Rising Number of Properties Being Sold ‘Off Market’
The number of properties being sold ‘off market’ has increased in recent years, especially in the capital, according to a leading UK estate agent.
Selling off market has often been used more in prime parts of the country, such as central London.
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Keeping prices private and concerns over pricing are the primary motivation for most ‘secret sellers,’ according to Hamptons.
According to the company, between January and May this year:
- Almost a quarter of London homes sold off market. 23% of homes in London were sold ‘off market’, up from 20% in 2021
- Large proportion of homes sold ‘discreetly’ are outside the capital. 59% of off market sales are outside London
- Off market sales increased nationally. 10% of homes are sold off-market, with figures above 2015 levels
The main reasons behind the spread of off market sales into both country and non-prime markets is due to a lack of stock, and a seller’s ability to secure a higher price in a competitive market, rather than because of privacy concerns.
Off market sales trends
Things have changed in off market sales in the last few years:
- The average home sold off-market achieved £1.2m. But recent growth in off-market sales has increasingly been driven by lower-priced properties
- Average discreetly marketed home went for £858,000 in 2022. This is down from £979,000 in 2021
- Around 1/10 homes sold this year found a buyer without being publicly marketed. This is the highest level since 2015
Hamptons says that more vendors have embraced off market sales, as properties sold this way have achieved record prices.
With stiff competition for homes and a stock shortage, many buyers have been prepared to pay a premium to get a deal before a home is advertised more widely, including online.
So far this year, residential properties marketed more discreetly have achieved a higher proportion of their asking price than their counterparts which were more widely marketed, claims Hamptons.
- The average off-market home sold in 2022 achieved 99.5% of its asking price
- These figures exceeded the 2014 record of 98%, which was set in a strong prime central London market
- Similar homes marketed to a wider audience have achieved an average of 99.1% of their initial asking price so far this year, also a record
- These record prices are being achieved on the back of increasingly shorter marketing periods.
- The average home sold off the open market in an average of 42 days, compared to 65 days for a similar prime home that was marketed openly
- The average time to sell across the whole of the market in May this year was 26 days, up from 24 days in May 2021.
- The longer time taken to sell an off-market home reflects the increased length of time it takes to find buyers purchasing in the prime market.
Most homes spend around two to four weeks being ‘quietly marketed,’ before either a buyer is secured, or it is launched to a wider audience on the open market.
The rising popularity of off market sales
With more off-market properties securing a sale quickly, fewer homes are advertised more widely later as more off market properties secure sales quickly.
Head of research at Hamptons, Aneisha Beveridge, said selling off-market has become an increasingly established sales strategy over the last five years. She stated that the first generation of off market sellers were more concerned with the privacy of their home and didn’t want it exposed to anyone who wasn’t serious about buying it:
While these sellers still make up around half of homes launched off market, they were joined in 2016 by central London homeowners keen to minimise their digital footprint in what was an increasingly tough market.
She added that post-pandemic, selling off-market has increasingly been driven by sellers keen to avoid wider marketing and limiting the number of buyers through their doors. Beveridge feels this strategy has paid off, as buyers have been willing to pay a premium to secure their home off-market while competition is so fierce.
The number of homes on the market is forecast to rise later this year, so with more supply for demand, Beveridge feels that ‘off-market sales may retreat back into their prime heartlands’.
As the supply for homes is due to increase over the next few months, you have a lot more choice at your fingertips when it comes to finding your first home or your next buy-to-let investment. So now is the time to speak to one of our free mortgage advisors to plan your next steps.