We are looking to tie up a deal shortly, in the W2 area. The property was on the market for £1.8m last year, and even attracted bids of £1.5m, which the owner chose not to accept.
However, we are now in a different time period, which is affected by various factors. Correction, it is not actually directly affected by any of these factors at all. Behind every property there is a human being, and it is their perception of the factors which then have the effect of altering property prices, not the events themselves.
Humans tend to stagnate and put their heads in the sand whenever there is adversity or uncertainty. Fear of interest rate rises, and uncertainty surrounding Brexit, have been accused as being the main culprits for this environment.
In the market there are always those who have to sell, they do not have the luxury of choice. At Sow & Reap, we make it our business to get to know these sellers, and make acquaintance with them.
There are aspects of life you just can’t get away from, namely death, distress and divorce. They can also occur sequentially, someone can get distressed, then divorced, these two can of course be interchangeable, and then die.
Such personal situations are bad enough, coupled with an external dampened property market creates a harvest where there can be low hanging fruit for grabs by the astute investor.
This year, most commentators are predicting a flat market at best, and probably whereby in real terms there will be a decline in prices.
Generally, this creates an excellent environment to purchase property. The issue is, if a market is in decline, the question people ask themselves is: what if after I purchase a property, the price drops even further? This mentality causes lethargy, and very few people have what it takes to take the decision and action to do a deal.
At certain prices there is no question of whether a property is a deal or not. When you can purchase in W1, W2 and Marylebone at prices which range from £650 to £750 per sq. ft., there is no question of this being a deal. The prices here usually start from £1,000 sq. ft. as a bare minimum.
Currently, we are in the process of securing a contract for a period property in W2 for only £658 per sq. ft. There are no issues with the property, for example, no short lease or a massive service charge around the corner. Prices on this road normally go at around £1,100. This is a massive 40% discount to the normal prices.
Just to contradict everything I have written, I will throw something into the mix. Just this week, a property has sold for £6,100,000 in W2 within 5 days. This represents £1,813 per sq. ft. This flies in the face of the picture which I have painted. It demonstrates the diverse nature of buyers for the London market. Clearly, there are some for which a bargain is not at the top of their agenda. They may want a beautiful turn key place to live, and time may be precious; therefore, they do not wish to waste time haggling or wait when they have seen something which exactly fits their criteria.
If you like the sound of this deal, call the office now to find out more.
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Agony Agent Is Here To Help!
Following on from last week, I thought I would share some more information about HMOs.
HMO licences are valid for five years at a time, and you will need a different licence for each HMO that you have; unfortunately, you cannot have just the one. To comply with the licence, you'll need to make sure that a valid gas safety certificate is sent to the council each year, smoke alarms need to be installed and safety certificates for electrical appliances must be available on request. Some council rules will differ, so make sure you read and comply with everything your local authority requests.
Depending on how much work needs to be done to the property, and the type of work to be carried out, you may also need planning permission. Again, this will depend on the changes you are looking to make, the type of property you have and the local authority. Make sure no matter what you do, that you keep any emails, letters or post that you have received from the local authority, as you never know when you will need them.
You may be wondering why you would need to make alterations to your property. This would again depend on how in-depth you want to go with this project. First, consider what your new tenants are going to use and require, and how much space they are going to need (most councils have a minimum requirement for bedroom and kitchen size). Don’t forget that you will need to fully furnish the property, from beds to knives and forks. Any, and all, furniture you supply will need to comply to fire safety standards; and all soft furnishes must have fire safety labels on.
Within the valid five years of the HMO licence, you will be visited by the council and they might not give notice of this inspection. They will attend, and more than likely carry out a Housing Health and Safety Rating System risk assessment.
If any risks that are found during the assessment they must be addressed, fixed or replaced.
Aside from rules and regulations, when planning your HMO, ask yourself “would I be happy living here?”; if the answer is no, then you are more than likely going to struggle to get tenants.
Next week we are going to cover one of our working HMOs, which we are managing for a client.
In the meantime, if you have any HMO questions, or if you are considering converting your property into an HMO, please feel free to contact me.
Richard Bond
Lettings Manager
Sow & Reap
