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Less Than 3,000 London Homes Sell In A Month
May 15, 2009Article by Ray Withers
London property prices dropped by 15.4% in the year ending March 31, 2009, according to the latest statistics issued by the Land Registry. The average house price value in the capital is now £299,613 due to a slight 0.6% rise – the first in a year. The rate house prices are dropping in London is slightly slower than the rest of the UK – that may be the start of a revival as UK property prices often change as a result of the ripple effect spreading out from the capital.
Searching out below-market-value London property is a huge task – despite the recession plenty of buyers have cash to burn, especially those from the Euro zone countries, where the exchange rate has slipped to their favour. According to the Land Registry, no property has sold in London for less than £50,000 for at least a year. Only 72 have sold for between £50,000 and £100,000 since January 2008. The stats only move into triple figures at £100,000 – £150,000, that includes most of the properties qualifying for the up to £175,000 purchase price Stamp Duty exemption until December 31. In January 2009, just 276 homes slotted in to this category.
That means as an investor looking for discounted London property with the Stamp Duty exemption, only about 350 deals actually complete a month in London – forget what the banks, building societies, estate agents and other interested parties say, these figures are from completion documents filed by solicitors at the Land registry.
In total, only 2,876 homes were sold in London in January 2009.Even in the £300,000 – £400,000 price banding, only 384 sales completed in January 2009.The type of below market value property in this banding is mouth-watering for an investor – take The Shrubberies Mews Townhouses, Southwark, London – this is another exclusive development of a small, gated community of just eight townhouses from Oxford-based specialist investment consultants Property Frontiers. The developer is offering a massive £75,000 on the certified valuation – bringing the asking price down to just £300,000.
- The houses are open plan on the ground floor and have two double bedrooms and a family bathroom upstairs.
- Again, they are a short walk from local shops and stations. The City and West End is within easy reach by train.
- Gross yields of 6% at £18,000 per year are expected from the development.
This developer is selling at more or less the price of the land plus building costs to clear the properties from their books. Independent valuers have certified the property prices.