High interest rates and a lack of confidence meant sellers in the mainstream market had to work harder to find a buyer last year than they did in previous years. Fewer homes were sold before being advertised on the property portals, with the proportion of all homes in Great Britain sold off-market dropping from the five-year high of 9.6% recorded in 2022 to 7.4% in 2023.
Yet it's a different story across the prime markets, as vendors have increasingly been opting to sell their homes away from the glare of publicity. Last year, the proportion of £1m-plus homes that changed hands without being advertised publicly rose to 33%.
This is the highest level since we started recording the data in 2007 and surpasses the previous record of 31% seen in 2017, which coincided with the peak of the prime market across much of London and the South East of England.
There are various reasons why owners choose an off-market sales strategy, with discretion and privacy traditionally high on the list. Nevertheless, off-market sales started soaring in popularity during Covid for two key reasons: first, because sellers wanted greater control over the flow of people coming into their homes during the height of the pandemic; and, second, because houses outside London were selling so quickly during the race for space that there was no need to advertise them widely.
However, in contrast to the factors behind the increase in off-market sales during Covid, the main motivations behind them now are likely to be to test a property’s true worth and to ascertain buyers’ reception to it in a slow property market. Keeping off the property portals also means owners can avoid publicising any price reductions or the length of time the home has been on the market.
For homes that cost £2m and above, off-market sales are now the norm. Over half (51%) of £2m-£5m properties changed hands without any publicity last year, while the proportion of off-market sales rose to 54% for homes costing £5m and over. Owners of these high-value properties tend to value privacy; also, the pool of buyers for these homes tends to be small anyway.
With house prices flat or falling in most markets last year, more sellers chose to combine an off-market strategy with a traditional approach to marketing – namely advertising on property portals and on estate agents’ websites and in their windows. On the one hand, one in five sellers of £1m-plus properties that lost their buyer subsequently chose to pursue an off-market strategy when finding a new one.
On the other hand, almost a third (30%) of £1m-plus homeowners who started out selling off-market and failed to agree a sale privately subsequently advertised their home publicly – after an average of 62 days – in order to increase the pool of potential buyers.
