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£100K homes return to London
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FoxtonsRIP
Posts: 323 Forumite
House prices are plummeting in the capital which is surely great news for almost everyone who lives there.
http://www.thisislondon.co.uk/standard/article-23595744-details/Return+of+the+100%2C000+home/article.do
Return of the £100,000 home
Mira Bar-Hillel and Jonathan Prynn
02.12.08
London is seeing the return of the £100,000 home as property values plunge.
The Evening Standard has found a string of homes being sold for five-figure sums not seen in more than a decade.
At one auction sale last week 18 lots changed hands for £100,000 or less, an extraordinary total given that only 42 homes were sold in the whole of London in this price bracket in August.
Most of the lots, many of them repossessed properties, were snapped up by developers or landlords but some went to owner-occupiers.
Homes in inner-London boroughs such as Southwark and Lambeth were among those going under the hammer for less than £100,000.
The figure will bring hope to first-time buyers that they will be able to find affordable homes in London.
Sub-£100,000 properties could prove crucial to getting first-time buyers back into the market as banks force people to put down deposits of 25 per cent on homes in the wake of the credit crunch.
One property analyst said: "If you saved a deposit of £25,000, which is not unrealistic for a couple on average incomes over a period of a few years, you are now in a position to take advantage of falling prices.
"Equally, many parents will be able to help their children with that sort of deposit."
It all comes after a dramatic rise in repossession orders, with 26,200 homeowners losing their property last year alone.
At one auction sale last week at least eight out of 10 properties on the catalogue were repossessions.
At the sale, by Allsop Auctioneers, a total of 1,100 homes went under the hammer and 18 lots changed hands for £100,000 or less.
The dramatic return of the £100,000 London home astonished experts. In August only 42 homes were sold in the whole of London in this price bracket. One lot, a three-bedroom flat in a council block in Brixton, was sold for only £79,000 to a buy-to-let investor, who told the Evening Standard: "I first saw this flat a few months ago, advertised by local agents at £149,000.
"Then by chance I saw it in the Allsop catalogue and went to the auction and got it for well below the limit of what I was prepared to spend. It was an absolute bargain. This is my fourth investment flat. I started buying last year and bought the third in August, also for a good price.
"I will let it until the market recovers, and when it comes back to what I think is its real value I'll sell."
Lot 738, a two-bedroom flat with two bathrooms and two balconies in a gated development with communal gardens in Abbey Wood in east London fell for just £96,000. In April 2004 the flat was sold for £187,495 and the unlucky former owner could easily have expected it to be worth at least £300,000 last summer.
Another lot, a new one-bedroom flat in a stylish block of flats in Lordship Lane, East Dulwich went for £100,000. It was bought for £175,000 in March 2005 and could have fetched around £250,000 at the peak of the boom.
The auction - which required two heavy catalogues - was Allsop's biggest ever. This has been their busiest year, with 3,600 lots compared to 2,320 last year and 2,271 in 2006.
Allsop chief auctioneer Gary Murphy said: "Each day attracted strong bidding. There was a significantly higher proportion of private buyers this time. Prudent buyers have the opportunity to enter the market once more."
Repossessions are usually first offered through estate agents. If they fail to attract buyers after a number of months they are entered for auction.
Mr Murphy said: "The auction room seems to be the only marketplace that's working currently."
The return of the £100,000 property will be welcomed by first-time buyers and key workers who have found themselves priced out of the capital.
It is 12 years since the average price for homes in London burst through the £100,000 barrier. But the recent surge in unemployment and the return of negative equity are likely to see repossession figures return to the record levels of the early Nineties.
http://www.thisislondon.co.uk/standard/article-23595744-details/Return+of+the+100%2C000+home/article.do
Return of the £100,000 home
Mira Bar-Hillel and Jonathan Prynn
02.12.08
London is seeing the return of the £100,000 home as property values plunge.
The Evening Standard has found a string of homes being sold for five-figure sums not seen in more than a decade.
At one auction sale last week 18 lots changed hands for £100,000 or less, an extraordinary total given that only 42 homes were sold in the whole of London in this price bracket in August.
Most of the lots, many of them repossessed properties, were snapped up by developers or landlords but some went to owner-occupiers.
Homes in inner-London boroughs such as Southwark and Lambeth were among those going under the hammer for less than £100,000.
The figure will bring hope to first-time buyers that they will be able to find affordable homes in London.
Sub-£100,000 properties could prove crucial to getting first-time buyers back into the market as banks force people to put down deposits of 25 per cent on homes in the wake of the credit crunch.
One property analyst said: "If you saved a deposit of £25,000, which is not unrealistic for a couple on average incomes over a period of a few years, you are now in a position to take advantage of falling prices.
"Equally, many parents will be able to help their children with that sort of deposit."
It all comes after a dramatic rise in repossession orders, with 26,200 homeowners losing their property last year alone.
At one auction sale last week at least eight out of 10 properties on the catalogue were repossessions.
At the sale, by Allsop Auctioneers, a total of 1,100 homes went under the hammer and 18 lots changed hands for £100,000 or less.
