Is there still a market for property in Hampstead or do I need to accept a big price reduction on my home?
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There are buyers out there, but thanks to Stamp Duty and Brexit they will expect a price reduction of at least 10 per cent compared to 2014 prices before agreeing says Aree Rand of Knight Frank Hampstead
Since September the Hampstead office of Knight Frank has been very busy with many buyers coming out of the woodwork to try to find homes near good schools now the summer holidays are over. In fact, we’re the busiest we’ve been in 12 months.
British buyers are typically looking for anything between £4m and £7m; we’re also seeing Middle Eastern buyers in the £8m to £10m bracket; and at the level of £10m to £15m we’ve seen a significant influx in the number of Chinese buyers.
I need more stock across my entire portfolio from £1m flats to £10m houses because I’m running around with some great buyers and I just don’t have enough new properties to show them. This is all good news for anyone planning to sell their house.
But until I get more stock I need to go to my current vendors and persuade them to price their property more realistically in order to get more traction.
The property landscape has changed dramatically in 2016. The Stamp Duty changes of the past couple of years combined with the shock and uncertainty of Brexit mean that vendors need to be flexible with their pricing. If you’re serious about selling your home you need to be responsive to the current market and not expect to sell for 2013/14 prices.
Sellers should base their pricing on current property trades, not on two or three years’ worth of numbers. It’s more important than ever to listen to advice from your agent and be realistic about the price you expect to achieve and the price you’re prepared to accept from a buyer.
I’m not talking about desperate sellers in a fire sale but we are definitely seeing properties selling for between 10 and 15 per cent below what they were selling for a few years ago.
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For example I’ve got two sellers on Redington Road, one of whom seems likely to agree a price for close to £1,000 per square foot. That’s incredible value for money. Two years ago we were achieving £1,200 per sq ft on Redington Road. Nowadays you can probably buy a property on Redington Road for £1,000 per sq ft.
At the same time I have another seller on the same road who, having lived there for 40 years, their children have left home and they would like to downsize. They don’t need to sell and so they’re more interested in what they might be able to get for it. I’ve given them a number that’s a little on the bullish side and they probably won’t get it (although, as ever, you only need one buyer to fall in love with a property to sell it at the price you want), but I’ll be able to bring people to the table at closer to £1,100 to £1,200 per sq ft and they can negotiate from there.
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If you’re a motivated seller, you need to price correctly in order to get people through the door. Realistically priced properties get more click throughs online, they get more viewings and consequently they get more offers. I’m not saying they get acceptable or realistic offers, but an offer means you can have a negotiation from which you stand a chance of agreeing a deal. If you don’t have any offers, you don’t have any chance of agreeing a deal.
We’re definitely not looking at a firesale, but there has been an adjustment in prices and sellers who refuse to acknowledge that are unlikely to get anyone to look at their home, let alone buy it.
Aree Rand is office head at Knight Frank in Hampstead, 020 8022 3739.