60% price increase within the same development?!

AdrianC

martinkatu5b wrote: »

Crazy thing - the rents have stayed the same.

Which puts the lie to the usual claim that it's BtL buyers fuelling the prices.

Unless, of course, these BtL buyers are utter idiots who can't do basic sums.

davidmcn

AdrianC wrote: »

Which puts the lie to the usual claim that it's BtL buyers fuelling the prices.

Unless, of course, these BtL buyers are utter idiots who can't do basic sums.

Maybe their sums are including the capital gains?

AdrianC

Bit late for that, if they're buying AFTER a very steep short term increase.
Horse. Stable. Lock. Bolted.

martinkatu5b

Its a combination of factors:
- increase in desirability of the area - in my view the main reason why these flats saw a 40% increase. Area is undervalued compared with surrounding towns. People coming in paying over the odds for premium properties.
- easy to obtain mortgage finance - prompting first time buyers
- low interest rates - making flats more affordable and pushing capital values up
- Buy to let speculation. Lots of fools with large chequebooks hovering around.

I am going to buy in to it myself, necessity not choice. Reached my mid thirties, need to buy, can wait out fluctuations in the market. Buying is cheaper than renting. Renting you are on 1 months notice and rely on your landlord to fix anything.

I would not buy in London, because there is too much risk capital values will fall. A 10% fall in value on a 170,000 flat is a big problem. On a 450,000 flat, I would be wiped out. 10% fall is quite realistic.

lilaczoey

Some more relevant data points:

-- A newly completed 2-bed flat in the same development has been on the market for 400k for a month (and it hasn't been sold yet), whereas the developer is asking 500k for the same flat in the current phase (still off-plan; same floor, same layout and everything, except that it's on the edge of the development so it doesn't face another building).

-- Some smaller/older 2-bed flats are selling for 300-350k.

-- Terraced houses nearby are selling for up to 600k.

Shouldn't there be a discount for buying off-plan? Where would you draw the line?

Given these data points, the flat that we like (almost 500k!) seems so overpriced that we don't even know where to begin when it comes to negotiating with the developer!

vw100

No harm in trying to speak to the developer to get the price down, all they can say is no, or they may come down a little. But don't expect massive reductions. London is the sort of place where a lot of people have a lot of money and someone will come along and pay the asking if not more to secure a property they want to live in or as a investment.
Had you brought a few years ago you would have been happy with the price increase. Can't have it all, all the time.

Fiveboy

Shouldn't there be a discount for buying off-plan?

Our new build was brought off plan at the end of the development for 255k the same new build house sold in 2013 for 250k. We got 5k off asking and 2k for extras and a custom change to the kitchen.

Also to mention the same house (pre-owned now) 3 doors down from ours was on the market for 280k and sold for 275k

So it looks like we did alright in new build terms.

Running_Horse

Many years ago we saw a development advertised at a particular price, went to have a look, and were told those houses had all been sold and the new price was higher. They did however have some "affordable" shared ownership houses. We walked away and bought a normal house in the normal way. But somebody was happy to pay the higher price as the development has long been fully occupied.

[Deleted User]

It doesn't sound all that surprising to me!

Prices in London have gone up by about a third in the last 2 years. Whether you think they'll stay up, climb further, who knows. If you google house price prediction, then click news, you get a variety of different answers. Today, different papers say subdued, bubble, rocket and soar!

https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=house+price+predictions&tbm=nws

Another possible reason for part of the rise is that developers may discount their first release because not so many people want to live in a building site.