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Two-tier market - James Bailey, Henry & James

Selling in a tough market

There has been a lot of talk of a two-tier property market. Mostly this has been in regards to those who are cash buyers - or at least equity rich – and those who are not so fortunate. Cash buyers have been snapping up properties in the best areas while first time buyers and those needing a big mortgage are struggling to finance a house move. However, I would say that we are witnessing another split in the market. Not only are we seeing a two-tier market amongst would-be buyers, we are also seeing a two-tier market amongst sellers.

Those cash rich buyers are extremely picky and are not willing to purchase anything but the best. There is so much competition for the best properties that, as the headlines confirm, prices are actually beginning to rise again. But for those who are trying to sell a house that is compromised – on a busy road, with a tired interior, a third floor walk-up – they are finding it very difficult. If anything, the reports of rising house prices do not tell the whole story. Good properties are achieving near record prices again but bad properties just are not selling at all.

Never has the phrase, “location, location, location” rung so true. We recently took on a flat in Cadogan Gardens which we priced at £1.4 million. It was in a sought-after street, in a well managed building and on the first floor. By the end of the week, we had seven offers at the full asking price. We went to best and final offers and it goes without saying that we achieved significantly more than the asking price.

We have other properties on our books, though, that will be challenging to sell. One beautifully decorated home is on a garden square and on the surface, looks like an ideal home. Once inside, you soon realise the problem. The entire house shudders as the Tube roars directly underneath every couple of minutes. Cash rich buyers, no matter how keen, know that this house is not perfect and even if they were able to live with the rumble of the trains, they would have trouble selling the house themselves in a few years’ time.

If you are thinking of selling your home now, take a cold hard look at it. If it is a flat on the top floor without a lift or on a busy road, there may be little you can do about it. However, if its interior has seen better days, call in the builders. You will have to spend some money updating it if you hope to sell in this market. Similarly, if you have problems with the management of the building, work with your neighbours to resolve the problem or even get in a new management team. Do what you can to eliminate anything that may compromise the sale of your home. You may just find a buyer willing to pay a premium for your home.

James Bailey

James is head of sales at Henry & James. www.henryandjames.co.uk

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