July Newsletter

As August is around the corner, the market is likely to slow down as families go on their holidays. August is usually a quite month, with more stock usually coming in September. According to the selling agents that I have been dealing with, viewing numbers are down, however there are fewer window shoppers and more serious buyers. Availability of quality stock seems to be the real challenge at the moment, but I am hopeful that this will change after the holidays. Over the last month, there has been three key themes; cash is king, it’s a buyer’s market and getting the right advice adds real value.

Cash is king

A key highlight in recent months is that market is being predominantly driven by cash buyers. According to an article in the Financial Times, “Cash buyers able to avoid the hit from rising borrowing costs are snapping up a bigger share of London’s most expensive homes, fuelling resilience in the UK capital’s high-end housing market. Equity buyers bought 71 per cent of homes in prime central London locations between January and May this year, compared with 60 per cent in the same period of 2022, according to data from estate agency Savills.”

Naturally, buyers at this segment of the market are not affected by mortgage rates. Many of these purchases are from foreign buyers who are taking advantage a weaker pound. A portion of these buyers are often from more unstable markets and have historically viewed London property as a safe haven to invest in.

This has helped the London prime market be resilient in comparison to the rest of the country. According to Savills, prices in prime central London have fallen by 1% compared to last year, while prices fell by 3.5% in the UK.

A buyer’s market

 There is no question that we are in a buyer’s market, especially with properties up to £5 million pounds (as these tend to be more reliant on mortgages) for those buying in cash. This segment of the market is more price sensitive now, so I have noticed some serious decrease in prices from sellers who set over optimistic prices. A good example of this is four-bedroom apartment on one of Kensington’s most prime streets that came on the market for £5 million at the start of the year and has since been reduced to £3.9 million.

Getting the right advice

Due to my knowledge of the market and relationships with selling agents, my two most recent clients were able to achieve fantastic discounts. One purchased arguably one of the best lateral apartments in Kensington for £5,400,000 – the original asking price was £6,450,000. The other purchased a fantastic Knightsbridge flat at £2,850,000, with an original asking price of £3,200,000. In both cases I had good relationships with the selling agents so they trusted that my clients would be able to close on the deal, which helped us achieved the discounts due to offering deal certainty.

This does not mean that there are significant price drops/discounts for every flat on the market as those that are priced well do sell with little to no discounts. Working with buying agent will help ensure that you are paying the right price – whether that’s achieving a discount on an overpriced property or buying at asking for a property that’s priced correctly. A buying agent will help you select the right home, whether it’s purely an investment or a place you’re planning on using yourself.

If you are interested in purchasing a property in London, please email iyad@iyadgrahne.com for a free consultation.