Demand is soft at this end of the market whilst supply remains strong.
There is very little benefit from the recent stamp duty cuts (max £5,000 saving for buyers at this level) and importantly mortgage lending has tightened since covid. Before covid, buyers at this level would often get up to 95% LTV mortgages. Banks are typically now only offering up to 80% LTV. This has increased the deposit requirements by 400% from £15,000 cash to £60,000 for a buyer of a £300k property.
Buy-to-let investors have also pulled back as they expect a softer market later this year.
This combined reduction in buyer numbers is feeding through into less viewings and softer demand.
We’ve mentioned before that the portals are not providing much incremental traffic to listings at the prime end. To put this into perspective: for quality stock over £1m+ in London, we have seen agents generate 70% of their viewings from call-outs to their database and only 30% coming from new applicants responding to online adverts.
This reinforces the fact that prime vendors not only need the agent with the most applicants, but also likely more than one of them. Anyone using an online agent is going to have even less luck than usual (1% of you are still trying them here).
Movewise consults all vendors for free on those agents that are likely to have most applicants for their property and we’ll work with more than one if needed, so give us a call on 02034094350 or register here for a free consultation.
We are really busy in this price range seeing good levels of viewings and offers. Buyers here are often funded by “Bank of Mum & Dad” (or Grandpa and Grandma!) with 100% cash deals.
This is also the sweet spot where the impact of stamp duty changes are maximised at a buyer saving of £15,000, bringing more buyers and vendors closer in agreement, closing more deals.
However buyers certainly have choice and so they are less willing to negotiate. We have seen examples of offers being pulled by buyers because vendors were slow to accept. Vendors beware, if you are pricing reasonably and have a bird in hand, take it and move on.
Vendors be very cautious of that £200 you might save on your conveyancer selection. We are seeing a number of poor quality conveyancers stalling the sales process by not being on the front foot.
Movewise works with excellent conveyancers so we encourage you to use our recommendation. Cheapest is not best in a soft environment when we want to close deals. We are also Property Information Packs supplied by PIP which will help facilitate closing rates.
Have a great weekend all.
The Movewise Team