Market Update: London House Prices Are Booming Already
Jeremy McGivern is Managing Director of Mercury Homesearch, London’s premier search agents and sales negotiatiors for luxury properties. This month, we once again invited him to share his insight on London’s high end property market.
“Housing Market Is Back With A Bang” screamed the headline in The Evening Standard on Monday night.
“Knight Frank said last Saturday was its busiest ever for viewings with new buyer registrations in the second week of January almost double the level of 2018 and 2019.”
Meanwhile “Rightmove said today that the average asking price rose by 2.1% in the month to January 11th, the biggest monthly jump ever recorded at this time of year”.
I could go on, but you get the gist. The news is bullish!
Now some will have read the article in the Evening Standard with great disdain. “Of course, they’re bullish, they’re estate agents”, they will think. But, interestingly, these very same people will have read the pessimistic articles the paper was churning out last year and agreed with the bad news and forecasts unquestioningly.
But why give more credibility to the pessimistic articles when they were written by exactly the same journalists who are now writing the optimistic ones?
I point this out merely to highlight our bias towards giving bad news far more importance and credibility than good news. This is something I have written about on many occasions. Do you think you are immune to falling into the same trap?
I know I’m not. I may see through it when it comes to London property, but I have worryingly large blind spots when it comes to investing in equities, etc. Just something to consider, when you are hearing stories about London property.
So, is the market really taking off?
Well it very much depends on the property. As I wrote two weeks ago, properties that conform to our “Best in Breed” strategy will outperform while average and poor ones will lag significantly. This will not show up in the indices which will only show you the average and are therefore dangerously misleading.
An example of this is an apartment in South Kensington that I inspected and recommended to a client last year. It was off-market, but had been priced to sell. We had the option to buy it at the asking price, but my clients decided to buy one of the other opportunities I had found for them.
The same property came to the market last week, had multiple bids and is now under offer at well over the guide price – this highlights many things but two of the most important are:
- You don’t always need to negotiate a price reduction to get a good deal, but you do need to have a clear understanding of valuations.
- There is much higher demand now especially for the best properties
So, how do you find these “Best in Breed” opportunities?
Well the short answer is you replicate what we do for our members at Mercury Homesearch.
Remember, you have one goal: To acquire your ideal home or investment property for the lowest price or best terms possible.
To do this you need to leave no stone unturned. We have our “Dominant Buyer System” which is the process we use to ensure that we find the best opportunities. Most of the steps in the system you can follow yourself, although others you will find hard to replicate, for example we have a network of over 500 contacts for “off-market” properties.
But, the sad fact is most people only see a tiny percentage of the properties available, because they only stay in regular contact with 5-10 estate agents, so they invariably miss out on the best opportunities (there are over 230 estate agencies in prime central London). Does this sound like an intelligent way of approaching a £1m+ transaction?
So, if you are planning to acquire a property or have clients thinking of buying in London and would like to see all the steps of our Dominant Buyer System, you can request a copy of it by emailing [email protected] or calling 02034578855 (+442034578855 from outside the UK).