Buyers are seeking out dilapidated properties in London, according to award winning buying agency, Black Brick. The new trend comes as buyers look to find the best possible deal on their London home, enabling them to achieve better value for money and improved potential to achieve long term capital growth.
The buying agency has reported that wealthy individuals are currently reluctant to pay £4,000 – 5,000 per sq. ft. on a new luxurious property in prime central London and are instead purchasing distressed apartments and houses which can be renovated, minimising risk and increasing their value.
Camilla Dell, Managing Partner at Black Brickcommented: “We are seeing an increase in properties coming onto the market which are being sold because a family member has passed away or that have been in a family for 20-30 years and handed down to the next generation. Although it is a buyers’ market at present, these properties have still gone up in value considerably since they were purchased many years ago and therefore sellers are willing to take a deal or reduced rate on their home.
“Many of these properties are distressed or in need of renovation, presenting an ideal opportunity for buyers to make money. We recently sourced a property in Marylebone for a client which was for sale at £1,200 per sq. ft., the buyer needed to spend £300 per sq. ft. renovating it, however, when it is complete it will be worth upwards of £1,800 per sq. ft., making it a great deal.”
Camilla added: “There are some excellent deals to be had at the moment, particularly from vendors who are highly motivated to sell. That’s why as buying agents, we always find out who the seller is, and what their reason for selling is. This enables us to negotiate far better discounts for our clients. We are also seeing some great discounts being applied to new build properties which are due to complete in the next 2 or 3 months and the seller is wishing to flip it before completion. Some are even willing to take a significant loss in order to not complete on the property and face having to pay stamp duty.
“We are advising buyers that if the right deal can be sourced, now is a great time to be buying, but realistically given the costs of acquisition,investors need to be looking at holding onto to the property for a minimum of 5 – 10 years before they see significant growth in its capital value.”