Is this the end for luxury property 'bidding wars'?

Is this the end for luxury property 'bidding wars'?
Gone are the days of bidding wars for luxury properties, now it would seem that the lower the value of a property, the quicker it sells

The latest report from EstateAgent4Me has revealed that agents at the top end of the property market are being forced to sell properties for an average of £296,000 below their asking price - with many luxury properties in prime areas of London taking over 100 calendar days to sell.

According to the figures, agents who deal with houses with an average value above £2m are having to offer around 10% off the asking price before they sell.  

The data, based on estate agent performance during the first half of 2017, shows properties in the £1.75m - £2m bracket are seeing average discounts of around 12% and those priced between £1.5m and £1.75m are being marked down by 9%. These equate to average ‘discounts’ of £224,000 and £149,000 respectively.

Property Price

Average Reduction from Asking Price

Average ‘Discount’

£2,000,000+

10%

£296,278

£1,750,000 - £2,000,000

12%

£225,775

£1,500,000 - £1,750,000

9%

£142,219

£1,250,000 - £1,500,000

7%

£92,970

£1,000,000 - £1,250,000

7%

£77,716


At the lower end of the market, houses are also selling for under their asking price, but reductions are much more modest. Agents dealing with properties that on average sell within the £100k - £125k bracket are selling for around 6% under their asking price – a discount of just under £7,000.

In the middle range (£200,000 - £500,000) discounts are at their smallest, with the average reduction on the asking price only around 3%. This means a typical property listed on the market at £300,000 would be likely to sell for around £291,000, a reduction of just £9,000.

Property Price

Average Reduction from Asking Price

Average ‘Discount’

£175,000 - £200,000

4%

£7,741

£150,000 - £175,000

5%

£7,405

£125,000 - £150,000

5%

£7,082

£100,000 - £125,000

6%

£6,915

Under £100,000

6%

£5,030

 

The analysis also includes a look at how estate agents are performing across the country, contrasting the most expensive areas of each region with the least expensive. The figures demonstrate that, on the whole, agents dealing with homes at the lower end of the market are selling faster and achieving closer to their asking price than more expensive properties.

For example, in Hampstead, the most expensive area of the country, only 24% of properties listed for sale are selling. On average, those that do take 106 days to exchange and agents achieve only 89% of the original asking price for the seller. In Poole, which includes the millionaire’s playground of Sandbanks, agents are selling for an average of £924,436 but take over 112 days to do so, with agents achieving 93% of the asking price.

However, in less affluent areas of the country, agents tend to sell homes faster and agents get closer to the asking price. In Gosport, the least expensive area of the South East, property sells for an average of £194,969 and is on the market for 36 days, with agents achieving 97% of the asking price. Amongst the least expensive areas of the country, the outlier is Exmoor where property takes 144 days to sell, although this is likely to be a result of its remote location, rather than it being typical of inexpensive property.

Paula Higgins, Chief Executive of HomeOwners Alliance, said: “It is fascinating to see the difference in how the property market is performing at different levels and across the country. The key takeout is that there are significant reductions at the top end of the market where the market is very slow, while at more affordable levels, the market seems to be functioning fairly normally. Gone are the days of bidding wars for luxury properties, now it would seem that the lower the value of a property, the quicker it sells.

This data serves as a reminder to people, particularly those thinking of selling their homes, that they should make use of digital tools such as EstateAgent4Me to make an informed decision about whether to sell and who to list their property. The tool can help sellers find high performing agents in their area, which is all the more important when market conditions are difficult.”

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Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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