A specialist buying agent for Prime Central London (PCL) homes is seeing a growing number of vendors prepared to sell their property at a significant loss.
Jo Eccles, founder and managing director of Eccord, has found that approximately 80% of the properties acquired by her clients are being reluctantly sold by the owner for less than they paid for it.
She said: “Many sellers have been holding firm on pricing trying to recoup the price they paid for the property as a minimum, or their stamp duty cost too. This has been one of the biggest factors driving the price expectation stand-off between buyers and sellers.
“But in recent weeks we have seen a significant shift in the mindset of many sellers, reluctantly accepting market conditions and the need to tolerate a loss in order to achieve a sale. One seller, who had previously insisted on breaking even on their £21m Kensington home, has just accepted an offer of £18.5m. Another, whose break-even was £15.5m excluding stamp duty, has just accepted under £14m. These losses are being seen across all price points in the market.
“Most of these sellers are not forced but they are fatigued by the lack of appetite or simply wanting to move on – and they will accept a loss for a highly credible buyer approaching the situation with sensitivity and the ability to perform.
“It’s important to note that the price per square foot being achieved doesn’t represent ‘blood on the street’ as one family office told me they were hoping to find. Many of the prime postcodes are still achieving £2,500-£3,500/sq ft – so they are not ‘cheap’, but they now represent value for money with no peak of the market premium attached.”
This “realistic” pricing is enticing more buyers into the market, Eccles said, with momentum defying the traditional seasonal drop off. She has seen more than 60% of the transactions she been involved in during the last six weeks resulting in competitive bids.
“Sellers who have been bold enough to undercut the market are not only benefiting from increased competition, but also from herd mentality, whereby one offer can lead quickly to several.
“We have seen this dynamic play out with client purchases in Belgravia, Chelsea, Kensington, Queens Park and Hampstead.
“One of the key challenges facing buyers is confidently discerning the true value of the property and whether it has been priced to sell, or a negotiation margin has been factored in – and adapting their approach accordingly. Each scenario needs to be considered on its own merit and in such a dynamic and complex market, our clients value the clarity and confidence we bring both on values and negotiation strategy.”
Eccles said that Eccord has also been seeing growth in demand for its home management services.
“We’ve recently been appointed by several new clients including two British entrepreneurs repatriating to London to set up their latest venture.
“Ahead of them moving in next month, our team has been coordinating the appointment of household staff, stringent security, installing air conditioning and overseeing contractors carrying out refurbishment works. For one family, this has also included coordinating the professional remodelling of an adventure playground in the rear garden to suit their young children.
“Among non-doms exiting the UK but retaining their London homes, we are seeing a shift towards leaner and more flexible household management. Shying away from significant monthly retainers, many are opting for transparent and flexible property management services to ensure their London home remains meticulously maintained in their absence without a full roster of staff.
“This evolving landscape underlines the growing importance of discretion, flexibility and efficiency in prime and super prime home management – particularly as the implications of recent non-dom reforms continue to unfold.”
