Price of nearly new appartments (Chester)

lynzpower

well, what has the other one sold for as second hand.

you should therefore be able to see how much the value has dropped?

adr0ck

this graph explains a lot

http://bp1.blogger.com/_3iqp6erxj3s/RxM0VENwVTI/AAAAAAAAAMM/VsAMCzFgtqI/s1600-h/Housing+Mix+for+GB.jpg

SquatNow

The OP has accepted that a new-bild flat will loose money... so why is he even considering it? There are plenty to rent as most new-build "executive flats" get bought off-plan by BTL muppets, and they'll probably be open to negotiation on rent since there are so many empty ones.

Or he could just find an empty one he likes and move in.

eaustin

Is there someone who knows the property market in Chester who could send me a PM to discuss my situation in a little more detail. I would be much obliged.

EdInvestor

eaustin wrote: »

The thing is we like the flat, the area, it's much bigger that a 'standard' flat and we're considering it as home, not an investment. But being a 'conservative' type of person I don't want to end up with a whire elephant, hence my concern about the (over) valuation of city centre appartments.

Perhaps you should consider holding on to your existing home and renting it out temporarily?

You could then use the money to move on a rental basis to the city centre apartment to try out the lifestyle, with no transaction costs or worry about property market losses.

The tax arrangments where you rent out your main residence are very attractive, it would be hard to make a loss.

Pez2

eaustin wrote: »

Yes, I know what they're asking and I've also looked at what the other appartments on the same level have sold for. Unfortunately, only one has has been sold 'second-hand' which was why I was originally trying to assess what the premium for new flats might be. I have looked at other city centre developments and it's difficul to establish a consistent trend.

I suspect that you'll fnd it difficult to establish a consitent relationship between a flat's value as a new build and it's 'second hand' value simply because it has become fairly standard for builders to offer varous incentives such as deposit paid, a proporion of the mortgage paid for x years, etc. Because of this the list price doesn't necessarily reflect what was actually paid for the flat, and without knowing what offers were included with the original purchase, it's difficult to establish what the market value was when the flat was sold as new, let alone try and figure out what it's re-sale value is.

guppy

Don't know exactly where you live, but every town and city seems to have a similar glut of these, including yours, as you've said.

Don't forget the drop in price you see between the original purchase price probably reflects a stack of incentives the developer offered to the original purchaser, e.g. stamp duty paid, legal fees, cashback, plasma telly etc. etc.

The orginal price might also have been agreed some time before completion if the property was "bought" off plan. A big chunk of it will have been the developer's profit, his costs in subsidising the inevitable "affordable housing" on site, and all the marketing costs/brochures etc.

Anyway, in my opinion, you won't find anyone willing to sell one of these things for its true worth. For the moment at least, there is always likely to be someone less cautious than yourself in the market.

I agree with the poster that said these have got a long way to go yet...regardless of what the rest of the housing market does.

Even if you were to get one at a price you consider fair, that could well be the least of your worries. These places are likely to become increasingly less desirable places to live as rents fall (and most are rented), the BTL owners will get increasingly less fussy about tenants, and may not be willing or able to pay the service charges to maintain the environment or the blocks.

Where I live, new blocks keep getting built, driving down prices of the other blocks, which start looking tired even before all the original flats are sold. Presumably the quality tenants move to the newest blocks too.

Another concern is how durable are these things going to be in the medium term? A lot use new construction methods and external finishes, are they going to suffer unforeseen defects that result in massive service charges in 10 years time?

Personally, I'm in the avoid like the plague camp. Get a nice terrace house instead, far less hidden surprises, and only two neighbours, plus no service charges or management hassles