Selling off-market has become an increasingly established sales strategy over the last five years. Once the sale method of choice for sellers of prime homes wanting to make a discreet sale away from the marketing glare, today, its appeal has become widespread.
During the first five months of this year a record 23% of London homes changed hands without being openly marketed, a rise from 20% in 2021. In prime country markets an even higher proportion of homes are now sold discreetly; 24% compared with London’s 23%.
Nationally, around one in ten homes sold this year found a buyer without being publicly marketed, the highest level since 2015. A record 59% of these homes were sold outside the capital.
This extension into both country and non-prime markets has primarily been driven by a lack of stock and a seller’s ability to secure a higher price in a competitive market, rather than privacy concerns.
In the five years running up to the start of the pandemic, the average home sold off-market achieved £1.2m. However, the growth in off-market transactions has increasingly been driven by lower-priced properties. So far this year, the average discreetly marketed home changed hands for £858,000, down from £979,000 in 2021.
With off-market sellers achieving record prices, it's unsurprising that vendors are turning to this strategy. Buyers, who have been battling a stock shortage amongst stiff competition, have been prepared to pay a premium to seal a deal before a home is advertised more widely, including online.
So far this year, homes marketed discreetly have achieved a higher proportion of their asking price than their counterparts which were more widely marketed. The average off-market home sold in 2022 achieved 99.5% of its asking price, surpassing the 2014 record of 98.0% which was set in a strong prime central London market. Meanwhile, similar homes marketed to a wider audience have achieved an average 99.1% of their initial asking price so far this year, also a record.
These record prices are being achieved on the back of increasingly shorter marketing periods. The average home sold away from the glare of the open market took an average of 42 days to find a buyer, compared to 65 days for a similar prime home that didn’t start life off-market. Meanwhile, the average time to sell across the whole of the market in May stood at 26 days, up from 24 days in May 2021. The longer time taken to sell an off-market home reflects the increased length of time it takes to find buyers for prime homes.
Typically, homes spend two to four weeks being quietly marketed, before either a buyer is found, or it is launched on the open market to reach a wider audience. With more off-market properties securing a sale quickly, fewer homes are then being advertised more widely later down the road. Just over a quarter (26%) of homes marketed discreetly came onto the open market this year, down from 38% pre-pandemic in 2019.
It seems likely however that we are reaching peak off-market sales levels. With the number of homes on the market forecast to rise later in the year, buyers are likely to be more cautious about paying a premium in the face of an increasing amount of choice. If this happens, off-market sales may retreat back into their prime heartlands.
