The prime south west London market couldn’t look more different than it did a year ago, says buying agent Sara Ransom…
In prime areas such as Battersea, Clapham, Wandsworth and Chiswick, prices aren’t dissimilar, but the terrible shortage is a thing of the past. The market is less volatile, and domestic purchasers dominate; whereas a year ago the market was dictated by investment buyers, with buy-to-live purchasers struggling to make an impact.
Early in 2014, buyers would have to compete with numerous competitive bidders, and properties were achieving up to as much as 15% above asking price. Successful buyers were using cash – those who needed finance weren’t getting a look in.
The return of domestic buyers means that property is taking longer to sell. Surveyors and solicitors are required to undertake more due diligence, so where property was taking 2 or 3 weeks to exchange contracts a year ago, the average is now around 3 to 4 weeks.
We don’t forsee any political scenario that might adversely affect the market
While the market is more grounded, and prices are more stable, there is plenty of momentum, and there’s little sign of anything slowing down for Easter or the election. Our expectation is that it will gear up post-election as we don’t forsee any political scenario that might adversely affect the market.
One of the biggest hurdles for any buyer is now finance. Buyers really need to be on the case well in advance of finding a property as the process is becoming more and more protracted. The difficulty is exacerbated because mortgage companies are reluctant to talk in ‘principle’ any longer. And there are some mortgage companies that are gaining a reputation for approving finance then pulling out further down the line. Another difficulty is that mortgage companies are insisting that borrowers use a solicitor that is on their approved panel, so you will need to check this before appointing a solicitor.
Buyers should also be aware that it’s difficult to get more finance for improvements, so buying a property that needs renovating is tricky unless you have a substantial deposit.
My advice would be to seek out potential for future improvement rather than property that has an urgent need of refurbishment. Remarkably, there are good examples of property that offers this kind of promise. For instance, adding a loft conversion to the pretty cottages on the Shaftesbury Estate in Battersea, resulting in three bedrooms instead of two, can add around £100,000 to the value, while the cost of the work is about £50,000.
Take plenty of time to research and understand the market, and the individual pockets within areas. Prices can vary by as much as 10%-15% street by street. And don’t dismiss areas without doing some pavement explorations – London changes so quickly, and areas that would have been decidedly ‘no-go’ three years ago, are suddenly hugely desirable. Turnham Green is the new Northcote Road, and Ealing and Acton are the new Clapham.
Generally south west London popularity, and prices, are driven by transport. But there are exceptions, such as Battersea, where your best option is, and always has been, a bike. Come the opening of the Northern Line extension in 2020, who knows what will happen to prices and rental yields.
Use more head than heart and don’t be rushed. Take a week to see something several times if you want, and don’t take a view just because you’re desperate. If one property doesn’t work for you, there’ll be another one coming along, and it won’t have increased in price by 5% in the meantime.
Try not to rule things out. Keep an open mind and consider properties that could be adapted to suit your needs.
Don’t be afraid to flaunt your assets. If you’ve got cash, you are a very attractive proposition, so make the most of your strong position and expect a discount on the basis you won’t have to go through the pain of obtaining finance.
Sara Ransom is Managing Director of Stacks London
Image by Duncan Cunningham-Reid (CC-BY-2.0)