The truth at the top end of the country market.

  Hanslips continues to monitor the top end of the property market and since the beginning of the year the resultant statistics make for some enlightening reading.The properties investigated on behalf of clients range in price from £2.5m up to £30m for larger estates. Geographically the properties are concentrated on central southern/south-east England though there are a few included in counties like Warwickshire and Suffolk. The sample study of around 100, all launched since January of this year, constitute both open market and off market properties. Many properties at this top end of the market are never displayed on Primelocation.com.

A staggering 68% of the total sample have failed to sell. 11% are under offer, 12% have sold under the asking price, 5% have been sold at the asking price, and 4% were sold in excess of the original asking price. A large number are seeing their asking price adjusted downwards as we write. (It should be noted that when an estate agent says a property has sold at the asking price, it does beg the question whether that property had to drop the original price to a new asking price to achieve a sale.)

How can this be best explained? The scrapping of HIPs and an overhang of those who wanted to sell but delayed until more favourable conditions returned, as well as renewed confidence that the worst of the recession was over, have all lead to an increase in supply.

On the demand side the better economic news has been off-set by a lack of mortgage finance affecting the whole market, and the recent strengthening of sterling which has reduced the number of foreign buyers mainly relevant to the top end of the market. Don't forget that 70% of buyers for prime central London are foreign, which obviously has a ripple out effect to the countryside.

Added to this concoction is the perennial problem of over-valuing by the estate agent. On its own this factor normally rights itself during the course of year but this year it may serve to exacerbate the mismatch between supply and demand.

The gap between what many sellers hope to achieve and what buyers are prepared to pay has widened. Judging by some of the recent price reductions it is clear that large chunks are being lopped off the price in order to entice buyers. It would appear that the market has run out of steam and come this autumn, if the log jam is to clear, further price slashing must continue.