DBPR asked property experts Sacha Moussaieff, Giles Cook and Brendan Roberts if buyers are preferring unmodernised or modernised properties at the moment – and why.
Sacha Moussaieff, Milton Stone
For many years, if you had the time and perhaps the talent, buying an unmodernised property almost guaranteed a purchaser that they would immediately own a property worth considerably more than they paid for it. It was an opportunity to ensure you were far from being in negative equity and there were no concerns about inflated SDLT eating in to the profit.
Then we had the boom period of 2003-2007, and again to a lesser extent in 2012-2014 where unmodernised properties cost almost as much as modernised in the prime areas, so there was no incentive to take on the stress and inevitable overspending and delays of building works. The demand was so strong, everything was selling for big prices.
Now that the huge stamp duty costs are impacting the market so heavily, buyers are looking for ways of alleviating the inevitable negative equity by either negotiating very hard on prices, or adding value to what they purchase through doing extensive works. Buying an unmodernised house, even better if it has planning to extend, allows a purchaser to make up for these added costs and attempt to ensure that their home is at least worth what it has cost them.
Giles Cook, Best Gapp
Unmodernised properties have become less attractive to today’s discerning domestic and international buyer profile despite the obvious financial benefits. Obtaining the necessary planning permissions and consents, spiralling costs, unexpected time delays and considerable inconvenience have all contributed to influence the majority to opt for premium ‘Turnkey’ products. High-end developers understand which features and designs appeal to HNW and UHNW individuals, providing myriad state-of-the-art technology, amenities and accommodation to satisfy their demands.
Brendan Roberts, Aylesford International
They prefer modernised. The uncertainty on eventual cost and time both for planning, mobilising contractor, and to manage the whole exercise are the main factors, particularly in a very uncertain world. Some buyers also like something fully modernised as whilst they sometime like to make their own mark they also feel more able to control the costs if the property is already in really excellent order and just some decorative changes and perhaps different window treatments or additional stone and marble in a bathroom will ‘personalise’ the flat or house but all within an easily managed budget.
The very high specifications and finishes commonly found in central London mean that build costs can easily exceed £1000 per sq ft with professional fees and VAT in addition adding another 20+ per cent. Buyers are daunted by this and the ‘management ‘’ time needed.