The dramatic return of the £100,000 London home astonished experts. In August only 42 homes were sold in the whole of London in this price bracket. One lot, a three-bedroom flat in a council block in Brixton, was sold for only £79,000 to a buy-to-let investor, who told the Evening Standard: "I first saw this flat a few months ago, advertised by local agents at £149,000.
"Then by chance I saw it in the Allsop catalogue and went to the auction and got it for well below the limit of what I was prepared to spend. It was an absolute bargain. This is my fourth investment flat. I started buying last year and bought the third in August, also for a good price.
"I will let it until the market recovers, and when it comes back to what I think is its real value I'll sell."
Lot 738, a two-bedroom flat with two bathrooms and two balconies in a gated development with communal gardens in Abbey Wood in east London fell for just £96,000. In April 2004 the flat was sold for £187,495 and the unlucky former owner could easily have expected it to be worth at least £300,000 last summer.
Another lot, a new one-bedroom flat in a stylish block of flats in Lordship Lane, East Dulwich went for £100,000. It was bought for £175,000 in March 2005 and could have fetched around £250,000 at the peak of the boom.
The auction - which required two heavy catalogues - was Allsop's biggest ever. This has been their busiest year, with 3,600 lots compared to 2,320 last year and 2,271 in 2006.
Allsop chief auctioneer Gary Murphy said: "Each day attracted strong bidding. There was a significantly higher proportion of private buyers this time. Prudent buyers have the opportunity to enter the market once more."
Repossessions are usually first offered through estate agents. If they fail to attract buyers after a number of months they are entered for auction.
Mr Murphy said: "The auction room seems to be the only marketplace that's working currently."
The return of the £100,000 property will be welcomed by first-time buyers and key workers who have found themselves priced out of the capital.
It is 12 years since the average price for homes in London burst through the £100,000 barrier. But the recent surge in unemployment and the return of negative equity are likely to see repossession figures return to the record levels of the early Nineties.
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Comments
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FoxtonsRIP wrote: »House prices are plummeting in the capital which is surely great news for almost everyone who lives there.
No it isn't, more affordable houses are BAD you damned doom monger!
Just kidding - great news.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
That Lordship Lane flat for £100K is a real eye-opener. This is a well connected, reasonably trendy place, not far from the ever desirable Dulwich Village.
Mortgage Introducer
City workers slash prices in areas of London with strong transport links to the City, such as Shad Thames, Wapping, Battersea and Clapham
They are traders, after all and recognise a market when they see one.
The only thing we might disagree with, here is the conclusion from Cluttons that:
"these properties now offer excellent value for money"
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but how many first time buyers buy at auction?0
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Actually, the 3-bedder in Brixton for £79k was a good buy - bought by a BTL investor. I am not sure what the local reference rent is for 3 beds, but say £250 per week as a guess? So, the gross yield is around 16%. OK!No reliance should be placed on the above! Absolutely none, do you hear?0
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Great news but the flats featured in the photo section are still waaaaaaay overpriced. £295,000 for a 1 bed flat in Clapham. You've got to be joking. I reckon it needs to fall a long way in this market to attract a realistic offer.0
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Yes theres enormous pent up demand, and pretty much everyone on an average income has £12.5k in the bank, its pretty much to be expected in the most indebted country per head in the entire world.One property analyst said: "If you saved a deposit of £25,000, which is not unrealistic for a couple on average incomes over a period of a few years, you are now in a position to take advantage of falling prices.
Christ.0 -
Actually, the 3-bedder in Brixton for £79k was a good buy - bought by a BTL investor. I am not sure what the local reference rent is for 3 beds, but say £250 per week as a guess? So, the gross yield is around 16%. OK!
Perhaps it is just my circle of acquaintances and friends, but quite a few in the £25K to £40K salary range in the financial sector are fearful of unemployment and pay-cuts, with some very worried working environments. Although that is in the North.
Current yields mean very little to me, in any valuing context, as I doubt they can be supported.0 -
Great news but the flats featured in the photo section are still waaaaaaay overpriced. £295,000 for a 1 bed flat in Clapham. You've got to be joking. I reckon it needs to fall a long way in this market to attract a realistic offer.
For a split second I thought it was the whole house for £295k.:o:o:D0 -
Perhaps it is just my circle of acquaintances and friends, but quite a few in the £25K to £40K salary range in the financial sector are fearful of unemployment and pay-cuts, with some very worried working environments. Although that is in the North.
Current yields mean very little to me, in any valuing context, as I doubt they can be supported.
It's a great yield and I'd say that 250 a week was easily supportable in London. Even at 200 (which would be really cheap) it's a 13% yield.
The very cheap ones at auction however are going to be problematic and without being bothered to research it, I'd put money on a short lease or a huge maintenance bill to take a chunk out of that yield. 79,000 really would be spectacular. My one bed in Streatham was 55,000 in 1999 and that was tiny like a shoebox, needed gutting and had a relatively short lease - if it didn't already have enough going for it.Everything that is supposed to be in heaven is already here on earth.
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I wonder if that property 'analyst' is Krusty Allcrap? Keep on ramping those prices KrustyFoxtonsRIP wrote: »One property analyst said: "If you saved a deposit of £25,000, which is not unrealistic for a couple on average incomes over a period of a few years, you are now in a position to take advantage of falling prices.
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