Subscribe Feed (RSS)Allsops offers a plethora of cheap property but nothing over £750K
October 15th, 2008 by Karelia | Filed under London House Prices.Musings of a London Property Finder
The Allsops auction catalogue is out and there are plenty of goodies at every budget except £750K and over. In fact there are is only 1 vacant freehold house priced at over half a million: an ex-HMO, apparently with consent to be used as a family house, though placed as it is, on busy Gunter Grove, it is unlikely to appeal to most families. A conversion to flats seems likely.
There are also 2 investment houses. Barclay Road Fulham is ideally situated close to the Fulham Broadway tube. It is a freehold house divided into a basement flat with vacant upper parts, the basement flat currently housing a regulated tenant. This could work out to be a canny buy depending on the temperament of the regulated tenant. With a guide price between £575K to £625K it is little more than the price of a 2 bedroom flat but with work, a wonderful 3 or 4 bedroom maisonette could be created.
If you are reading this as a potential home-buyer, we cannot stress the need to check out the regulated tenant as if they don€™t want to go, you can€™t get rid of them and you can€™t put up the rent until the next rent review. The rent has to be agreed by a rent officer who doesn€™t really take into account €˜market rents€™ i.e. supply and demand, so a monthly regulated rent is usually approximately what an Assured Shorthold Tenant would pay per week. The buyer will also become the landlord and will be responsible for the upkeep of the whole property including the regulated flat. Property subject to regulated tenancies are investments because the value is diminished while there is a tenant in situ but if the tenant dies, becomes ill or the landlord manages to pay off the tenant, then clearly the property will jump in value, although anyone living with the tenant up to 2 years prior to the death of the Tenant, may be able to take over the Regulated Tenancy. For a young family however, a regulated Tenant can prove to be an asset if there is a harmonious relationship between the two. The young family can sometimes gain a surrogate grand-parent; the regulated tenant gains youthful companionship.
But I digress.
The second large house for sale at the Allsops auction, 99 Babbington Road, Streatham, has a guide price of £650K+ and is divided into 9 studio flats, 6 of which are occupied. A budget of several hundred thousand pounds would be required to turn this into a modern family house, but with a yield of 8.4% based on the guide, this is probably an investor€™s buy. A final sale price of £600,000 is probably a bit closer to the mark.
So why the lack of higher priced property this time? Presumably the people who own property worth £750K and above would rather avoid opening their homes to the masses as is necessary at auction and have the funds to stay put and wait for a better time to sell. They may have sufficient equity to do any remedial work required or even take advantage of the high numbers of builder/developers who are taking on refurbishment work for the first time in years. This is a good sign for the mid-market. Look around and there is little property on the market. Admittedly, little of the stock on the market is selling, but low stock fuels demand and the fact that we are just not seeing floods of high price property at auction in London, particularly given the plethora of properties in the capital which are worth over three quarters of a million, bodes well for the property market overall.
We€™ll discuss first time buyer and low priced buy-to-lets tomorrow. The next Allsops residential property auction will be held on Thursday 30th October at The Great Cumberland Hotel and Monday 3rd November at The Cafe Royal. This London property Finder will be looking for best price opportunities.
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