At the very top end of the market, don’t be fooled into thinking it’s all gone quiet. According to agency Beauchamp Estates 54 properties worth over £15m sold in 2023 driven by interest from the US, Middle East, China and India.
The firm is expecting more of the same this year, with these buyers seeing central London as a “proven safe haven and stable asset class” regardless of what goes on within domestic politics says director Gary Hersham.
Nothing is perfect
The only way to establish when the bottom of the market has been reached is when prices start to go up – which can be too late for some. “If you find a property that ticks six or seven boxes out of ten, then be prepared to make a compromise and go for it,” recommends Nick Loweth at The Country House Department, an estate agency.
Extra help finding the perfect property
Buying agents
Increasingly present at the top end of the market, a buying agent is someone who will advise you on what (and what not) to buy and will also open properties that aren’t advertised on the standard web portals.
To prevent potential conflicts of interest, they are mandated to represent one client with a particular brief or search area, so, if you are looking in a particularly popular location or price point, find the right one sooner rather than later or you might find no one is available to help.
Door dropping
If nothing is coming up via online searches, it might be worth doing a letter drop in the search area or asking someone on the local Nextdoor group (a kind of hyper-local Facebook group) to post a message on your behalf. There are obviously no guarantees but it has been known to result in success – catching unawares someone who was thinking about selling.
Keep the letter simple and explain the details behind the move and the chosen street or property. Vendors are likely to be emotionally invested in their houses, so presentation is key.
Other options include posting on local Facebook groups or using Nokkel, an app that links buyers and sellers.
Getting the best price
Negotiating a price
If the market dynamics carry on from last year, push on the price. According to Hamptons, which looked through data from its parent company Connells and their 550-strong branch network, 55pc of the properties sold in 2023 went for below asking price.
“The mismatch between what price sellers expected to achieve on their home and what buyers were prepared to pay promoted more negotiation last year,” says head of research Aneisha Beveridge. Having said that, they also called the bottom of the market in November and as affordability improves and demand strengthens, this negotiating power will start to wane.
Don’t expect huge bargains, though. Richard Donnell of Zoopla says that mortgage regulations introduced in 2014 stopped the over-valuation of housing which is why the decline in house prices has been modest. Having said that, UK housing is still expensive by historic standards and Donnell anticipates prices will fall a further 2pc over this year as prices and incomes re-align.
Paying the price
Beware of renegotiating an agreed sale price, otherwise known as “gazundering”, warns Mark Harris.
He says: “Lenders will need to be told about the renegotiated price and, even if the amount borrowed remains the same, a new mortgage offer will be issued.
“This may mean paying a higher mortgage rate or, worse, the lender may reduce how much it is prepared to lend – especially if the affordability criteria have changed.”
Purchase costs
Remember, there is more to it than just the sale price. Data from the price comparison site Reallymoving shows the average cost of moving is now more than £14,000 – and much more for those buying at the top end of the market.
First, it’s the “soft costs”. Most mortgage lenders will require an arrangement fee and then there’s a valuation fee the lenders charge to check the property offers sufficient security for the loan.
A typical broker fee in the UK is between 0.3pc and 1pc of the value of the property, which works out as an average of around £500, according to Expert Mortgage Advisor.
Next is the survey, which many prospective buyers pay for even though the sale falls through. Budget for paying this more than once in the process of a house search and expect to pay between £400 and £1,000 each time.
Then there are conveyancing fees, which range from around £500 to £1,150, plus approximately £700 in disbursements (third-party fees for things like local authority searches), according to Reallymoving.
The final, and often the most substantial (after the property itself) is stamp duty. You can read all about that, here.
