You may think that buyers in this market are few and far between, but they are still out there – and are motivated and serious.
The doom and gloom of recent media reports might lead you to believe that the credit crunch has made buyers all but disappear, but as Richard Palfreeman of Northfields Estates, West London, points out ‘The number of buyers have certainly reduced since the credit crunch, however, the buyers that we are registering now are very serious and highly motivated to move.’
Even in this weak market there are opportunities for buyers. So what are they?
1. First Time Buyers
First time buyers may seem as elusive as the Loch Ness Monster however, they are out there. Previous to the credit crunch many first time buyers were unable to afford higher property prices, but now property prices that were previously out of reach are within grasp. While first time buyers, for the most part, now need a substantial deposit to secure a mortgage they may be able to save the extra cash in other areas such as stamp duty. Many first time buyer properties have been reduced to amounts taking them under the £250,000 stamp duty threshold, particularly in London, thereby cutting the amount of money first time buyers need to save for stamp duty from 3% to 1%. The savings can therefore form part of the much needed deposit. For example, Northfields recently sold a two bed flat in Northfield Avenue that previous to the credit crunch would have been priced at around £260,000, but was purchased by a savvy first time buyer for £245,000. Therefore, the stamp duty on the pre-credit crunch price at 3% would have been £7,800, but with the current property price reductions the stamp duty at 1% is only £2,450. The savings on this property sale in Ealing amounted to £5,350 for the purchaser.
2. Investors
News commentators have been predicting that many property investors will attempt to sell off their properties or at the very least not buy more. However, due to the very strong rentals market (certainly Northfields Estates has experienced record lettings months recently) some investors are not just hanging onto their property portfolio, but increasing it. According to the Association of Residential Letting Agents, 4 out of 10 landlords plan to increase their portfolios in the next 12 months. This is providing that finance is available. While some investors are finding tightened lending criteria prohibitive, others are taking advantage of the boom in the lettings market and are seeking to take advanatge of affordable property in the sales market to increase their portfolios. The key for potential investment buyers is to search out areas that are getting regeneration cash, new transport links and new jobs, like Brentford.
A canny investor in Ealing recently purchased just such a property through Northfeilds Estates - a two bedroom flat in the Haymills Estate, east of Hanger Lane in Acton, nestled between North Ealing and West Acton tube stations. The property in West Acton, W3 previous to the property downturn, would have fetched around £330,000, but was snapped up recently for £225,000 thus, giving greater room for a capital gain in the near future.
3. The Family Looking to Move Up the Property Ladder
If you need more space or a better location now is the time to make a move. It may seem like a terrible time to sell your property, but if you are trading up to a more expensive property this market is ideal. Granted, you may have to reduce the price of your property by say, 10% to be competitive in the market. However, the property you’re buying will also be reduced by 10%, if not more, particularly if you plan to move out of London where property prices have experienced even more reductions than London. For example, a seller in Chandos Avenue, Ealing may have been able to command a £310,000 sale price on their property in a stronger market. However, in the present market the sellers took a reduced offer of £295,00. The good news is that the same seller was looking to move to the North of England and were able to negotiate over £20,000 off their onward purchase, gaining a profit of £5,000.
While many nervous buyers are content to sit on the sidelines and wait out the market, those buyers that brave the market may very well profit by it.
Interested in profiting from this market? Register your details now.
