A shortage of £1m property = an opportunity for sellers
2015 has already proved very active and exciting, with sales agreed on most of the properties we’ve marketed. That’s great news, but the stock isn’t being replenished fast enough and, particularly around the £1m mark, there’s very little to go round.
This is an ever-recurring story with London property, in regular high street agency as well as our own niche market. Obviously with lofts, warehouse apartments, school conversions and other unique living spaces we are dealing in a much smaller gene pool of the capital’s primarily Victorian, Edwardian and 1930s housing stock, but we’re also dealing with a smaller number of buyers. Most people buy a fairly conventional space, whether new build or period, and while cutting-edge design and architecture are ever on the rise, they still form a small part of the market.
One of the main problems is that people living in the types of property we sell, are often those who either don’t wish to start a family, or already have one where the children have grown up and flown the nest. So there’s not so much need to keep moving on as the needs of their family increase or change. Our clients tend to move for more, dare we say it, selfish reasons: often they move abroad for a work or other opportunity, and often that is only temporary. So they keep their property and rent it out, starving the sales market of a valuable listing. In fact, many of the reasons people leave their £1m urban home are short-term and, with a reasonable disposable income and equal love for their contemporary living masterpiece, they tend to hold onto their asset.
So how do we tempt and entice people into selling the home they love? What can we do to have them feel the very best course of action is to sell right now?
The one set of people who would do well to consider selling now are those holding onto their property purely for capital gain. We wrote in an earlier Unique Monthly Musings (late in 2014) that values had actually come down since their Spring 2014 peak, settling into a level at about 10% less than that period’s somewhat crazy goings on. That still holds true today and the view is that 2015 will see prices remain fairly static.
HOWEVER! The one thing that will achieve a higher price when prices are static is a lack of availability, particularly in a niche market like ours. A temporary willingness among the ultra-keen buyers to secure a property no matter what, could net you a percent or two over the going rate. Given the long-term holding nature of the clientele for unique living spaces in London, buyers in this market will take a view in a way that buyers of regular suburban homes often don’t. And with an often rather high deposit level, buyers in our marketplace are not always totally dependent on the valuation of the mortgage lender to match up exactly to the price agreed.
Let’s hope that does the trick.