During the first five months of 2022, a record 23% of property sales in London were conducted off-market.
The reasons for this?
The shortage of stock has given Londoners the confidence to sell discreetly with sellers often going under the radar to try an above-market price.
The first generation of off-market sellers were those primarily concerned about the privacy of their home, keen to ensure it wasn’t exposed to anyone who wasn’t serious about buying. This strategy was seen to be played out by prime Central London property owners.
Whilst these sellers make up around half of the homes launched off-market, they are now joined by Londoners, keen to minimise their digital footprint in what is an increasingly difficult market to navigate. So, with a current lack of suitable stock for investors on the open market, this method of selling offline has widened to the non-prime London market.
Typically, homes spend two to four weeks being quietly marketed to the agents’ established database of potential buyers, and other individuals such as property search agents or buyers, before either a buyer is found, or it’s then launched onto the open market to reach a wider audience with the asking price already tested.
According to a recent market analysis*, only 26% of homes being discreetly marketed go on to the open market.
How long will this trend last?
Defying the forecasts thus far, house prices have continued to rise, primarily as demand outstrips supply. The industry watchers are seeing signs of change, believing it will start to cool. Interest rates are going up, household finances are under increasing pressure, and an unsettled political backdrop with a change in Prime Minister are all strong factors to exert a cooling impact on the London market overall.
Whilst this may suggest the days of off-market sales may be limited, the agents have become accustomed to this relatively new strategy across the wider market, and many indicate they will continue this process of initial off-market ‘soft launching’ to test the market and the asking price, whilst also building up their database of buyers registering before launching online one or two weeks later.
For the buyer, it means the online portals are not necessarily giving them immediate access to all potential properties for sale, and registering with various agents or utilising a property search agent may be the way forward to get the full range of property presented to them. So, despite the changes in the drivers for this strategy, it seems the “off-market” sale may be here to stay irrespective of the change in market conditions.
Choosing an agent that knows off-market sales in London
Julie Matthews, our Head of Property Search, is well placed to guide our client landlords and investors through off-market buying. Whether they are for investment or personal use we’ll be able to match your requirements. Please contact us for more information about searching ‘beyond the portals’.
Source: *Hamptons
Written by Julie Matthews, Head of Property Search Samuel Estates