{"id":3419,"date":"2018-05-03T09:11:55","date_gmt":"2018-05-03T09:11:55","guid":{"rendered":"https:\/\/bb.pixelanddot.dev\/market-update\/may-2018\/"},"modified":"2026-01-21T12:07:55","modified_gmt":"2026-01-21T12:07:55","slug":"may-2018","status":"publish","type":"market-update","link":"https:\/\/www.black-brick.com\/insights\/market-update\/may-2018\/","title":{"rendered":"May 2018"},"content":{"rendered":"

<\/a>Why buyers have the whip hand – and what to do with it<\/p>\n

\"\"<\/p>\n

Although the London property market may not be at its most buoyant at present, it\u2019s worth remembering that it\u2019s currently a buyers market \u2013 and early indications are that it might not stay that way for long, as economic and political uncertainty begins to lift.<\/p>\n

Low sales volumes notwithstanding, signs are that those sellers in the market have absorbed recent rises in Stamp Duty in their asking prices and are, increasingly, prepared to accept discounted offers. According to figures published by Coutts, 53% of prime property is being sold below asking price, compared to 42% last year, with buyers securing an average of 12.1% off the asking price.<\/p>\n

It also finds healthy amounts of stock in the market; 22% more properties in the first quarter of 2018 compared to the previous quarter. \u201cWe expect sales volumes to pick up again next quarter,\u201d the bank says.<\/p>\n

As Savills observes, in its latest UK prime report<\/a>, there were 19,300 sales of \u00a31 million-plus properties in the UK in 2017, 4,400 more than in 2007. That represents one sale every 27 minutes.<\/p>\n

In further evidence of the where power lies in the current market, data from Hometrack<\/a> finds that there are now 1.5 homes coming on to the market in London for every one sold, a mismatch which it attributes to the amount of time it is taking to sell property.<\/p>\n

However, we think that things could be about to change. Investors who have been sitting on the sidelines as prices have ticked down, and amid the uncertainty around Brexit, are poised to re-enter. \u201cWe are fielding incoming requests from investors who believe that, with the March 2019 date at which the UK is set to leave the EU fast approaching, now could be the time to re-engage with London property,\u201d says Camilla Dell, Black Brick Managing Partner.<\/p>\n

While the current market favours buyers \u2013 particularly given that those vendors pressing ahead tend to be highly motivated to sell \u2013 it nonetheless remains a difficult one to navigate. Many vendors continue to see advantage in selling off-market, to avoid \u2018tainting\u2019 their property if it fails to sell quickly, and even those properties that are on with estate agents are often marketed with limited information. So far this year, almost half of the properties we have sourced for buyers have been off-market.<\/p>\n

\u201cIt may be a buyer\u2019s market but, as always, good properties sell extremely quickly,\u201d says Dell. \u201cIt\u2019s enormously important to have the contacts to get early access to properties as soon as they come on.\u201d<\/p>\n

There are substantial discounts to be had,; we have averaged a 9% reduction on asking prices this year, with this month\u2019s acquisition of the month reaching 19%. However, there are considerable challenges in negotiating effectively, Dell adds. \u201cIt\u2019s very easy to be overly aggressive and alienate the vendor. Every negotiation is different \u2013 there\u2019s no rule book.\u201d<\/p>\n

 <\/p>\n

<\/a>A dispatch from the Far East<\/p>\n

\"Black<\/p>\n

Black Brick Partner Caspar Harvard-Walls has just returned from a marketing trip to Hong Kong, where he found the softness of sterling, the falls in London property prices and low interest rates tempting overseas clients into purchases.<\/p>\n

\u201cAmong investors, there remains a strong interest in London residential property, although some are looking outside of the capital for higher rental yields,\u201d he says.<\/p>\n

Meanwhile, ex pats are taking advantage of current conditions to put longer-term plans in place. \u201cMany ex pats expect to return to London at some stage, but they may not have clarity on when this might be. They recognise that the current residential values, the low cost of finance and weakened sterling are making it attractive for them to consider undertaking a purchase now and then renting the property out until they need to use it themselves.\u201d<\/p>\n

Such a move allows buyers to lock in recent price falls and insulate themselves against likely price increases. While few analysts are expecting much near-term price inflation, the story is different over the medium term. Savills, for example, is forecasting a 20% rise in PCL values by the end of 2022.<\/p>\n

\u201cOur ability to act on the acquisition and then for our property management service to come into play is very attractive for these clients who want a single point of contact,\u201d he adds.<\/p>\n

Similarly, many ex pats left London owning a one- or two-bedroom flat, but have since married and have had children \u2013 meaning that, once they return, a flat would no longer be a realistic home for them.<\/p>\n

\u201cWe are currently advising clients to look at the softer market as an opportunity to upgrade,\u201d says Harvard-Walls. Black Brick\u2019s managed sales service allows us to advise clients not only as to the right value of their property but also the best possible sales strategy.<\/p>\n

\u201cOnce the sale has successfully concluded, our search and acquisition service can be engaged to find a suitable long-term home which can be let and managed through our property management service until our clients move back from abroad,\u201d he adds.<\/p>\n

