Market Insights January 2024
Please find below our first Market Insights of 2024, outlining the key themes we’ve seen emerging in the prime central London property market this year.
As always, the team and I would be delighted to discuss any property search, acquisition or property management requirements you may have.
Jo Eccles & The Eccord Team
Founder & Managing Director, Eccord
+44 (0) 20 7244 4482
New Year opens with stronger activity
Since the start of January, buyer sentiment has noticeably strengthened and we have client search start dates already confirmed for late Q1 and Q2 of this year. This level of forward planning and commitment was absent from the market last year.
While prime and super prime searches dominated 2023, with mortgage rates continuing to ease, we are seeing the return of market activity in the £3 - £5m range and expect demand in this price bracket to strengthen from last year.
Alongside properties that were previously priced too high – which are now coming back onto the market with 5 – 10% price reductions – we’re also seeing an increase in supply of new properties to the market. The number of sellers listing their property for sale on Rightmove was up 26% on Boxing Day, in comparison to last year, and the number of buyers contacting estate agents via the portal was also 17% higher.
Whilst we expect the proportion of off market sales to be less this year versus last year, buyers are still very mindful that off market properties will always be a feature of the prime central London marketplace and are not to be overlooked.
We recently secured the above turnkey family home in St Johns Wood for a private equity client who, before appointing us, had thoroughly searched the market themselves and identified a house they liked. However, they wanted the confidence of knowing the market had been exhaustively considered. Their private banker and mortgage broker independently recommended us to help them achieve that.
Within our first round of viewings, we gained our clients access to six off market houses which they were unaware of, putting the property they had been originally considering into context. It shaped a new direction for their search and we subsequently acquired this off market stunning home which has truly exceeded their original expectations.
£50m of property completions in January
Our search and acquisition team has completed on just under £50 million of property transactions this month, including a rare off market home for local clients.
Having helped them narrow down their search to handful of roads and houses which met their criteria, we meticulously managed the relationships with the selling agents to ensure the narrative surrounding our clients was impeccably managed. Therefore, when the owners of one particular house discreetly indicated they may sell, we were the only buyer to be notified on a highly confidential basis.
We conducted a strictly one-off viewing and completed the purchase with no other buyer or buying agent aware of the sale taking place.
For Eccord, completion is about more than simply handing over the keys. After care has always been an integral part of our service and we are as passionate about managing and maintaining homes, as we are about finding and acquiring them.
Whilst all of our buying clients benefit from our home management team as part of our search and acquisition service – and 90% of them choose to retain it beyond their purchase – we formally launched our Home Management service last year as a standalone service option. This has been welcomed with demand ranging from probate solicitors and absent home owners requiring regular inspections of vacant homes, to home owners wanting access to our network of trusted contractors and peace of mind that their property is professionally maintained.
Pricing is key as the discount gap narrows
We discussed earlier this month with the Financial Times that the discount gap for on market properties is narrowing.
The key to buying well this year will be successfully negotiating with sellers, who are accepting the need to be more realistic on pricing but who need to be approached with tact. Large discounts are not being seen across the board in the volumes that some buyers had hoped for or expected, and we don’t expect to see a significant wave of distressed sellers.
There are opportunities to be found, however. We secured the above property in Knightsbridge for a banker client just before Christmas where the sales strategy had been poorly handled. Led by the seller, the property had been marketed by nearly 10 estate agents, having first come to the market above £20 million, then reduced to £15.75m. After complex negotiations, we secured a discount of more than 30% by lining up our client to facilitate a 48 hour exchange, which we executed on the last working day before Christmas.
This is a perfect example of a seller being overly ambitious on pricing at the start, opening themselves up to a detrimental sales result in the long run, to the benefit of the buyer.
Landlords prioritise long term tenant quality ahead of short term yields
The supply shortage of rental properties has eased over the past months which is welcome news to tenants. We are still achieving an average of 7% rent increases across our portfolio when re-letting properties for our landlords, but we have seen a shift in landlord priorities.
As mortgage rates ease, some landlords who were planning to exit the market are now reconsidering their options. Of those remaining, their primary concern is securing a hassle-free tenancy, and many landlords are coming to us scarred by their experiences elsewhere. A short term focus on commission by some lettings negotiators, at the detriment of long term quality of tenant, is resulting in the appointment of unsuitable tenants and negative (and expensive) landlord experience.
The success of any tenancy depends on the level of care and expertise that goes into matching each individual landlord and their property with the right tenant. For example, we have just let a charming and cherished house in the heart of Chelsea which was our American client’s home before he relocated away from London. On recommendation from his solicitor, he appointed our rental and property management team and we worked closely with him to understand the house, oversee significant works to the electrics and other upgrades to ensure the property met rental standards, and carefully vetted and personally met every potential tenant to ensure the best profile fit to match the property.
The private equity couple we have rented the house to fell in love with it instantly and our landlord is completely reassured that they will respect and enjoy the house as much as he did during the many years he lived there.
Thank you to Taylor Howes for providing us with one of the above beautiful images.
For 17 years, Eccord has been trusted by private clients, family offices and international companies to provide residential property search, acquisition, relocation and property management services.
Our award-winning team has since successfully acquired over 400 properties and manages a portfolio of more than 150 rental properties and private homes.
T: +44 (0)20 7244 4485