It’s been widely reported over the past year that the secret sales market is no longer the preserve of only the most valuable of London property.
What does this mean for house sales here in West London? As local estate agents, Horton and Garton advise clients on the best strategy to achieve the greatest result and it has often been the case that an off-market approach has been beneficial. Is a secret sale always a good idea?
The secret sales market
Around £30billion worth of property was sold off market last year, a staggering figure and a large proportion of the overall number of homes sold across the country. It’s been estimated that in 2021 almost 100,000 properties were sold on the secret market, which is over 50% more than were recorded in 2020, according to research from Alliance Fund.
This surge in secret sales came after a long period of decline in off-market sales. The numbers recorded last year were the first annual increase in off-market sales since 2017.
Research released earlier in the year revealed that during the first five months of 2022 a record 23% of London homes changed hands without being openly marketed, a rise from 20 per cent in 2021 over the same period. It was more recently reported that across the UK, one in ten homes were sold off-market this year, rising to one in five in London and to almost a third of all London homes over £1 million.
Why are homes sold off market?
Over the past few years, the main reason given for selling discretely and away from the open market was due to the overwhelming demand from buyers. It has been the case that selling agents have had long lists of serious and committed, prospective buyers for each property made available for sale.
For sellers the merits of selling secretly vary depending on a homeowner’s motivations and time-pressures. Openly marketing and having multiple viewings can be stressful, selling off-market, inviting only those buyers who are in a position to proceed and are a good match to the property can feel a lot calmer.
Other sellers might be keen to sell discretely as they are keen to find a buyer who’s more flexible and amenable to their time frames without the usual pressures involved when listing on property portals. Secret sales are also often preferred in sensitive situations, such as those involving divorce, debt or death.
It is also the case that discerning individuals, those who might be recognisable or simply value their privacy, would prefer not to advertise their home for sale publicly and instead opt to quietly sell. This is one of the longest standing reasons behind selling secretly and through an estate agents’ professional network, and their book of buyers, it’s often possible to transact entirely without advertising.
The London property secret sales market has historically been a place where buying agents have operated. And with the surety of a buyer who’s working with a buying agent; vendors believe that those who might be introduced off-market are more serious and committed. There’s sometimes a belief that an off-market sale is less likely to fall through, especially when a property finder is involved, as the property finder will have independently confirmed their client’s ability to proceed.
Today, the reasons behind selling off-market have shifted. So why are sellers choosing to keep their homes off the internet and only inviting a select list of buyers to view.
Why the market climate is leading to more secret sales
It’s no secret that property price growth has slowed as we’ve neared the end of 2022 and as pricing has cooled, sellers are increasingly choosing a more secretive approach to their house sale.
Traditionally there is an increase in the number of transactions that take place quietly, away from the open market over the winter. Whether it be that a seller doesn’t feel their home will photograph well in the darker, wetter months so wishes to wait for full marketing but is happy for selective viewings. Or perhaps the agreement with an agent is to stall open marketing until after the festivities but should a suitable buyer arise in the meantime, there can be special arrangements for a viewing.
This year though, sellers might be keen to apply the off-market approach to test the appetite for their property. And in some instances, agree in advance with their representing selling agent that they will only advertise their home fully for sale if it does not sell off-market over an agreed time period, or subject to review at a later date.
In a changing market, sellers are not entirely sure of where the market sits and can be keen to test the appetite, and often the price tag, with just a few selected buyers rather than come to the market at a full price only for their home to sit online unsold for some time or suffer a publicised price reduction.
It is also the case that sellers are keen to cherry-pick who can be invited to view, there is a nervousness surrounding agreeing a sale that involves a large mortgage. Thought at the time of writing, the mortgage market is showing signs of greater stability, this sentiment is likely to still be present.
With sellers giving multiple reasons to sell their London property secretly, it’s of little wonder that there continues to be such a large proportion of transactions carried out in this way, despite the cooling market.
Does selling secretly always work?
In many instances, selling off-market will work in the seller’s favour, but it is also the case that selling secretly is not the best strategy.
Sellers are wise to take their selling agent’s advice, which will be appropriate to an individual property, the location, recent transactions in the locality, market climate and buyer appetite.
In certain sections of the market where supply is particularly limited, a ‘secret’ pre-market period can serve as an effective tool as part of a wider strategy for achieving the greatest result.John Horton, Owner and Director
It is sometimes the case that a seller will prefer to be quietly available, at least in the initial stages but that at a later date the property will come to the open market as a vendor might become increasingly motivated to sell and understand what full exposure of their property online can bring.
If you’d like to discuss selling your home, our team of local experts would be delighted to explore the best strategy for your sale. Get in touch for a no obligation discussion.