The headline figures may show prices falling, but the reality is that buyers in many prime areas are facing stiff competition for anything decent, warns Black Brick.
There’s very little similarity between the market data and what’s actually happening on the ground right now, a PCL buying agency has warned those winding up for a low-ball offer.
Black Brick suggests purchasers would do well to “disregard” the average price falls being reported in the press, as these are being driven by discounting on large new-build developments or properties in less desirable areas or even streets – and are also based on limited data (transaction volumes have been running at 55% below average, according to HMRC).
The reality is, says the firm, that certain types of properties in prime London remain very much in high demand, and forced selling has been minimised by low interest rates and government support schemes – as such, hopes of securing a chunky reduction on anything decent are fanciful…
Camilla Dell, managing partner: “There’s a big gap between what the market analysts are saying about falling prices across London and what potential buyers of high-quality properties in the best areas are finding. Buyers were led to believe during lockdown that prices would come off – in many cases, that’s simply not happening.
“Those sellers that are in the market are not desperate…There’s a real Mexican standoff.”
Many buyers have been holding fire for two or three years and are desperate to move, added Caspar Harvard-Walls, a partner at the firm: “If you’re looking in Hampstead, Barnes, or Fulham, you’re going to face a lot of competition.
“We’ve seen buyers coming in with a low-ball offer, seeing it quickly beaten, and then responding by paying the asking price or even above. Once they realise the depth of competition for good properties, it gives them the confidence to pay up.”
“Agents are rushed off their feet, but we’re not seeing the stock they are selling being replaced with new instructions: there could be a real squeeze come September.”
However, predicting the future trajectory of the market is proving tricky, said Dell: “There’s still the risk of leaving the EU without a trade deal, taxes will have to go up to pay for the Covid response, Stamp Duty for foreign buyers is going up next April, while limits on international travel will keep many overseas buyers away. It’s really hard to form a medium-term view on the market’s direction.”