I’m trying to sell my two-bedroom apartment in London and it’s becoming a bit of a nightmare as the capital’s property market continues to see demand decline.
U.K. property portal Rightmove said last week that average asking prices in London, across all property types, are down 1.7 percent (or £11,040, around $14,500) in July, compared to a year ago — the largest year-on-year fall since a 3.5 percent decline seen in January.
Good news for first-time buyers looking at properties with two bedrooms or fewer though, the “lower market sector” saw the largest percentage drop in the last 12 months, with prices falling by 3.5 percent, or nearly £18,000, from an average £504,131 to £486,371.
Encouraged by friends’ tales of quick sales and easy purchases, I thought my selling experience would be the same. But my zone two apartment has been on the market for over two months and has had only two viewings.
On reflection, it looks like I bought my apartment at the worst possible time, a month before the Brexit vote in June 2016, and am now trying to sell at the worst possible moment.
My husband and I were first-time buyers and had been living on a canal boat for years. But lacking a large deposit — still the biggest obstacle preventing people from being able to afford their first home — we turned to the U.K. government’s “shared ownership” scheme.
It was a relatively easy process to buy a 45 percent share of a flat in the borough of Tower Hamlets in East London with a mortgage, paying rent to a housing association on the remaining 55 percent. But being part-owners has thrown up an extra layer of complexity for its sale.
The rules state that the housing association has first call on trying to find a shared ownership buyer to, justifiably, maintain London’s affordable housing stock. The association failed to find anyone, however, meaning the flat could be marketed on the open market, to anyone, at full-market value.
Now with only two viewings in two months, my estate agent says the price of the property is too high and is deterring value-conscious and cautious buyers.
Lower the price, you cry — but it’s not so simple with shared ownership. The housing association says that if we accept an offer lower than the official valuation (made by an independent surveyor it approved), the shortfall is taken from the value of my share, not theirs, meaning I have had to appeal the valuation just to lower the price.
Price is only one part of a wider picture of stalling property sales in the city. Economic uncertainty and lackluster demand, which is even weaker in summer, are making people stay put. A forthcoming interest rate rise from the Bank of England could depress demand and mortgage approvals further.
The woes for London’s property market is a first world problem, and, arguably, I don’t have to move urgently — there is some Dickensian charm to my three young children sharing a bedroom, for now.
As it stands, my flat has been on sale for 63 days and Rightmove says it’s currently taking, on average, 67 days to sell a property in London. Perhaps this could be my week.