New research from Bloomberg Intelligence highlights a 'spooked' market, where homebuyers are having to make sacrifices. The UK property market has been spooked by a number of factors in recent months, including rising interest rates, the cost of living crisis, and the ongoing war in Ukraine. This has led to a decline in demand for property, particularly in South London, where prices have been among the highest in the country.
As a result, many South London property owners are feeling spooked about the future of their investments. 50% (56% in October) of that group intend to purchase a house in 1-2 years (BI’s survey only includes those looking to complete within the next two years), a further 28% (27%) want to go execute on a deal in 7-12 months, with 17% (12%) preferring 4-6 months. Only 32% of buyers with unchanged schedules aim to complete in the next six months (only 25% in London). The market is likely to remain volatile for the foreseeable future, so it is important for South London property owners to be aware of the risks and to adapt their plans accordingly.
Home buyers who are pausing or delaying their homebuying plans cited elevated mortgage rates (30%) or the high cost of living (22%) as the most pertinent issues. Some buyers delayed their buying plans (16%) while waiting for house prices to decline, with a smaller group (14%) also worried about the economic outlook.
So what to do? Having worked in London property for 20 years I can assure you that Londoners are the last people to relent to having to drop their asking price. A wrong mentality in my opinion because it slows the market down and actually causes further price drops in the long run. A 10% reduction on a £500,000 sale in order to acquire a £1m property at £900k is still a net gain of £50,000 by my maths. So if you are looking to move up the ladder be firm with your onward offer and explain that you have to reduce in order to make the move otherwise it's not going to happen. A win-win for all I'm sure (providing the end of chain is motivated to sell - moving upwards or not).