multiples of his basic salary.
I reckon hiogher end properties in that area would be more affected by lack of bonuses - not your runof the mill 1-bed.

Secondly - I think a lot of regular apartmenst would be bought by investors as opposed to owner-occupiers.
Now - while a lack of bonuses to the banking community may decrease the number of people going for buy-to-lets, I don't think it will have a huge impact.
As i say - I think teh higher nd will be affected more so by this.

Lastly - Going by what I've read I don't think London property has been affected all that much just yet.
DOn't forget that London was boomin in teh first 6 months of last year - so there are gains that will have to be eaten before you go into negative territory.

Anyway - I am expecting teh agent to get back with the valuation any day so i will keep yee posted.

Just for the fun of it i will make my prediction befoe the agent gets back to me.

I bought it fopr £322k last April.
I reckon it will be valued at slightly above this.
I'm gonna go with £335k. (i.e. c.4% gain over the year)
ANy guesses anyone ?
 
Don't want to burst your bubble Qwerty but I think you paid way over the top.

What sq footage?
Parking incl?
How many appts in development? Floors?
Have you paid full deposit?
 
Qwerty,

I also have 2 properties in the Canary Wharf region.
I do not think its a good time to sell but you could give it a go.
It really depends if you have purchased a unit with a point of difference as you will be competing with other sellers and off plan developments.
As for the price it really depends what location and development you have purchased in and for example in Ballymore's Pan Peninsula development 1 beds start at £500,000.
The rental market is very good and I think you are spot on about the strategy of renting out a 1 bed. So far no significant price drops have appeared in any of the price indices ...ie...Hometrack, Nationwide, Halifax, RICS but I am sure teh UK is in a for a painful year with perhaps -5% declines.
I do not know where the -25% came from perhaps the poster could qualify the information backed up with facts.
Finally 2.5% agents selling fee is excessive so I would get 3 valuations done and try to get 1% which is normally achieveable.
Hope this helps hang in there.
 
From the Times

Peter Jones, the upmarket department store owned by the John Lewis Partnership, reported its worse sales slump this year as London's monied classes slammed their wallets shut during the early, snow-filled Easter week.
The store, based in London's Sloane Square and commonly frequented by bonus-rich City workers and their families, said that sales in the six-day week to March 29, slumped by 20.9 per cent — the third consecutive week of double-digit declines.

I accept that the those paying 335k are not those on multiples of basic.

300k mortgage at 7% is 21k plus 10k repayment = 31k plus 3k to cover council taxes and service charges = £35k so probably looking at those on 120k+ package gross and some of those are definitely in the firing line.

For example would be surprised if any UBSer/Citi trading division is buying anything as 9000 in UBS alone are facing some tough news

Now Peter Jones is bit more expensive than John Lewis (same group) which is booming but is probably pitched well below BTs in Ireland. This reflects my view that this is currently a rich peoples recession in London but this will impact where they spend
 
Was listening to Martin Ellis Chief economist from Halifax yesterday. He was working hard to avoid saying the market is tumbling.

having listened to him for past 10 years it was a bit worrying to hear his efforts to give it a positive spin.....seemed like the pressure was on

the problem is no one wants property assets as security so calling a static housing market damages your existing loan portfolio.
 
Mercman, sorry I was so dubious about what you are saying. I hadn't realised that property was dropping so much in certain areas. Good wake up call.

I have a property in South London, Sydenham, SE26 which is currently rented out.

It would be seen by some people as an 'up and coming' area, probably because of the improving transport links due to the East London Line Extension in 2010, as well as the drift of young buyers priced out of neighbouring areas e.g. East Dulwich and all that.

Starting to see some yuppification of what was a run-down area.

With hindsight, esp with the way sterling has gone, I would have got more for the property a year ago than today. Luckily I had removed as much equity as possible and bought euro at a good rate.

In any case, I think I will stick to my gameplan and keep it til at least 2010 and probably well beyond that if the market looks like recovering.

The currency damage has been done, and it sounds like market drops are at least partly priced in now, hopefully the transport improvements and the fact that it will be on the Tube map in two years time will counteract any general drop in London property prices.

If the general market drops further, it may even be a buying opportunity.

Any thoughts or advice for me?
 
eamonn, well at last you have noticed. The most important thing now is not to panic. I have spent the last few days meeting and talking with Banks and the outlook is not to bright. It will come back but it will take time. Residential I would say two years and Commercial three. But its depending on the US and as to when they can get a grip of their own home problems. A buying opportunity exists but I would say hang on another few months when the curve turns on lending and mortgages which are becoming near impossible for Joe Average.
 
Cheers for the advice Mercman.

Glad to hear your thoughts on what to do i.e. sit tight, as that is what I intended to do. I have good tenants who are very happy with their deal, they give me no hassle as the place is in good condition, their rent covers the mortgage with a bit to spare, so as long as it washes its face to use a horrible cliche, then I will hold on.

As you say, if credit gets even tighter, [or do i misunderstand you - do you mean it may get looser?] there will be fewer buyers, prices may drop and it may be time for that equity to cross the ditch again, hopefully gaining around 15% or more compared to when it came across, and I can reinvest.
But I don't think the market is quite at that level yet, unless you are doing as Lorna does, but I don't have the knowledge or contacts for that game.

I guess there is always a chance that sterling would swing back the other way in the future as well, but I guess that would be a bonus and not something you could bank on.

It would be a lot to hope for to have property going back up, and sterling high, whenever one is ready to cash in.

But I suppose an investor who is not in a rush to cash in can afford to bide his time and wait for conditions to be favourable, whether that is due to the market or currency, or ideally both.
 
Well if sterling doesn't rebound this country's exports are for the birds, with drastic future events. Problem is that the ECB is more watching the German economy than the others and has a firm eye on inflation rather than the world economy. Interest rates need to drop by a full 1% (which they won't) to put an equilibrium in the market. Property will come back albeit the view is getting a little hazy at the moment. Funny thing is in Ireland the working populus outside construction have good well paid jobs.
 
David Sandeman of property research specialist EIG, which, with auctioneer Allsop compiles authoritative data on auction properties, says the average flat built since 2005 is fetching about 26% less than its original price and more than 15% will not sell at all. 'This is the tip of the iceberg,' he says. 'Everyone is just realising now what these properties are worth - and their values will be pushed down more. Investors are battling to refinance. They will go back to the brokers who found them mortgages in a flash three years ago - but there won't be any mortgages there now.'
 
London will remain flat in my opinion until the tail end of 2010. If you are to invest there, most investors stick to North London as the tube network is more accessible and the nearer to a station the better.

South London has good rail links but can be very unpredictable. Tube links are fantastic but avoid the Northern Line locations, it's a failure in modern transport.
 
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