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Beat the London Property Boom

Ok so maybe the headline caught your eye and you thought “is this guy nuts!” (Sometimes!). But it wouldn’t surprise me if this is the headline on the front page of London papers within 18 months and listed below are a few reasons for my choice of headline.

Appetite Versus Confidence – End User Market

Yes, the buzz word for the last two years has probably been ‘uncertainty’ and estate agents will probably confirm that most of their end user clients are ‘waiting’ to enter the market. However, appetite for purchasing is definitely there, the British fixation with owning their own home has not disappeared (Monopoly is basically on their school curriculum as homework!) it’s just the cautious side of character which is holding the buyer back.

So, have a think for one moment what will happen once the global outlook or perhaps looking closer to home, the Brexit question shows signs of being resolved?

I take the view that you will see a wave of activity hit the market. And this is a market with limited stock at present with many owners choosing to renovate rather than moving and selling for a ‘reduced price’. So, when confidence returns, so will buyers and they will be competing for this limited stock. Agents will see what is immediately happening and commence valuing higher and they will probably achieve these augmented prices. The market will inevitably move upwards.

Opportunity is Knocking

So, should you wait to enter the market with the masses or would now be a good time to capitalise on what is a soft market? The counter argument to the above would be that prices will become even softer, as the Brexit question no doubt still has some distance to travel. Though any trader will tell you, trying the pick the bottom of any market requires a crystal ball. So, ask yourself this question, would you prefer to purchase when the market is rising and no doubt at higher levels than today?

If you are buying with a 5-10-year plan or longer if you are purchasing a home, then NOW is the time to enter the market. Prices may soften further but if you follow certain buying principles you can achieve below market levels now. Try not to over complicate the process, I am sure you have heard of ‘buying low and selling high’ and in my opinion, we are in the ‘LOWS’ now!

Take the Plunge

Do consider also that a property is principally a home before being an investment. It is all too easy to find excuses not to buy in this market so unless you believe prices are going to fall off the cliff, take the plunge! Is renting for another year showing good investment nous?

Transactions are still occurring in London and resistance levels do exist (if a property shows value it will get bought). Have a look at what happened to prices post the credit crunch in 2008. It didn’t take long for prices to be rise above these levels again.

The majority of my buyers are coming from overseas at the moment, and they are taking advantage of these market conditions. So apart from a currency play, why has the international buyer got more confidence in the market, especially as they are buying for purely investment purposes? And even though we have heard about further taxes to international buyers from the government, I doubt this will dissuade them from the UK.

London is a primary choice for the international investor and although I have seen some of my peers knock this policy (and yes stamp duty is getting a bit out of control), if anything, it is already employed in many global cities around the world and brings the UK in line.

So, the good news for the serious buyer out there is that the Property Boom isn’t happening just now. There is still time to get ahead of the market and play on the uncertainty that is apparent. Just do not wait too long and miss the buying opportunities and potentially price yourself out of the market once the uplift returns.

Look forward to your comments and feel free to DM if you would like to discuss how I can assist your purchase.

Use statistics but don’t be led by them

Use statistics but don't be led by them!

Remember, when you are buying a property, it is not a statistic. When you read a national statistic saying that property in the South East has fallen 3%, or London is down 10%, it doesn’t follow that the property you are viewing will follow this figure. Each property has to be judged and valued individually, no matter what the market conditions are.

It is a great time to be buying.

The majority of my clients right now are savvy investors who can see there is value in London. The market is softer this year than it was last, but this doesn’t guarantee you will get a deal. If you are going it alone (without my help), make sure you follow some basic buying principles, or you may over pay.

5 basic buying principles for your next London property purchase

  1. Seller that wants to sell: Find that willing seller (they may not be desperate, few are in London, but seek out what the motivation behind the sale is).
  2. Don’t view the new: Ideally only view property that has been on the market for three months (new property that hits the market are often overvalued. It will take a few low offers for the owner to realise that that low valuation they had was actually correct). There is no point wasting your time.
  3. Don’t be pressurised: Make sure you view numerous options and then cherry pick. This is a buyers’ market with a low chance of being gazumped. Remember, the owner probably needs you more than you need them.
  4. Research what the selling price per sq ft is: Agents may tell you that they “don’t value property in this way” but you should, just make sure you are not comparing a basement flat with a first floor as the sq ft price will be different of course. Each transaction should have a spreadsheet. You’ll see what the going rate should be and then try and negotiate under this.
  5. Negotiate slowly: Don’t get too clever or cocky as you need the agent on side. Rather, justify your offer with evidence derived from point 4. If you increase, do this gradually in your own time and when you do, hit them with a newspaper headline or national statistic. Just because you do not believe in the statistic, doesn’t mean you cannot use them!

No matter how the market is behaving, there are always strategies and opportunities that you can take advantage of – you just have to find the right angle. If you’re looking to capitalise on the current market in London, please get in touch for a no obligation chat. Call me on 07946 311 002 or email me at matt@astutepropertysearch.co.uk.

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