Landlords failing to call bottom of the London market
London’s landlords are failing to call the bottom of the market, unaware that discounts of 20% are already being achieved, property experts James Pendleton reveal today.
The price behaviour that landlords are seeing on the property portals doesn’t tell the full story.
In fact, incredible discounts are already being netted by proactive landlords seeking out developers who are urgently trying to sell new build stock to free up cash.
The deals are coming even more easily if developers are approaching their financial year, he says. Good discounts are also being achieved on properties that are being marketed above the £600,000 Help to Buy threshold and consequently not receiving as much interest.
The average discount achieved by landlords buying new builds through James Pendleton was 14.1% in the past three months — falling £141 per sqft on average to £864 per sqft. This compares with an average discount of just 2.6% for re-sold property.
In one unusual example of this happening, a flat in a prime development of luxury apartments in Putney netted the largest discount of the past three months at 20.2% but the same scheme has also produced healthy buy to let discounts of 12.9%, 12.1%, 12.1% and 10% for other buyers.
Lee James Pendleton, founder director of James Pendleton, said:
“Those landlords waiting for a large price correction in London may be waiting for some time.
“There is a fringe market in play right now that means private developers keen to unlock investable cash are trying to identify landlords who can transact quickly. Once they find the right buyer, they are very prepared to reduce the price beyond anything you would think possible.
“The reason is that there has been a gradual build up of new build stock in many areas that hasn’t shifted as quickly as developers would like. Brexit and a political impasse in Westminster for much of last year are largely to blame.
“The result is that discounts of more than 10% and as high as 20% are being achieved, which puts these reductions well into financial crisis territory.
“The bottom line for these vendors is that they are businesses, they need cash flow and they are willing to reward the most proactive buy to let purchasers if they can help them exit and move onto the next project.
“We’ve spoken to many landlords who we were surprised to hear were waiting for the market to move lower. They are in danger of missing the boat. The kind of discounts they are looking for are on the table right now if you know where to look and how to shop.”