Looking for a fire sale London property? New research suggests that you may have missed the boat.
Heavy discounting has been a hallmark of London's post-pandemic property market, as buyers put their properties on the market full of optimism of making a killing before cutting back down in order to match buyers' desire for a bargain, and then cutting still further in the face of tough negotiating.
But new figures suggest that markdowns are on the wane.
Just over four out of ten homes put on sale do still need a price cut before finding a buyer according to research from estate agent Hamptons.
But once owners have settled on an attractive price, competition has started to kick back in. One in three London homes ends up being sold at above their final asking price (32 per cent), up from less than a quarter in 2023, and above the England and Wales average of 27 per cent.
This means that, across the board, London homes are achieving 99.2 per cent of their final asking price.
This is the best performance since the start of 2022 when interest rate rises first started to bite, and the first time the capital has achieved the same average discount as the rest of England and Wales since back in 2016.
In south east London Becky Munday, founder of Munday’s estate agents, agreed some homes are still coming on to the market over-priced. “It is very aggressive between agents atthe moment, so they are estimating top money to get the instruction at the beginning,” she said. “There are also vendors who are not in a rush and who have a strategy: start high and see what happens, and drop the price if they need to in a month or two.”
When homes are sensibly priced Munday agrees there are plenty of buyers, especially for flats. “We are seeing flats go for above asking price,” she said. “Why? Its because rents areso high, and now that Covid is out of the way gardens are not that important.
"The only flats that are struggling are ones where the service charge is very high. When you have to pay £3,000-a-year even for an ex local authority flat in Southwark it is aproblem.”
Aneisha Beveridge, head of research at Hamptons, said that the figures show that the market balance is starting to shift.
“There is a little bit more demand in the market relative to supply,” she said. “London is the only region where there are fewer homes to buy than there were this time last year.The balance has shifted a little bit, and there is a bit more competition around.
“Homes which are priced to reflect today's realities are doing quite well, and are achieving close to asking prices.”
Looking forward, Beveridge expects house prices to flatline this year, but the number of homes being bought and sold to increase.
“2024 will see the number of people moving home recover much faster than prices,” she said.
