The overview of budget real estate against the background of luxury housing in London

london-housingWhile in London a deficit of real estate of around 30% is observed, which is not able to cover the demand, but the real estate market in the capital is ready to offer a wide price range of residential properties, busting the myth of the inaccessibility of the apartments in the UK. The price is affected by a number of factors, first and foremost – the district, the area, number of floors, parking, transportation, proximity to cultural, entertainment and public facilities.

Budget properties in London is not a myth, such an option can be purchased by selecting residential buildings in east London. It is a kind of industrial area with mostly English-speaking population neighbourhoods. In East London the entire neighborhoods with typical bedroom apartments were built, which have a greater similarity with the French suburb housing. The city center is in 1 hour drive approximately, and that’s one of the main factors affecting the overall cost of the apartment. To date, one-bedroom apartments in the area can be bought for £180,000, while the two bedroom options start from £220,000. However, this is not the final price – more less significant expenses may be associated with property condition evaluation, legal services (all the deals are made through conveyance solicitors) and other aspects should be taken into account.

Many investors purchase the entire buildings with small-sized rooms in the suburban parts of London for recoupment through the rent, allowing to gather around 3 – 5% (at the time of 2014). Another category of buyers – the parents of students and students of London universities in need of proper housing. About 60% of transactions in the budget flats was recorded to parents or close relatives. Moreover, even in spite of the relatively low cost of such apartments they are constantly increasing in their cost. The owners of such apartments are able to bring up to 7% of annual income when making a transaction on resale.

However, both, who invest their own money in real estate capital of the UK, make up a large percentage of buyers of luxury real estate in London. According to Knight Frank statistics, the property objects priced at £1.5 – 2ml are primarily acquired by CIS residents.

The price for luxury apartments and townhouses located in the fashionable districts of the capital, which are close to the center, the so-called, Prime Central London, start from £5ml. Thus, for example, a 3 bedroom apartment with balcony and parking lot costs at least £7 million in Belgravia – the most expensive district in London, which has managed to sell more than 26.61% of transactions above £10 million.

The average price of London real estate in the fashionable areas varies widely. The peak performance falls to Mayfair and Belgravia, as well as Chelsea and Knightsbridge. Approximately 30% more affordable residential apartments are located in the elite areas of Regent Park and Hampstead – the top 10 regions that sold 8.15% and 3.4% of elite property objects the price of which has gone beyond £10 million.

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Banking property acquisition: the underwater rocks to be aware of

banking-propertyForeign investors, experienced in the acquisition of banking real estate in London, are aware of the fact that the bank initially exposes an object on a strictly fixed price, and it is usually overpriced. However, the practice shows that investors can bargain on the final amount, since banking institutions are primarily interested in profitable sales of the objects on balance, given the fact of a lending opportunity at the same time; therefore, are willing to significantly reduce the value of the property. When buying real estate from a bank it is recommended to announce your own proposal.

In London, if you purchase new or resale housing is accompanied by the essential independently assessed examination, which establishes the technical compliance of housing and its operational capabilities. Usually, this procedure is extended for a period of 3 months. Banking services are interested to avoid such delays, so often stop at the ‘average’ price between the investor’s proposal and price of proposal for the client. Especially recommended to appoint its own proposal to investors who seek to invest in the banking elite housing located in central London.

However, the purchase of real estate bank is also accompanied with certain of disadvantages. Those investors planning to acquire confiscated or seized property must be informed that a reduced cost of such facilities is largely defined by technical condition of housing and commercial office spaces. About 70% of the bank property in London requires cosmetic or major repairs, and the scope of which defines the discount amount.

That is why in some cases, banking real estate can be purchased at a price of 80% below the average and around 40% lower than its nominal value. So, before you complete a purchase, you should better evaluate the potential expenses associated with repairs – cooperating with the 3rd party organisation, not interested in the deal, could be a reasonable approach and this investment may pay off. However, this service, just like all the legal expenses associated with conveyance solicitors services are implied to be covered by the buyer. If the property is sold at a discount of 30%, then perhaps a better option would be the purchase of resale property at a higher price, but without the need to invest in repair, especially taking into account the tough technical and engineering requirements for the buildings in the country. The average price of typical houses in London in 2014 equaled to £600,000. However, even taking into account the need to invest additional capital for the repair, the size of the discount may covers it, providing an investor with a pure income. When buying real estate bank should also consider the need to sign new contracts with public utilities companies. It will be included in the estimate of additional costs, however, it is highly likely to be a burden because of the contract renewal time frames.

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