Homes in a third of London’s boroughs are routinely selling above their asking price. A new study, published today, details the locations where buyers need to offer up to £23,000 over the asking price to secure a deal. But it also highlights the spots where it is possible to talk a price down - by anything from £1,000 to more than £20,000.
The study by Hamptons International is based on analysis of thousands of sales across London in the past year. It compares the most recent advertised prices with the figures homes ultimately sold for. It provides an invaluable insight into how offers on properties across London should be pitched at a time when there are often more than a dozen buyers chasing each home, and bidding strategy is crucial.
Hamptons’ head of research Johnny Morris, who compiled the report, said today’s figures show how better-value areas are in far more demand than the traditionally popular boroughs, where prices have spiralled.
“Areas which are relatively cheap compared to the quality of their transport links - places such as Southwark and Tower Hamlets - are shooting ahead. Areas where there is a lot of regeneration and gentrification going on, such as Hackney and Greenwich, are also seeing a lot of interest.” In Southwark, strong demand has boosted average selling prices almost five per cent above asking prices. This means adding £22,981 to an average asking price to secure a sale.
IMAGE GALLERY: A COMPARISON OF ASKING PRICES vs SELLING PRICES IN EVERY LONDON BOROUGH
Oliver Burgess, a director of Winkworth, is based in Dulwich. He believes the area’s good transport links - with the East London line extension giving neighbouring Peckham Rye a particular fillip - Victorian houses, good schools, and a burgeoning café culture, are drawing in young families from areas such as Clapham and Balham, as well as from north London.
However, he feels that the recent increase in the amount of stock on the market is calming buyer competition. “I would say that the market here is becoming more sensible.”
In Hackney homes sell for an average 103.4 per cent of asking price, meaning buyers need to find an extra £18,500 to buy a home.
Matt Cobb, director of Hatton Real Estate, sells new-build homes from Shoreditch to Dalston. The typical price of a two-bedroom flat in this area is between £550,000 and £600,000 and buyers tend to be young couples with jobs in the City. But he says new-build homes are tending to sell at their asking price.
When it comes to period homes, however, Lewis McKale, a partner at Davey Stone, based in Shoreditch and Broadway Market, says a shortage of stock is forcing buyers to compete. “Normally we will have an open day on a Saturday and on a Monday we have 10 offers go through,” he said.
His firm’s recent sales include a two- bedroom flat in Queensbridge Road, Hackney, which was put on the market for what McKale felt was a fairly bullish £450,000. It sold for £500,000. And two-bedroom houses in Jesus Green, near Columbia Road flower market, are now selling for £1million-plus - a year ago they could be secured for £800,000.
Other boroughs where average selling prices exceed average asking prices include Bexley, by £1,137; Greenwich (£1,196); Hounslow (£973); Kensington and Chelsea (£2,570); Lewisham (£7,346); Tower Hamlets (£4,797), and Wandsworth (£3,421).
Get on board: boroughs where buyers can expect the biggest cash discounts include Camden, where homes typically sell at £22,477 below their original asking price. Image: Alamy
The London boroughs were buyers can talk the price down
Boroughs where buyers can expect the biggest cash discounts include Camden, where homes typically sell at £22,477 below asking price. In Westminster a £22,000 discount is typical, and buyers in Richmond can expect to shave almost £13,000 off average asking prices.
Hampton’s Johnny Morris says: “Demand has softened. A lot of the money which goes into these areas has been driven by investors trying to protect their wealth. Now the world economy is picking up, there are more choices.”
Beyond prime central London, in areas more dependent on the UK market, prices are also flailing. “People cannot necessarily get the mortgages they need in areas where prices have risen very strongly,” adds Morris.
“What we are seeing is the top of the market running out of steam, and the bottom of the market starting to grow. Markets which are seen as affordable are getting tons and tons of interest.”
Vivienne Harris, managing director of Heathgate estate agents in Hampstead, said that Camden’s market is becoming increasingly stratified. Less expensive homes - which in this upmarket area means properties under £2million - are still selling strongly. “With a lack of supply many properties are going to sealed bids,” she said. “The achieved prices are anything from five to 10 per cent over and above the asking prices.”
Discounts of up to five per cent are more likely to be found on the more expensive homes, which can amount to hundreds of thousands of pounds. “From £2million to £5million there is movement. Over £5million the market is incredibly slow.”