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.”

Join our mailing list:

Leave a comment



Latest Comments

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.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

view article
brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

view article
IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

view article
IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

view article
cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

view article
Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

view article
NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

view article
Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

view article
Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

view article
jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

view article

Related stories

More articles from Property