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Fewer buyers and falling prices halt house boom
Mira Bar-Hillel and Anna Davis, Evening Standard30.11.07
Frenzied "open house" viewings and sealed bid auctions that marked the peak of the London property boom have all but disappeared.
Agents say the days when scores of desperate buyers would fight it out with offers well above the asking price are over. Figures from the Bank of England yesterday showed a sharp fall in the number of buyers after a collapse in confidence, rising borrowing costs and the credit crunch hit the availability of mortgages. Asking prices are down about five per cent on their summer peak and buyers have become more cautious.
James French of agents Douglas & Gordon said: "Six months ago holding an open house was a good way to allow large numbers of buyers to view a house at the same time. It also gave buyers an idea of how popular the property was. We would then often go for the sealed bids process and the winning bid was often well above the asking price.
"Today, with 30 per cent fewer buyers, the open house approach won't work. Buyers are offered a selection of properties to view and don't have to rush to see one property.
"Equally, any offer at the asking price is likely to be successful.
"I would advise sellers who cannot find a buyer to reduce the price but not take the house off the market." Phil Spencer, presenter of Channel 4's Location, Location, Location, said: "The market is stabilising and calming down again.
"Back in the summer we were hearing stories of sealed bids between eight or nine people bidding for exceptional properties at the top end of the market.
"Now it's back to around two or three and it's only the really desirable properties that are going to competitive or sealed bids."
Andrew Weir of Foxtons said: "We do get the odd sealed bid but they are not happening as much because the market has changed.
"I would tell people who want to sell, wait until after Christmas but if you want to buy you should be out there now. There is a window of opportunity because there is less competition.
"If the market has dropped by 10 per cent, you could sell your £500,000 home for £450,000, but then if you buy a £1million house for £900,000 you will pick up money. The clever money is trading up.
"First-time buyers are also using the softening of the market to get on the property ladder before it recovers, which I believe will be in spring."
Tim des Forges of W A Ellis said: "There is not the volume of people looking at the moment as there was six months ago. People have been used to the boom of the last 18 months and are obviously more uncertain. The agent has to work a lot harder now."
He added: "Unmodernised flats will get more interest from buyers and developers because people can put their mark on them."
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