advice needed - flat on market for 5 months and 3 viewings

TheCountOfNowhere_2

Thanks Stella.

Just one more thing.

Try and get rid of it now, rather than waiting for everyone else to realise we've been duped.

On a brighter note london does seem to have some people paying a good price for places at the mo, but the land registry sales volumes are still at a historically low level despite this, so you will have to be lucky. The longer lease should help.

I wish you all the best.

Errata

As the flat is a conversion, was it originally a 2 bedbroom terrace. The kitchen and bathroom both have a sloping celing, are they in an extension to the house ?
Is the street entrance to the flat at the side of the building and straight off the street ?

hoggums

Stella my advice is to assume you can't make a profit on it (you've got solicitors fees and estate agent fees to factor in) and plan accordingly.

It you can cover the mortgage renting it out then do so and rent somewhere larger yourself if you need the space - then save money like mad so you can buy the lease and sell the property.

Of course delaying your sale may mean you get an even lower price in the future - it's the risk you take.

Bomber07

stellaforstar wrote: »

well, we feel the need to walk away with some sort of profit because we have invested 6 years of our money into the property. we didnt buy it as an investment in the first place, but it is the only asset we have.

Two contradictory sentences there? Is it an investment or not? like any investment, some you win and some you lose.

Bottom line is, as you say, you have to pay off debts and you want to sell this flat for as much as you can to cover your debts. That's only natural, fair enough, but you're asking way too much for it, IMHO.

As others have said, I would cut your losses now and price it to sell quickly before you end up chasing the market down for a very long time.

All the best, genuinely.

When_is_the_reset?

There seems to be a lot of this kind of problem going around and I must say that I agree with most on here when they say that if the place is not selling then it is simply too expensive. Profit is something that should arise from business trading or investment not the place you live.

We have not seen the last of the price drops in property yet and it may be best to take what you can while the going is good.

Personally, I want everyone to realise that it is best if prices fall - I want my children to be able to afford a home and not to rent from some BTL investor and pay for their retirement.

Fire_Fox

stellaforstar wrote: »

well, we feel the need to walk away with some sort of profit because we have invested 6 years of our money into the property. we didnt buy it as an investment in the first place, but it is the only asset we have. when youre short of cash and need to pay off debts, or change your circumstances, what do people tell you to do (including this website?) - sell your assets. well, this is our only asset so we need to sell it and theres not much point if we walk away with a loss.we would be better off renting it out. if we sell at a loss we are left with nothing - no money to pay off debts, no collateral for another property or even savings to help us rent for a while.

i also do not expect someone should take on a greater mortage just so i can make a profit - thats an absurd comment. i simply expect someone to buy it who can afford it - or come on in and make us an offer. thats what went wrong with our original offer last year - she was too over streched and it fell through. well - she never should have been looking at it and never should have agreed to the offer if she couldnt afford it.

i am fully aware we have missed the boat on selling the flat for a wild profit. thats not what i am expecting.

Stella your flat is so overpriced you are not even enticing prospective buyers through the door. We are in the middle of a recession: even if you get an offer the lender's valuation will fall short as it will be valued with a 77 year lease.Either reduce the price, extend the lease or sit tight and wait for the market to rise in a few years. If you have debts, pay them off while you are in a small property with cheap bills: the Debt-free Wannabe board can help you with this. I have already linked to a website that explains how to go about extending your lease.

googler

doire wrote: »

Potential viewers/buyers could no doubt google your address and might end up at this thread. So why on earth post that comment?

Even worse, what if the downstairs neighbours google their own street?

googler

OK, someone said that some lenders won't lend on less than an 80-year lease, and the OP here has a 77 year lease - would someone explain why this 3 years is so important, when NOBODY who buys the flat now will be there when the lease expires....?

Is there any other reason a 77 year lease is frowned upon other than the lending criteria mentioned above?

stjohnsmythe

googler wrote: »

OK, someone said that some lenders won't lend on less than an 80-year lease, and the OP here has a 77 year lease - would someone explain why this 3 years is so important, when NOBODY who buys the flat now will be there when the lease expires....?

Is there any other reason a 77 year lease is frowned upon other than the lending criteria mentioned above?

I'm new on here but first post so here it goes. Leases are pretty complicated.

Once a lease drops below 80 years there is something called marriage value that is taken into account. This is a % of the increase of the value of flat after the lease extension which is payable to the freeholder. Above 80 years you don't need to pay this. The shorter the lease gets, the more marriage value is payable.

You also need to live in or own the property for a minimum of two years until you are entitled to extend the lease. A Freeholder may allow you to do this before the two years but if he doesn't want to then it's tough. The way round this is for the seller to initiate the the lease extension and the buyer pick up the process. Most first time buyers will not want to do this so realistically speaking you will need to extend the lease to a minimum of 90 years to make a leasehold property saleable. A property with a lease of over 90 years will be valued the same as if it were freehold.

Edited to add - the reason a lender won't like a short lease is the likely problem they will have selling it on if they have to repossess. The shorter the lease, the less the property is worth and as the time left on the lease decreases then so will the value of the property.

Tiddlywinks

hoggums wrote: »

It you can cover the mortgage renting it out then do so and rent somewhere larger yourself if you need the space - then save money like mad so you can buy the lease and sell the property.

This would be my suggestion as well - you could move slightly further out and get something larger for the same rent as you could get from tenants. Just a few stops out on South West Trains will get you some really nice areas in Surrey / Hants. Think of this as an opportunity to "try before you buy" in other areas.