Can you cash in on a half price home?
House price cuts are something we haven't seen for some time, but they are making a comeback. Around a third of homes on the market at the moment have seen their prices cut - in a bid to shift them in a slow market. The average cut is around £25,000 - with price cuts ranging from around 5% to over 10%. However, some homes have seen even bigger drops. There are properties on the market right now which are being sold for half their original asking price. The question is why?
We examine four homes that have fallen 50% in price, and why the owners have taken this drastic step.
Time on the market
The perfect example of this is a property in an enormously desirable position in Poole in Dorset (pictured) - and even comes with its own boathouse. It was first listed for £5 million back in September 2014. The price dropped by 30% that December, and we have seen the price come down every six months from then - until June last year when it hit £2.5 million.
The issue for this property is the fact that it requires work. At the moment it is laid out in a way that's not going to appeal to everyone: there are enormous rooms with enormous windows overlooking the view, and yet a smaller kitchen and bathroom. There are also rooms seemingly designed for commercial use, which will be a great opportunity for the right person, but a headache for the wrong ones.
This combination of factors means it will appeal to only a specific segment of buyers, and the sellers have been trying to find those buyers for almost three years. In the interim, they have dropped the price to generate interest.
Ready to go
This Winchmore Hill, 4-bedroom detached house, is lovely and is in a fantastic spot for a family home. Naturally, given its location, it's not cheap, but it's now 49.9% cheaper than when it first went on the market. Back in January last year it was priced at £1,995,000. It was quickly cut quite dramatically that February, and has seen subsequent cuts at regular intervals -the last drop was in January this year.
The owners have done what they can to dress the property and left sofas, beds, and a small amount of furniture in each room to indicate how it may be used. However, clearly they have moved on. Moving a family is a complex business, and sometimes owners have no option but to change location before they can complete a sale. Of course, running two properties is expensive, and with each passing month, the reasons to reduce the property price increase.
They will, unfortunately, have to wait and see whether the current price is enough to tempt buyers. There is activity in the local market, and a semi-detached property nearby recently sold for £900,000, so despite the inevitable frustration they face right now, there's hope that the end is in sight.
Ambitious early price
When a house comes to the market at a time of rising prices, it's easy to get carried away with soaring optimism, and put a premium on top. At first glance this seems to be what happened to this maisonette, which went on the market in Southampton September last year for £380,000. If it had sold at this level, it would have impressively out-priced a semi-detached house on the same road by more than £100,000 - which would be quite some achievement.
However, the price change was made very quickly - falling to £190,000 within just over two-months. Since then interest has picked up, and the Zoopla statistics show more interest in the past 30 days. Prices have risen in the area, so it should only be a matter of time before someone decides to take the plunge.
The sheer cost
One property that has fallen more than 50% in price since hitting the market is a real stunner. This incredible, historic, detached house is in immaculate condition, and sits in the centre of London - in Clerkenwell.
The position is somewhat unexpected, nestling beside glass and steel office buildings, which will reduce the number of people who see this as their ideal home. However, for the right millionaire, who wants an easy commute and a property that everyone notices, this is a stunning purchase.
The reason this hasn't sold appears to be a combination of the slightly niche market, and the sheer cost: this property hit the market for £8 million in October 2013. Since then, the price has been dropped several times, but the most dramatic cut was in May this year, when it fell from £6.5 million to £4 million.
It's a casualty of the stagnation of super prime property in central London - which has seen prices drop across the board in recent months. Now, it seems like the seller is keen to price it for a sale and move on.
For house-hunters, this holds some useful clues for their own search for a bargain. There are fantastic deals to be had if you are prepared to take on a property with features that may not appeal to a huge number of people - such as an unusual design or location.
Similarly, if you can cope with taking on a big project, you may well be able to negotiate a sizeable discount - as the market for this kind of property seems particularly slow.
It's also well worth checking how long a property has been for sale for. If it has been hanging around for more than a few months, it opens the door to making an offer - and at least seeing whether they will be prepared to cut the price significantly.
It always pays to ask about the seller's position too. Are they in a rush to move? Do they have kids to get into new schools? If the timing of their move is under pressure this should mean they are open to offers.