The central London market has been under pressure since 2014 when the Government made changes to Stamp Duty and yet the subsequent fall in prices only seems to have shown up in the data now.
Along with others I suggested that the market had peaked four years ago and since then have highlighted the gap between what sellers have been asking and buyers have paid. In London, where higher priced properties were caught by the new, higher rate taxes that George Osbourne introduced buyers passed on the additional cost to sellers in the form of lower offers. Some sellers decided not to sell at these reduced levels. More savvy sellers understood that if they took 10% less that then had hoped for their house they could shave a similar amount off what they paid for the next. Some estate agents even worked this out.
Today, across the country the average asking price recorded by the website Rightmove is 25% higher than the average sold (deal) price recorded by the Office for National Statistics. The former includes all the homes that don’t sell but never-the-less it goes some way to explaining why a third of homes for sale have cut their asking price.
Parts of London have seen some significant cuts, west London leading the way. Almost 42 per cent of the properties for sale in the south-west London commuter haven have already had their asking prices slashed, according to data from property website Zoopla.
There is a market in the Capital, people can still buy and sell but not at the prices they could have achieved four years ago. Selling is harder than buying and those wanting to move should listen carefully to the advice they get. Over-optimism will get you a bloody nose. Remember, the asking price is not a statement of what you will accept, it’s a way to demonstrate to potential buyers that you understand that things have changed. It’s still possible to achieve more but you can only do this if you attract more than one buyer.
Buyers who are ‘chain-free’, who are able to deliver on an offer can get some great deals today. Whilst there are still a lot of sellers who don’t need to sell or who won’t sell at today’s prices there are enough people who fall into what we call ‘the three D’s’. Those selling up as a result of death, debt or divorce. These people have to sell and many will take an offer if it is genuine and can be delivered in a few days. Nobody is interested in an offer subject to the sale of a property, the market is just too uncertain to wait for this to happen. If you want to strike a deal then make an offer but show how you can deliver what may seem a derisory amount of money within two weeks. You’d be surprised how many sellers will grab it.