Aspiring buyers are vying for the best family homes in good locations. But many won’t even get the chance to view them as properties are being sold even before they hit the market.
More than 37,000 homes were sold ‘off-market’ in the first three months of this year – the highest quarterly number recorded in any first quarter since estate agent Hamptons started to keep records in 2007.
An off-market sale is one where the property is not marketed publicly – with the sale arranged by a buying agent and clients looking to purchase without having to participate in a bidding frenzy.
Behind closed doors: Traditionally, selling off-market has been the preserve of the rich and famous
Traditionally, selling off-market has been the preserve of the rich and famous. But this year, average family homes in more affordable price brackets are being sold in this way – not just exclusive mansions or penthouses.
It means that unless purchasers have their ear to the ground – or hire a buying agent tapped into the market – they could miss out on some of the most in-demand properties.
Jo Eccles is founder of property advisory service Eccord. She says: ‘Three years ago, only about seven per cent of sales we oversaw were off-market and it was usually where discretion was required. This year, 30 per cent are off-market.’ Eccles, who oversees sales in London, says growth is being driven by good quality family homes in residential areas such as Hampstead, St John’s Wood, Notting Hill, Richmond and Chiswick.
Sellers go off-market for two reasons. One is to protect their privacy. Alexander Millett, founder of a Central London estate agency, says: ‘Often, if sellers are high profile, they don’t want pictures of their home all over the internet. And sometimes, sellers just don’t want their neighbours virtually snooping around their house.’
The second reason is to test an ‘ambitious’ price to see if buyers bite. When a property is listed on the open market, property portals such as Rightmove give it a date stamp, registering when it came on the market and the original asking price.
If the property does not sell straightaway or the seller has to reduce the price, buyers can see this on the listing and it can undermine the seller’s negotiating position. But, when someone sells off-market, there is no record of the original asking price or how long it has been on the market. If it doesn’t sell off-market, they can still go to the open market – with potential buyers none the wiser.
Agents say that the property market is currently so hot that homeowners who go off-market are more likely than ever to be successful. ‘Lots of sellers are going off-market just to test the waters and then finding their property is snapped up immediately,’ says Millett.
Patrick McCutcheon is head of residential sales at estate agent Dacre, Son & Hartley, which sells properties across Yorkshire. He says that off-market sales usually focus on the most expensive properties, but in the past year they have become common among those selling for under £1million.
‘Sellers of desirable family homes are finding they don’t need to use the open market,’ he says. ‘They may get an even better price this way because purchasers are given the opportunity to buy without competition.’ Buyers may even pay a premium because of the exclusivity they are offered.
McCutcheon adds that many sellers have not wanted to have lots of potential buyers looking around their home due to Covid fears, so off-market sales have proven a good solution.
The homes most in demand across Yorkshire, he says, are 1920s family homes built in stone by textile barons. ‘They are honest Yorkshire homes, with elegant proportions, nice facades and deep Yorkshire roots,’ he adds.
McCutcheon has also noticed a surge in buyers from London and the South East looking to move to Yorkshire.
‘They normally make up around 18 per cent of buyers – but now it’s nearly a quarter,’ he says. ‘People want a better lifestyle and are happy to catch the early morning train to London’s King’s Cross on a Monday and then come home on a Wednesday or Thursday.’ Good family homes are also driving the growth in off-market sales in Oxfordshire, Gloucestershire and the West Country.
Jess Simpson, who specialises in purchasing country property, says: ‘So many people want a done-up Georgian rectory on the edge of a picturesque Cotswolds village, with big gardens and perhaps a couple of outbuildings.’
‘We have not seen an off-market like this since before the crash of 2008,’ she says. ‘But this time it feels different – people are buying long term.’
While off-market sales are soaring among houses, flats are being left behind.
‘With two-bedroom flats in the city, it’s a different story,’ says Eccles.
‘Covid has created a wealth divide, which we are seeing played out in the property market. ‘Sales are being driven by more affluent people who want outdoor space, a good quality of life and a nice family home.’
Stuart Flint sold his family home in South Warwickshire off market last year and says there were big advantages.
He says: ‘The process is more orderly because there is a smaller number of people involved.
‘Selling off-market means dealing with focused, well-funded buyers who have their finances in place. The process is smoother and less stressful.’ Flint is head of property agency Fisher German and is therefore tapped into the market. However, he believes that others without his experience can do the same.
‘If you have a home you know has market appeal, you can put out some feelers to buying agents who operate in your area. They are always keen to hear of properties before they go on the market.’
He says the best agents can be found by looking on platforms such as Instagram to see who is the most active.
But he warns that sellers must be savvy because agents are working on behalf of buyers. ‘You have to be very cautious to make sure you have the correct target price,’ he says.
Flint points out that this route can work out cheaper for some people in certain markets, but for most sellers going to the open market is still the best option.
A rise in the number of property agents is also driving off-market sales. They get to know an area well and may have access to information about when homeowners could be looking to sell before they list on the open market.
Flint says agents have ‘spread their wings’ in the last year. ‘There have always been agents in London, the Home Counties and the Cotswolds,’ he says.
‘But now we’re seeing them west of the M5 – in Worcestershire, Herefordshire and Wales – and also breaking into Northamptonshire, Rutland and Leicestershire.’
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