Sales of luxury apartments spike while traditional flat-buyers priced out
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Luxury flats outsold affordable apartments by a ratio of 5:2 in 2015 as those already on the property ladder priced first time buyers out of the market
Flats valued at £1 million and over were far more popular with buyers in 2015 than those priced under £400,000.
Jack Malnick of TK International, said: “certainly the past year has seen an increase in the number of buyers above the £1 million mark.”
Malnick explained it was “downsizers [who have] started buying the larger, more expensive flats.”
Once the preserve of modest starter homes, flats have had something of an an image makeover, making them attractive to those already on the property ladder.
A survey of 600 new housing projects by Molior London revealed that 5,300 properties valued between £1,000 and £1,499 per sq ft, comparable to a two-bedroom flat costing up to £1 million, were expected to sell in 2015,
This figure is well over double the amount of properties sold for under £400 per sq ft. Only 2,000 properties equivalent to a £320,000 two-bedroom flat were due to be sold last year.
John Healey, the shadow housing minister told The Guardian: “To afford a £1m apartment, buyers could need an annual income of £200,000 – it’s simply out of sight for most people.”
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As developers cater to the needs of those who already own property, first time buyers struggling to scrape together a deposit for a more humble flat have been left out in the cold.
Trevor Abrahmsohn of Glentree International said: “The reason why there is a higher demand for properties up to a £1million in London is because finding cheaper property in the Capital at say £200,000 -£400,000 is becoming increasingly more difficult.”
Abrahmsohn identified those who are trading up the property ladder as part of this new demographic of flat fans. “With fixed rate, long term mortgages being reasonably easily available, anyone with an existing property in London who is trading up will find the process easier than it would have been in the past.”
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This new tribe of apartment hunters have expensive taste when it comes to new builds.
Nick Collins of Hadleigh Residential said: “People are always willing to pay more for a product that is well done, and there are people who can still afford those prices.”