{"id":3416,"date":"2018-02-02T10:58:31","date_gmt":"2018-02-02T10:58:31","guid":{"rendered":"https:\/\/bb.pixelanddot.dev\/market-update\/february-2018\/"},"modified":"2026-01-21T12:11:24","modified_gmt":"2026-01-21T12:11:24","slug":"february-2018","status":"publish","type":"market-update","link":"https:\/\/www.black-brick.com\/insights\/market-update\/february-2018\/","title":{"rendered":"February 2018"},"content":{"rendered":"

<\/a>Motivation is all – how seller intel can make all the difference<\/p>\n

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Today\u2019s property market may be moving sideways or falling, but it remains a tough one for buyers. With limited supply coming available, and low interest rates meaning vendors often face little financial pressure, buyers can waste time negotiating with uncommitted sellers \u2013 or they can miss opportunities to drive a hard bargain.<\/p>\n

At Black Brick, we have always recognised the importance of understanding a seller\u2019s motivation. It informs our negotiating tactics, and can often make the difference between making an offer-price bid, or pushing hard for a discount.<\/p>\n

We have analysed the transactions we closed over the last 12 months to get a better understanding of who\u2019s selling, why they\u2019re selling, and the magnitude of the price discounts we\u2019ve been able to secure.<\/p>\n

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Black Brick Transactions January 2017- January 2018<\/strong><\/p>\n

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Some findings leap out. Professional sellers, either developers (35%) or landlords divesting rental properties (30%), account for the vast majority of properties acquired for our clients over the last 12 months.<\/p>\n

In terms of the price discounts we have been able to secure for our clients, there is a fairly pronounced difference in the groups: we have negotiated an average 8.9% from the prices asked by developers, compared with 3% from those selling an unwanted investment property.<\/p>\n

\u201cThis difference is explained by the greater pressure developers face to clear stock that isn\u2019t earning an income, and their general nervousness about the state of the market,\u201d says Camilla Dell, Managing Partner at Black Brick. \u201cLandlords, on the other hand, can re-let properties which don\u2019t generate the capital return they seek.\u201d<\/p>\n

Data from Molior, a leading consultant, supports that interpretation. It found rising levels of unsold development properties in London, with 1,500 complete but unsold properties on developers\u2019 books \u2013 up 35% year on year.<\/p>\n

\u201cAs we\u2019ve been advising clients for some time, new-build developments that have been completed, or are about to be completed, can provide some of the best deals at the moment,\u201d adds Dell.<\/p>\n

Meanwhile, sellers looking to relocate \u2013 who represented around a fifth of our transactions \u2013 are often amenable to a low offer, given that they tend to be up against tight deadlines and therefore highly motivated. We have been able to negotiate an average of 5.6% off asking prices from this part of the market.<\/p>\n

The average transaction size across the categories of sellers also tells an interesting story. Camilla Dell comments, \u201cIt is often said that London is the \u201cdivorce capital of the world\u201d. Property is often a significant part of any divorce settlement. The average transaction size of properties acquired where the sellers were getting divorced was a staggering \u00a336.5 million. Often these properties will not be on the open market, but the sellers have a real reason to sell and so good discounts can be achieved on often rare to market trophy assets. This contrasts with an average transaction size of \u00a31.3 million in the unwanted investment category which largely constituted smaller one and two bedroom ex-rental investments\u201d.<\/p>\n

\u201cDiscovering why a vendor is looking to sell is a vital piece of intelligence, and one that we always ensure we find out,\u201d says Dell. \u201cIt\u2019s important to find motivated sellers as opposed to those who might just be taking the temperature of the market, or who are not desperate to sell, but are hoping to be pleasantly surprised by a high offer.\u201d<\/p>\n

\u201cIt\u2019s something that an unrepresented buyer finds very hard to discover,\u201d agrees Caspar Harvard-Walls, Partner at Black Brick. \u201cThey are either often too embarrassed to ask, or the agent simply won\u2019t tell them. We have the contacts and relationships that can help us find out.\u201d<\/p>\n

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<\/a>Signs of stability spread<\/p>\n

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More evidence is emerging of stability returning to parts of London\u2019s prime property market \u2013 even as prices in outer prime areas continue to fall. The data could indicate that there are bargains to be had in these latter areas, if the traditional pattern of price movements rippling out from central London repeats itself.<\/p>\n

\u201cThere are signs that values may be bottoming out, following three years of price falls\u201d in London\u2019s central prime markets, according to the latest report<\/a> from estate agency Savills. In the last quarter of 2017, prices in central and north west London fell by just 0.9%, while prices in prime south west London fell by 1.6%.<\/p>\n

That picture is reflected in analysis firm LSL Acadata<\/a>. It reports that sales jumped 20% year on year in the third quarter of 2017 in London\u2019s three most expensive boroughs, namely the City of Westminster, Camden,\u00a0and Kensington and Chelsea.<\/p>\n

\u201cThe prime central London housing market appears to be ahead of the curve in adjusting to current market conditions,\u201d Savills adds. Indeed, its price forecasts see prime central London flat this year, before growing 2% in 2019, and 8% in 2020. Other prime London will not return to growth before 2020.<\/p>\n

\u201cThis combination of price falls in recent years with signs of stabilisation presents buying opportunities \u2013 not least in areas that buyers might have considered out of reach, or even over-priced, in recent years,\u201d says Dell. \u201cIf you\u2019re able to buy in Zones 1 or 2, and pay less than \u00a31,000 per foot, that represents good value, especially as medium- to long-term investment \u2013 it wouldn\u2019t have been possible across great swathes of central London just a few years ago.\u201d<\/p>\n

We consider the following five areas, most of which were trading at above \u00a31,000\/square foot in 2016, but which are now below that mark according to transaction data from LonRes, as representing good value:<\/p>\n