Sellers and estate agents in the prime central London property market are being more realistic with asking prices and as a result there is movement in what has been a stagnant market.
The market has largely absorbed the stamp duty rises introduced in 2014 and for international buyers currency exchange means they are getting more value for their money, according to property search firm Black Brick.
There is strong interest from buyers in the Middle East and Asia and this could be due to them not being as affected by Brexit as would be buyers from Europe.
‘We are seeing vendors and agents become more realistic with pricing, and the market has now largely absorbed the stamp duty increases that came into force last April, so buyers are wanting to get on and purchase,’ said Camilla Dell, managing partner of Black Brick.
‘We don’t expect prices to fall much further. Indeed, the falls in prime London pricing over the last 12 months or so correlate very closely with the stamp duty increase. Those properties at the lower end of the market, where stamp duty was basically unchanged, have held their value well. However, for more expensive property, price falls tend to mirror the increased stamp duty charge,’ she pointed out.
‘This has given a useful yardstick on which to negotiate with sellers. We can look at the property’s value in 2014, take off the additional stamp duty, and use that as a benchmark. It’s proving a successful approach for us and our clients. It’s in a flat market like this where a buying agent can really help. We are going in, negotiating hard and it’s working,’ she added.
Black Brick has negotiated below asking price on 67% of the properties recently purchased on behalf of clients, on average by 7%. There are currently a range of buyers in the market from all nationalities particularly British and Middle Eastern of which almost 50% are owner/occupiers, with 25% investor led.
‘The fall in sterling has seen cost reductions in the 30% to 40% range for dollar buyers which is partly the reason why these buyers are keen to invest. Many have decided that this is the year to add to their London portfolios and we have been instructed by a number of families to start the property search,’ Dell concluded.