By Hannah Aykroyd, Founder & MD of property advisory agency Aykroyd & Co
Contrary to what you may have read in the papers, the PCL residential property market is highly competitive at the moment. We are in a scenario of low supply and strong demand, and as a buyer you should not risk being complacent.
Prime Central London property has been the best-performing asset class in the world over the past 25 years. No wonder many investors consider PCL property as gold-standard. This is a particularly good time to invest as prices have come off 20-30% since the recent peak of 2014, and there's every reason to believe we're bouncing along the bottom of the market. Add to this the lower exchange rate of Sterling against the US dollar, and some investors are looking at discounts of 50% or more.
Many buyers are catching on to the value Prime Central London currently offers, and due to this and low stock levels best in class properties are consistently attracting multiple bids. Buyers who think they can take a leisurely approach, expecting their property of choice to still be available in a month or two are in for a shock. It is vital to be proactive and assertive when bidding and transacting.
As an award-winning London property advisory agency with over 30 years of experience between us, Aykroyd & Co have helped a range of private and investment clients source high-value property in London. Here are just a few of the strategies we recommend if you want to win as a buyer in today's competitive market.
Before you even begin your search, make sure you are fully prepared to act. This is because you may have to move very quickly once you identify a property you like and wish to secure.
Appoint an excellent mortgage broker, surveyor and lawyer who are well known in the London market, and have all your paperwork in place right at the outset.
Regulations in the UK have quite rightly tightened surrounding anti-money laundering, and so the paperwork is perhaps more involved than some may be aware of. You will be required to provide original documents or certified copies to your lawyer, lender and agent to satisfy these identity and anti-money laundering checks. For those buyers who are time restricted this can cause significant delays which has an impact on starting the purchase on a positive note and may even result in losing the property.
Cash is king and this clearly puts the buyer into a much stronger position than someone obtaining a mortgage. When we work with cash buyers, we're able to negotiate much more firmly as we can offer a faster exchange and provide greater certainty of getting the purchase safely exchanged and completed. If cash isn't an option for you, then it is vital you have a mortgage agreed in principle either directly through a bank or with a mortgage broker, so that you are in a much stronger position in terms of timings.
Stock levels are very low, especially for best-in-class and well-priced properties in desirable areas. Notting Hill, Belgravia, Chelsea and Maida Vale are all areas where we are seeing gazumping and competitive bidding scenarios - particularly for family houses. A current trend we are seeing is that the house market in PCL between £2.5m - £5m is very hot, whereas there seems to be less appetite for apartments. This is historically a busier time for the house market, allowing families to get settled ahead of the new school year. If you are looking for a family house in one of those areas, be ready to act swiftly!
It's also important as a buyer to be aware that many of the best properties in London sell off-market. As much as 50% of the property we transact on for our clients is being quietly marketed without ever hitting websites and the portals. This means that as a buyer, unless you retain a buying agent, you will not even be aware of much of the property currently available in the London market.
To win as a buyer the key is to move forward as quickly as possible once you've found a property you like. It is important to act quickly not just to pre-empt other offers, but also to show the vendor that you are fully committed to the property.
Vendors and also sales agents are often more concerned with reliability and profile than just price. As a buyer, if you can provide reassurance that you are highly committed and focused on purchasing the property smoothly and efficiently, your offer is more likely to be accepted - even if you aren't the highest bidder.
In order to help provide this certainty, we always follow up verbally submitted offer with a detailed and thorough written offer letter. We will include all relevant information such as our client's profile, financing position, lawyer's details, timings for exchange and completion, and any special conditions. Clearly, having representation in these situations give the vendor added confidence in your commitment to the purchase.
Once an offer has been accepted, a buyer needs to show strong commitment throughout the process to ensure the vendor remains settled and engaged, and a key part of this is good communication, even if it's only to report there is no update that day. The buying process is intense and often involves high levels of emotions, particularly when the property has been a family home rather than an investment property, so positioning yourself as a credible buyer is critical and creating trust and a bond where possible with the vendor is helpful.
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