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Market Insight

Off-market sales
Spring 2024

Advertising has always been seen as essential to selling a home. However the popularity of marketing publicly, rather than behind closed doors is often determined by the state of the housing market at that time. Our research shows that, in 2023, one in three £1m-plus homes were sold ‘off-market’, that is without public advertising. This was a return to the levels seen in the record year of 2017, when the prime markets in London and South East were close to their peak.

In the £2m-plus tier, the off-market transaction may be close to becoming the norm, with 51% of such homes changing hands in this low-key fashion in 2023. Among properties valued at £5m or more, it was 54%. With prices sensitive to economic swings last year, the off-market approach allowed sellers the opportunity to test the waters.

Owners of higher-priced homes tend to value the privacy of the off-market method of selling which is based on the effective targeting of the smaller pool of prospective purchasers for expensive real estate.

" With the market picking up pace in 2024, the share of homes off-market might fall"

A property that is sold off-market cannot be viewed on any of the portals like Rightmove, OntheMarket, or Zoopla. Instead, the estate agency approaches suitable individuals in its network. These would-be buyers have registered an interest in a specific type of property, and are most likely to make a serious offer.

Off-market is all about discretion and exclusivity, rather than visibility, which is why it holds such appeal in the prime sector. For some sellers, it’s also a security requirement, limiting the availability of floorplans and internal photography publicly.

But it does not work in every type of transaction - only 7.4% of all homes were sold off-market in 2023. In the sub-£1m market, just 6% of homes found a buyer this way. Higher interest rates and cost of living increases meant that sellers had to rely on the publicity that the portals can provide, with their millions of regular browsers.

The off-market method is not guaranteed to clinch a deal even for a more expensive property. For example, 19% of £5m-plus homes that were first available off-market, were later advertised. Some 30% of the owners of £1m-plus homes who started out off-market switched to more public advertising - after an average of 62 days. They had been unable to agree a sale and so needed to widen the pool of potential buyers.

Our research highlights a new off-market trend that emerged amid the challenging conditions of 2023. If a deal to buy a home advertised on a portal falls through, it is becoming more popular for the seller to subsequently switch to the off-market approach. Often, the aim is to locate a committed buyer who can secure finance without that home lingering on a portal. As many as one-in-five sellers of £1m-plus properties took this route in 2023.

However, with the market picking up pace in 2024, the share of homes sold off-market could fall. Indeed, while a less public route to advertising a home will remain a popular choice for many prime sellers, a more stable economic backdrop should lessen the need for vendors to test pricing discreetly.

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