The demand for London property has meant that it has been deemed a sellers’ market in recent years, however, this is changing for property priced £2 million and above, a new analysis suggests.
With significantly more stock on the market the city’s prime market is becoming more of a buyers’ market, according to independent property buying agency Black Brick.
Camilla Dell, managing partner of Black Brick, pointed out that there are currently 1,968 properties on the market priced at £2 million and above in central London, whereas throughout the whole of 2013 some 1,657 properties in this price bracket sold. And just four years ago that figure was significantly less at 1,096.
‘As such, it has started to become more of a buyers’ market for the first time in a long time, particularly in the super prime upper end of the market at £10 million and above. Indeed, we’re currently in the midst of a search for a client looking for a house in Mayfair/Belgravia from £20 million up to £100 million and there are well over 20 houses for sale in this price range. This is more than usual which shows the higher end of the market is slowing and buyers have more choice and bargaining power,’ she explained.
She also pointed out that in the current political situation in Ukraine if there are sanctions against Russia which mean that certain Russians might be exiled from the UK, this could create even more supply on the super prime end.
‘Many high end developers are now struggling to find buyers for their trophy mansions, and are having to become more realistic with their asking prices. As such, I believe we could see significant price drops at the super prime end of the market. Indeed, one house in Mayfair has already had a significant price reduction from £120 million down to £95 million,’ said Dell.
‘We advise buyers looking above £10 million to take their time and take advantage of the current market. Good deals can be had when there is an air of nervousness in the market and it is at times like these where we push hard to negotiate the best deals for our clients,’ she added.
Although the looming general election is a concern for both sellers and buyers, the significant rises in London property prices are also causing some buyers across all price ranges to hesitate and question whether it is the right time to purchase, according to Dell.
‘In our experience it is impossible to time a market. All of our clients who have decided to wait have inevitably ended up regretting it. The advice we give clients very much depends on their reason for buying,’ she said.
‘Generally, for those looking to buy a home, it’s much more about actually finding the right property, which can take time, than it is about price and getting a bargain, and we remind clients that even if the market does drop 5% or more next year, in the context of the entire time they are likely to own the property, short terms fluctuations usually bear little impact at the end of a 10 year hold period, for example,’ she explained.
‘For those looking to invest, it makes sense to only buy if the right deal can be found and this can be in any market, rising or falling. If you get the right combination of a good property that can be bought at pricing that makes sense, then it is worth going for. Again, buying an investment property in London shouldn’t be short term. We make sure that clients have a realistic view of how long they will need to hold onto to the property before selling it and making a meaningful return,’ she concluded.