The TBS team have negotiated deals this year ranging from a very special country cottage at £800,000, a pied-a-terre in Spitalfields and a house in Knightsbridge through to a large residential estate in excess of £20m.
But 2017 has been about off market deals–in excess of 70% of our country purchases (up from 50% in 2016) have not been publicly available. The reason has been a conspicuous shortage of stock in all price brackets and throughout all regions and while first impressions in London suggest a good amount of stock, a lot is ambitiously priced and seeking those with stand-out value has proved challenging.
Noticeable this year has been in increase in international clients buying at the very top of the market (upwards of £10m) including ongoing interest from China, renewed interest from and, to a lesser extent, Russia. Both have been driven by the weakness of the pound and global instability. International buyers are more sensitive about Brexit in London than the country, although a number still wish to maintain a base in the capital.
With prices, vendors still need to absorb the impact of either Stamp Duty and wider economic concerns. In London, there are signs that this is changing and we’ve negotiated deals well below unrealistic asking prices. The country market is still catching on, although there are signs that the Home Counties are digesting this new reality.
The exceptions to all these rules are the best-in-class properties. Where they have been sensibly priced, we’ve often seen competitive bidding. In some of our country house transactions, this has then led to prices being pushed up by 30%. This underlines a powerful flight to quality and we anticipate this will set the tone for 2018.
Looking forward to next year, we believe lack of supply will continue but we hope that the nature of the progressing Brexit negotiations will give clarity allowing people to make decisions with regard to their property purchase which will feed through to the market in general. We expect that price sensitivity that we’re beginning to see in London and the Home Counties will have filtered out to the wider shires by the third quarter.