Fancy property at 50% off?
Brett Alegre-WoodChairman, YPC Group
Hey guys,
That's right... Most of the property we have sold over the past 2 years is actually 40-60% off peak 2007 values.
In fact I was so impressed with the properties and discounts (even off current values) that we have sold over the past two years that I have changed our cash flows to reflect 3 separate prices (well 2 prices and 1 value.) You'll see the changes reflected from all new property that we're selling.
1. Developers List Price or Peak 2007 Comparable Price.
The first is the developers list price or Peak 2007 price. This is the price that the developer was selling in 2007 or the price of a comparable property in 2007.
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2. Current Market Valuation
The second is the current market valuation of the property in today's market. This is normally around 20-30% below the 2007 figure for new build because despite prices 'statistically' crawling upwards over the past two years the property we've been selling has bumped along the bottom and not really increased (I'll explain the importance of this later.)
3. The Price you are paying or Net Price/Contract Price.
The third price is what you're actually paying for the property or the Net Price. This is the amount you've negotiated for you. This is normally something between 10% for London and up to 25% elsewhere. This will also be the price that your mortgage is based on and normally the contract price as well.
All three prices are essential and we'll give you two percentages; one which shows you the drop from Peak 2007 to the current market valuation and a second one which is the total drop as a percentage from Peak 2007 to the Net Price you are paying.
The final percentage is the amount from current market value to net price as a percentage.
Why I don't think prices ever rose!
The truth is that I don't think prices will really drop because I don't believe they ever did rise and if you consider for a moment that the prices you are paying for property now are the same that you were paying 2 years ago when buying from YPC then they actually never rose from their initial drop. So the rest of the market is perfectly likely to 'statistically' drop back down to the prices that you've already been buying at from YPC for the past two years. When you read our cash flows you will see exactly what we mean. This negates most of the double dip, house price drops chatter that the media is punting at us right now.
I think we all got a little stupid believing house prices really went up at all, the sales volumes were so low that the indexes have been wrong for some time and this is exactly why my team have been arguing with developers, valuers, and just about everyone around valuations.
The truth is, and you'll see it on our new cash flows, new build property has dropped 30-40% from Peak 2007 prices and that means that anything you are buying from us still has a buffer of around 15-20% in it before you need to consider and negative equity or falling prices.
London is different :)
Now all of the above applies to property outside of London as London property has already started to kick and I don't see any reason why this trend won't continue, prices are low and we are negotiating hard to get the very best deals.
Those still standing get the best pickings...
We are one of the few property companies left operating and doing large volumes each month, this gives us tremendous buying power and tremendous negotiation power, every week I meet a new Chairman, Managing Director or Sales Director who want to work with YPC.
So if you fancy some of this 50% off property give the team a call on 0207 812 1255 or directly on their mobiles and we'll explain the intricacies and opportunities that are present in the market right now.
Live with passion,
Brett Alegre-Wood
PS. This actually applies in a lesser degree to our Aussie readers where we have been sourcing similar discounts from developers who are overstretched and underfunded so call the team on 1300 533 713.
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