The Real Deal New York

This seller’s loss says all you need to know about London’s resi market

Things are bad when you've got to take a 22 percent loss to make a sale
January 07, 2018 03:45PM

(Credit front to back: Daniel Chapman/Flickr; Sarah Nichols/Flickr)

A buyer of a two-bedroom condo in London’s One Blackfriars, which is still under construction, sold the incomplete unit for nearly $2.5 million less than its original price — an “unbelievable reduction” that tells the sordid tale of London’s housing market better than any report could.

The broker for the sale says the seller, who bought the unit in 2013, wanted to expedite the sale before the building is finished, which is when stamp duty tax is due, so, Bloomberg reports, the 22 percent loss was a necessary sacrifice.

The seller was right; London’s got a seemingly unending supply of homes under construction without a buyer — the number rose to a record high in Q3 of 2017. Home values simultaneously fell by 0.5 percent last year making it the worst housing market in the UK. The turn in fortunes for the resi market can be attributed to Brexit as always, restrictions on mortgages and worries over interest rates.

But, there is hope for the future it seems, as the unfortunate seller ended up getting two offers for the two-bedroom condo — both of which are higher than the listing price, according to the broker.

[Bloomberg] — Erin Hudson