Reviewing 2017, Mark Parkinson of Middleton Advisors identifies three counter-intuitive trends arising from a year in prime property when so much data and commentary was unsettling and often contradictory.
“The property market in 2017 appeared to us at Middleton, to be as polarised as we’ve ever seen it. We read plenty in the press about plummeting prices and some doomsday scenarios. And, of course, the increase in Stamp Duty was only ever going to lead to a reduction in transaction levels. Yet I’ve had conversations with selling agents who experienced record years. At Middleton, we had our best ever year, and we completed our biggest single transactions in both the London and the country offices.”
“There certainly remains an appetite and demand for prime property. But, as has been the case for several years, supply was very limited – probably at its lowest level since the Lehman collapse. And it gave rise to several counter-intuitive trends.”
“With any prime property purchase, there will be certain concessions a buyer is willing to make. So, for example, if they have a wish-list of ten features, they might be willing to compromise on three. In a demand-rich, supply-poor market such as we saw in 2017, logic dictates that buyers should be willing to compromise more. Yet, the opposite is often true. With so much contradictory economic data around, buyers – I believe – were nervous of making a mistake, and need advice as to when to commit and when to stand back.”
“Secondly, buyers like competition. If you are the only person bidding on an expensive acquisition, it’s understandable that you might wonder what the others know that you don’t. Of course, we would say that if your advice is sound and the pricing is accurate, it’s better to have the road to yourself, but it is hard to set a price without competition.”
“Thirdly, in the scramble to win business, some selling agents can be generous with guide pricing. When the price is pegged back to its more realistic level, this can give the impression of a falling market, increasing nervousness.”
Middleton Advisors act on behalf of private clients who wish to purchase or rent prime property in London and the country, and also advise clients looking to purchase investment properties in London.