In recent decades the cost of buying a home has risen faster than wages, leaving many workers priced out of the market in london.
In some parts of the london, low-deposit mortgages are no help, because would-be homeowners cannot afford the monthly repayments on the mortgages they will need, leaving them in the position of needing to save large sums to put down.
High private sector rents make this difficult – and also mean that in some areas 40% of tenants need state help to pay their monthly housing bills. Affordable social housing has become scarcer, leaving many households with no choice but to rent – often paying more than they would for a mortgage
We’ve called Karan to discuss further about the London Real Estate Market.
Karan Abbott is an experienced property developer and a landlord for buy to let properties (long and short term rentals) specialising in central london assets since 2008.
His current views on the London real estate market are below:-
- Prices are down 20% on average due to Covid-19 and Brexit for prime central london properties in Mayfair, Knightsbridge and High Street Kensington.
- Increase in SDLT tax has further dampened the market.
- Yields are close to one percent now on prime central london properties.
- Funding has become an issue for foreign nationals with falling asset prices and low Loan to Value ratios.
- Ownership via offshore companies route has been restricted and implementation of ATED tax and further increases in inheritance taxes has put off foreign investors.
- It is a good time to buy if anyone Is planning on a holiday home or for first time buyers as there are plenty of distressed sellers. In addition SDLT has been relaxed for first time buyers.
- LTV’s for foreign nationals are capped at 50%-55% at best. Many lenders have pulled out of the market due to the crisis and hence few banks are lending.
So this was it for today we hope London Real Estate Market gets back on track soon and people could buy their dream houses affordably.