Musings of a London Buyers Agent

After  a year or so of mortgages being pulled from the market, the Nationwide has brought back the 125% mortgage for buyers who are trapped by negative equity.  This group of buyers would be unable to move without the new mortgage but it strikes us that this is the least likely group of home buyers who should be entitled to such significant borrowings.  After all, they hardly have a good track record if they are already in negative equity.

However lately we’ve been thinking that the real losers are canny cautious buyers who settle for properties in need of a little work or repossessions or distressed sales, available at a bargain price.   We have represented both first-time-buyers and new investment buyers who haven ‘t got much of a deposit but who would really have benefitted from the 125% mortgage and would also be relatively low-risk buyers. 

The Clients I am thinking of have bought good value property at excellent prices and in some cases below the true market value and need additional funds for renovations, or a lease extension, both of which would add immediate value and saleability. 

However following the boom years, most mortgage companies nolonger have any appetite for this type of lending.  Clearly, some people borrowed more than they could ever repay.  Also agents and mortgage brokers flipped property and finance deals, so that in reality the owners put down very little or no cash other than a brokers fee.  In cases where the valuations were too high, the mortgagors were left high and dry when the housing market crashed. 

The thing is, why on earth does it make sense to lend 125% with a track record of getting into negative equity?  There is no way a commercial lender would do this.  Although not a Conservative by nature, my parents words of wisdom are ringing in my ears - is it time to return to a tory spending regime?  If this new scheme from Nationwide is anything to go by - I rather think so.

PS If you need a Buyers Agent who will give you an honest valuation and justify it and tell you if the market is overheated (as it is now in many parts of London), you know our number!

Technorati Tags: 125% mortgage, Buyers agents, First time buyers, homebuyers, housing market crash, London Buyer's Agent, overheated market

Tags: 125% mortgage, Buyers agents, First time buyers, homebuyers, housing market crash, London Buyer's Agent, overheated market

A Property Finders auction property picks

With the buying season in full swing, we are getting several calls a day from first-time-buyers looking to engage us as Property Finders to help them make their first purchase.  With their deposits in hand, auctions are a good way for organised first time buyers to find their first property, as long as they know what they are doing are well advised and extremely well-organised.  Here is our pick of the property at Allsops sale in two weeks time. 

For first-time buyers hankering after a zone 1 pad or city workers who want a bolthole close to the office, 43 Roupell Street might be the answer.  Roupell Street is a quaint street of period cottages originally built for railway workers.  The houses are essentially 2 up 2 downs, tucked behind Waterloo East railway station and generally sell for in excess of £650,000.  Number 43 has a guide of £400 - £450,000 and presumably needs complete refurbishment.  A purchaser with change from £550,000 would have bought a bargain in our mind, although the refurbishment costs could be high - we’ve not been inside.

22 Longmoore Street in Pimlico may be a good option for those seeking an SW1 address.  This four floor 3 bedroom period home is on a quiet residential street, but this house is blighted by it’s proximity to the Prince of Wales pub, which will mean noise outside your bedroom window as smokers enjoy their pint outside.  For those who can put up with the disturbance, the guide is £700-£750,000 although we would estimate it will reach £800,000 maybe more.

Parents of first year Cambridge undergraduates may be interested in 86 Gwydir Street, another Victorian 2 up 2 down workers cottage in the centre of Cambridge.  The guide is £165+ although property here has been achieving £280,000+ for the last two years.  This house needs total refurbishment, including new windows and a new front door.  This should go for over £200,000 but anything under £250,000 wouldn’t be too bad a buy, and by the time you complete in early July - the offspring will have finished their exams and can get started honing their DIY skills ready for a paying house mate or two in late September.

For new parents keen to escape the rat race and buy more space for their buck, there is a large 4 bedroom detached 50s house on the outskirts of Pembury, between Sevenoaks and Tunbridge Wells.  It’s not very pretty and needs a complete facelift, but it sits on a large plot and increasingly the planners are allowing front and rear extensions which will make the house easier on the eye.    In our view a new set of Barratt style windows, a coat of coloured render and rebuilding the hideous porch would make a big difference.  The guide for this house is £225,000 - £250,000 which is about right in our view.

An alternative is Little Greystones, a new development of 5 3 bedroom town houses on the outskirts of Crowborough in deepest darkest Sussex.  The town is well known for fantastic schools in both the state and private sectors and each house is for sale with a guide of £140,000 to £150,000 although there is only one house vacant and the auctioneer will try to sell all five as one lot to an investor, before selling individually.

The next Allsops auction will be held on 2nd and 3rd of June at the Great Cumberland Hotel in Great Cumberland Place London starting at 10.30am.  If you need advice from someone who knows how to buy at auction then we are one of the few Property Finders who will be able to help you.

Technorati Tags: allsops, buying at auctions, Cambridge Property Finders, Crowborough Property Finders, First time buyers, Kent Property Finders, London Property Auctions, London property finders, property auctions, Sussex Property Finders, UK Property Finders

Tags: allsops, buying at auctions, Cambridge Property Finders, Crowborough Property Finders, First time buyers, Kent Property Finders, London Property Auctions, London property finders, property auctions, Sussex Property Finders, UK Property Finders

Rantings of a disgruntled London Property Finder

Today we spent the day out of the office at the IOD annual convention, in the Royal Albert hall.  Politicians never confirm until late in the day so Alistair Darling late entry as the first speaker was an interesting start to the day.

Given the audience, the Chancellor’s principle objectives were to defend the need for additional taxation particularly the new 50% tax  and also shouting about all the concessions and help the government is giving to smes.

Justifying the need for additional taxation, our hearts bled to hear Alistair Darling bemoaning the enormous hole in govenment revenue since the beginning of the recession due to amongst other things, the fall in stamp duties collected.Rather an interesting point to make to a hall full of business people, given that during these difficult times we need to make pragmatic decisions every day. For example, whether it is better to have a proportion of a little or all of nothing.

The Chancellor has missed a trick with stamp duty. Reducing the rate of stamp duty payable on properties below 500K would have helped boost transaction numbers which could in turn have boosted the revenues the government gains from property and boosted confidence in the property sector and the economy as a whole.  First-time buyers who we work with, tend to buy properties worth £400,000 and above.  Assuming they don’t spend over half a million, that means stumping up 3% stamp duty or using one of the avoidance schemes.  For the many who don’t have helpful accountants or London Property Finders like me, that means finding an additional £13,500 for a flat purchased for £450,000 - the price of a good 2 bed flat in a great area in London.  Typically we will charge just short of £7,000 for finding the fabulous flat - but then we would have introduced the buyer to property they would never have found on their own and negotiated a great deal which won’t fall through.  What does the Chancellor do?

Temporarily cutting stamp duty by half for property below £500K would make a real impact on the London property market and the Chancellor would gain a little of alot rather than a great deal of very little!This London Property Finder thinks it would have been a welcome if pragmatic course of action

Technorati Tags: First time buyers, London Property Finder, London property market, london property market news, Stamp Duty

Tags: First time buyers, London Property Finder, London property market, london property market news, Stamp Duty