Samir Salya on the Big Discounts Being Seen on Top-End London Property

With uncertainty in the London property, political and economic sphere being witnessed, top-end property prices are paying the price. High-end homes in central London are selling at the biggest discounts in more than a decade. This continues as sellers set ambitious prices despite the declining market.

Confident buyers taking control

As the property market shows increasingly worrying signs regarding its future, many buyers in the capital are showing more confidence than ever before.

According to the Head of Research at LonRes, Marcus Dixon, this is resulting in buyers demanding more discounts and sellers becoming more likely to accept lower offers. Speaking to the Financial Times, Dixon states: “People are going in with relatively cheeky offers, and sellers are accepting them. There’s a bit of realism creeping in about what properties are worth.”

This means that buyers are more likely to get a better deal in a city where prices have been increasing at a rapid rate in recent years.

Decreases in asking prices at decade high

Discounts to the initial asking price are now standing at just over 9%. This is the lowest level seen since 2009. Since the property market peak in 2014, prices have rapidly decreased. Compared to this peak, prices per square foot have fallen 5%, while properties in the most expensive areas are witnessing falls of up to 11%, according to figures by LonRes.

Buyers unwilling to sell

Due to these poor market conditions, more buyers than ever are choosing to take their property off the market I the hopes of achieving higher prices at a later date. This is seen through LonRes’s data highlighting how transaction volumes have fallen across central London in 2017. The number of properties sold in the capital is down 3.6% over the year, with fewer homes being put on the market.

LonRes told the Financial Times that people were still taking their homes off the market if they could not achieve their desired price. More than half the homes leaving the market in the fourth quarter of 2017 were withdrawn rather than sold.

A shift in attitudes?

Despite the decrease in the number of properties brought to market, some experts believe that attitudes are shifting towards what buyers expect to get for their home. According to Charles McDowell, of Charles McDowell Properties, a prime London estate agency, expectations are being set lower. He reports that sellers are beginning to accept the new lower values of prime central London homes and that they are unlikely to grow in the upcoming years.

Speaking to the Financial Times, McDowell states: “Sellers are saying, ‘if I get a buyer at a reasonable level, I’ll do a deal’. There are deals being done — quite big-ticket deals — but this is certainly a market where buyers perceive value.”

While the future of the market remains unstable, the exponential growth of property prices in the capital has unquestionably ended. As buyers and sellers adjust to these new lower prices for prime London property, it is unclear the effect this will have on the market.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.