Why is it so hard to buy a home in London?

One in four property deals falls through amidst upset and recriminations. The pick of homes never makes it onto the property portals in the first place. And even the experts can’t agree about which direction London’s property market is headed in.

There has surely never been a tougher time to buy a property in the British capital.

Needle in a haystack

The first challenge for buyers is that there is no single, comprehensive listing of homes which are for sale. Some homes are advertised one on of the UK’s property portals, but by the time they’ve made it online you can be certain the selling agent will have had a quiet word with potential buyers they already know.

Some vendors prefer to avoid going online altogether, to preserve their privacy and test the market without having to publicly set an asking price.

As a result almost one in three £1m-plus homes in London were sold off market in the final three months of 2022 (29 per cent) according to new research by estate agent Hamptons.

Back in 2019 off-market sales accounted for only 11 per cent of deals struck.

The only way for individual buyers to ensure they are seeing everything the market has to offer is to work with a professional firm with outstanding contacts with London’s leading agents, who can not only put the word out about what is required but vouch for your credentials as a serious buyer too.

Attempting to go it alone could be a full time job: according to a study by estate agent comparison site getagent.co.uk there are 481 individual estate agencies operating in London’s Canary Wharf postcode, some 471 in Westminster, and 464 in Bayswater. You get the picture.

Black Brick recently worked with clients with an incredibly specific idea of where they wanted to live. Relocating from Hong Kong back to London they were set on living on one of half a dozen streets in South Hampstead and were frustrated by a lack of stock. To make matters worse the family were stuck in Hong Kong thanks to the pandemic.

It might sound like mission impossible but Black Brick identified a super apartment in one of their preferred streets. It was not on the open market, and we were able to view the property on our client’s behalf before anyone else had seen it. It took us a week to agree terms – including a £50,000 discount on the £2m asking price – and our clients’ return to London went off without a hitch.

Chain reaction

Even once a buyer has found their perfect property and agreed a price with its vendor the problems just don’t stop.

The UK’s buying system is long winded by international standards, and until contracts are exchanged – and a deposit paid – there is absolutely nothing to stop one of the parties pulling out of a deal.

This long delay is important because it gives buyers time to fully investigate the property, commissioning condition surveys and making sure there are no plans for building in the area which might cause future problems and so on.

But it also means there is plenty of time for vendors to change their mind about the deal and decide not to sell, or to hold out for a higher price, sending buyers back to the drawing board.

According to market analyst TwentyCi around one in four agreed sales don’t make it to the finishing line.

To keep a sale on track buyers need to have their finances in order and an excellent team behind them – a proactive lawyer is a must, as is a trustworthy surveyor. Put very simply the faster that all the red tape can be cut through the less time there is for a vendor to change their mind.

Black Brick can introduce clients to just the right experts to keep deals moving:

We have just helped an American couple relocating to London for work exchange contracts on a £1.795m apartment in Notting Hill in just 13 days by keeping on top of the sale, and despite a (higher) rival offer, and our little black book doesn’t end there.

Another client bought a beautiful, but run down, £21.5m house, also in Notting Hill. They had been after a fixer upper they could put their own stamp on it.

And once the sale had gone through, we introduced them to best in class architects and planning consultants who helped them gain consent for a full refurbishment, including adding a swimming pool in the basement.

How much is too much?

A very real difficulty London buyers face right now is working out how much to bid for a property. Go too low and you risk offending and alienating the owner, but clearly nobody wishes to overpay.

This is a hard balancing act at the best of times. In the current market where, depending on which “expert” forecaster you choose to believe, property prices in London might inch up a couple of percentage points this year or, at a worst case scenario, could drop ten per cent.

Adding to the complication there is the fact that some vendors are living in the past, and stubbornly basing their asking prices on what neighbours got for their homes a year or two ago when the market was considerably hotter than it is today.

What buyers need is somebody with a keen understanding of the street-by-street market in London, and a smart negotiator who can press the case for their clients beyond how much money they are willing to pay for a home.

A family looking for a home in Dulwich recently enlisted Black Brick’s support after struggling to find a suitable property on their own.

They loved the 4,500 sq ft house we found them and took our advice when they ended up in a competitive bidding situation.

Their bid, of just over £5m, was in fact not the highest received by the vendor – but we were able to persuade them that our clients were their most credible, viable, potential buyers.