THE WORD with Patrick Rampton, Director Rampton Baseley
The market has obviously been affected by recent political events, with a much-increased level of anxiety amongst buyers. For the past 18 months or so, there has been an undersupply of quality, committed buyers, and an oversupply of mediocre, expensive stock.
Consequently, with oversupply and under-demand, prices have fallen. According to our research, prices came off about 8% in the year after the Brexit referendum, and have come off a further 2-3% since the election a year later. We think that the market is probably still softening, but may well firm up over the New Year with an influx of new buyers. We envisage the first six months of 2018 as probably the last decent market for quite a while.
We hear that Prime Central London sales, where so much is dependent upon investment purchasers and purchasers of choice, transaction volumes have fallen 30-40% since Brexit. Locally, the flat market (dependent upon first time buyers and investment buyers) and the top end of the market (up-sizers and luxury purchasers) has been very hard, as both these sets of buyers are buyers of choice rather than necessity.
On a brighter note, in our particular market, the family market (75% of our sales are houses in the £1.25-£1.75m price range) around the Commons, things have held up very well. We are dealing largely with buyers of necessity; people always get married, have kids and have to move from flats to houses or from medium-sized London houses to big country houses, regardless of events in the wider political world. And as ever, death, debt and divorce stalk the market.
The underlying market in our area is actually very strong. We had ten properties go to sealed bids ranging from £700k to £2m in the run-up to Christmas. But you have to get three things right; you have to start with a good product, you have to use a good agent (which we are), and you have to get the price right (with which we can help you). If you start selling too high, you will definitely end up selling too low – a recent analysis of over 370,000 house sales in the UK carried out by the consumer magazine Which?, found that properties with asking prices just 5% above where they should be, resulted in a sales prices 10% lower than the correctly price comparable properties.
These falls in prices and the heightened wariness of buyers, this market softening, has actually helped our agency’s performance. Our turnover is up 35% year on year. We believe that this is because when the market gets tough, sellers want an agent who knows what they’re doing. A professional, trustworthy agent, who might cost a bit more, but will handle the sale of their most precious asset with professionalism and skill. We are currently achieving over 98% of asking price for all sales this year, and in the past six weeks we have had sealed bids on nine properties ranging from £700k to £2m. The buyers are there, they just want to see sensible pricing.