 <\/p>\n

<\/a>Mayfair outpaces Knightsbridge<\/p>\n

\"\"<\/p>\n

Property in Mayfair is strongly ahead of Knightsbridge<\/a> in terms of prices per square foot for the first time in a decade, according to figures from property agency Wetheralls.<\/p>\n

In 2017, Mayfair apartment prices averaged \u00a32,378 per square foot, a 6% premium over Knightsbridge, which sold at an average of \u00a32,242.\u00a0In 2016, Mayfair edged ahead of Knightsbridge, with average prices of \u00a32,314 per square foot and \u00a32,299 per square foot respectively, but the latter had been on top from 2011 to 2015. This was partly due to ultra-prime developments such as One Hyde Park, which opened in 2007.<\/p>\n

However, Mayfair has seen a flurry of high-end developments of its own in recent years, such as 20 Grosvenor Square, Fichatton\u2019s redevelopment of the US Naval HQ, and Clarges Mayfair. It has also been boosted by renewed investment from the Gulf.<\/p>\n

Wetherells is also expecting a further lift to Mayfair prices from the Elizabeth Line, which opens in December, due in part to the revamp of Bond Street underground station.<\/p>\n

 <\/p>\n

<\/a>Camilla Dell at Coutts<\/p>\n

\"\"<\/p>\n

We were asked by private bank Coutts for our views on London\u2019s property market last month, leading to a series of quotes from Camilla Dell appearing in its quarterly property index newsletter.<\/p>\n

Dell was also asked to go on camera, alongside Alex Michelin, co-founder of prime development company Finchatton. The results, which can be viewed here<\/a>, will be playing in the garden court at Coutts\u2019 Strand headquarters.<\/p>\n

\u201cAverage prices in Mayfair will have been boosted by some of these super-prime new developments, where prices can reach \u00a34,000-6,000 per square foot,\u201d says Dell. \u201cAnd we are always likely to see a flight to quality during uncertain times.<\/p>\n

\u201cBut we\u2019re certainly seeing more interest from Gulf buyers and from other emerging markets, many of whose economies are linked the oil market. With oil having recovered to close to $75\/barrel, these buyers are feeling more confident.\u201d<\/p>\n

 <\/p>\n

<\/a>Acquisition of the month – a 19% discount at Bedford Gardens, Kensington, W8 – \u00a35,050,000<\/p>\n

\"\"<\/p>\n

With a growing family, our clients were looking to upgrade from their apartment in Kensington to a house, and were looking for somewhere with the potential to add value. They had started looking themselves, but had become frustrated with limited stock and unrealistic vendor expectations.<\/p>\n

We found an off-market property<\/a>, with permissions granted for substantial extension. We undertook detailed due diligence on the likely cost of the work \u2013 at no charge to the client \u2013 and offered accordingly. Initially, our offer was rejected in favour of a higher bid, but we declined to counter, given our view of where value lay.<\/p>\n

We stayed in contact with the selling agent and ultimately the other party withdrew their offer. We successfully exchanged contracts at \u00a34.85 million \u2013 almost 19% below the \u00a35.95 million asking price.<\/p>\n

Our client was delighted with the outcome, stating:<\/p>\n

\u201cYou\u2019ve been professional from start to finish. Punctual, commercial, rationale, respectful and value added throughout. We will use you and only you again if\/when it comes to the next search. And I will recommend you to anyone who I know is looking to buy. Top class work Caspar. You\u2019ve 100% earned your commercials\u201d.<\/p>\n

 <\/p>\n

<\/a>Managed sale of the month – Redcliffe Square, Earls’ Court, SW10 – \u00a3640,000<\/p>\n

\"\"<\/p>\n

There are good reasons why vendors sometimes look to sell properties off-market; it can help to create urgency with buyers who are keen to close the transaction before it is offered more widely. Our client, a trust based in Jersey, was looking to consolidate its portfolio, and came to us to help it sell an apartment in Earl\u2019s Court.<\/p>\n

What should have been a straightforward sale of an attractive property in a popular garden square was complicated by the managing agent issuing a notice for significant major works to the roof. Despite this, we were able to come to a view on the cost of the works, and held the buyer to an offer just 2% below the asking price.\u00a0 This worked out at \u00a31,441\/square foot, which compares well with the two most recent comparable sales, of \u00a31,267 and \u00a31,145\/sq ft.<\/p>\n","protected":false},"excerpt":{"rendered":"

Why buyers have the whip hand – and what to do with it Although the London property market may not be at its most buoyant at present, it\u2019s worth remembering that it\u2019s currently a buyers market \u2013 and early indications are that it might not stay that way for long, as economic and political uncertainty […]<\/p>\n","protected":false},"featured_media":2923,"template":"","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","inline_featured_image":false,"ghostkit_customizer_options":"","ghostkit_custom_css":"","ghostkit_custom_js_head":"","ghostkit_custom_js_foot":"","ghostkit_typography":""},"tags":[],"class_list":["post-3419","market-update","type-market-update","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nMay 2018 | Property Market Update | Buying Agents | Black Brick<\/title>\n<meta name=\"description\" content=\"Check out our market report for May 2018 featuring industry news, advice and our 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