Patience is of the Essence
Encouraging pipeline as domestic buyers seek outside space
Since lockdown started to ease and property viewings were once again allowed, we have managed to build a pipeline of deals at Nicolas Van Patrick where there wasn’t one before. This is hugely positive and gives us room for cautious optimism – even though our usual buyers from overseas are still not able to travel due to flight restrictions and quarantine, there is a market from serious domestic buyers who need a home. We are particularly busy in the £1m to £2m bracket and for big houses with gardens as people search for more space both inside and out, better equipping them if we have to deal with another lockdown.
We have a good selection of properties for sale and there are some interesting deals to be had, which were not there before. Not only do we have good stock, it is reasonably priced which is always our preference; if property is marketed at ludicrous prices, it doesn’t do anyone any favours. The market is more price-sensitive than it has ever been so vendors need to employ a degree of realism if they are going to enjoy a successful sale.
The buyers we are seeing want to transact which is not always a given, particularly as our market is usually quite discretionary. Knightsbridge is unique compared with many other parts of London which are driven by real need and family buyers. Ours tends to be a more discretionary market, with fewer families and mainly driven by foreign investment. But the cash buyers from Europe, China, America and the Middle East we would normally see are not here. They are conducting virtual tours – we can see there is a lot of curiosity out there as to what is available – but that’s as far as it goes for now.
Domestic buyers who are mindful to purchase have a definite advantage they wouldn’t normally have because the usual competition from overseas buyers with deep pockets and no need for mortgages, is not there. While domestic buyers are more likely to need finance than their overseas counterparts, it is a good time to take on a mortgage as borrowing is incredibly cheap. However, we would advise using the services of a good mortgage broker to iron out any issues that may arise, as borrowing adds a level of uncertainty and greater potential for a deal falling through.
We are finding that patience is of the essence – for both buyers and sellers. Where sellers are flexible and in touch with reality, deals have kept going when they might otherwise have faltered. If you read the tabloids, you may be forgiven for thinking there is a booming housing market (the Express had the front page headline ‘House prices bounce back to hit new high’, although it was referring to asking rather than sale prices). While the suggestion is that sellers can ask for as much as they like, that may be the case in some areas but is not the case around Knightsbridge.
Undoubtedly, the housing market has some wind in its sails and if we get good news about a Covid vaccine, it should make it easier for buyers from overseas to return, as would lifting of quarantine restrictions in those countries. There is also the extra 2 per cent stamp duty for non-doms, which will be introduced in April, to consider. We had expected a busy autumn as buyers from overseas took the plunge before then but now, who knows? If travel restrictions change in the next couple of months, we might have a reasonable autumn, although we remain cautious for the outlook for market as the furlough scheme comes to an end.