“Let’s be clear: we’re not selling anything at asking price.”
A great article by Hugo Cox in the FT this morning may be of interest to anyone thinking of buying or selling and it goes a long way towards explaining whats happening not just in London but more widely across the South East. What is happening here now is what I think many other areas can expect in 2019. The FT operate a paywall so you ought to need to pay to read it but I’m going to include some of the best bits here;
In Muswell Hill, Chris Mullin of Hamptons International is increasingly finding himself avoiding the internet altogether. A third of homes he has sold this year have been off-market, he says: typically he will offer a promising new instruction to half a dozen of the most likely prospects first, without producing any marketing literature and certainly without listing the property on the company’s website. With prices falling, and buyers’ estimates of a home’s value often at odds with agents’ own, one advantage of the marketing period is as a reality check on owners’ expectations.
As websites record the number and scale of subsequent discounts, keeping a home off the internet avoids an overzealous initial price listing coming back to haunt a buyer. This is more of a risk now that deciding on a price involves a high degree of guesswork. Five years ago, agents risked being out 5 per cent either way; today the margin of error is double that, says Henry Pryor, a London buying agent, who estimates the 40 per cent of the homes he finds for buyers have been nowhere near the internet. “In the worst case this means that a seller ends up with a price that is 20 per cent too high.”
Could this savvy marketing by Mullin and his colleagues be having an impact on Muswell Hill prices? They certainly appear to be ducking the worst of recent falls. Over the past year, prices in the area have gained 3.3 per cent, compared with a fall of 1.6 per cent in what he terms “prime fringe London”, according to Land Registry data analysed by Hamptons International. Over two years Muswell Hill has gained 10 per cent, while prime fringe is down 3 per cent.
Price gains hide low demand for flats. Buy-to-let investors abandoned the area following the 3 per cent second home stamp duty levy in April 2016, says Mullin. “I have had one this year; for the price of a two-bedroom flat here you can get a four-bedroom house in nearby Wood Green.”
Elderly downsizers are also feeling the squeeze when it comes to a move to Muswell Hill. Tim Jackson of JAMM Living is selling The Fortis Collection, a development of six duplex flats, including a three-bedroom property costing £1.35m, and three houses on Eastern Road.
“I could have sold all of the flats to downsizers,” he says. The problem, apparently, is that these prospective buyers can’t sell their pricier homes — typically period houses for sale for between £2m and £2.5m in Mill Hill, Finchley or Hampstead.