Cash buyers and gazumping back to London property market, is this for real?
Editorial
No its not estate agents trying to save their greedy behinds from bankruptcy by peddling out spurious stories that the "property market" is now booming again, according to the FT gazumping has returned to the "top of London's property market".
Only recently the press was full of stories about the residential sales dropping by as much as 30 per cent in London, but now according to analysts we have the nadir and opportunistic and cash rich buyers are flooding the market.
The unthinkable is again a reality with "sealed bids" now back in fashion with the largest bid courting favour with agents, and a staggering statistic by Knight Frank that 45% of sales over £5 million in London was in cash.
With cash buyers now accounting for nearly half of sales in property in London according to recent statistics in central London one analysts remarked that "there is no question that purely in terms of sales activity the central London market is unrecognisable from where it was six months ago" - FT.
Moreover if this is now the beginning of the end of this crisis that has engulfed the residential sales market in London have we learnt any lessons? Are banks now going to start loosening the noose on lending to first time buyers? Doubtful. Will the engine behind much of the prosperity in the UK return, namely another boom in property maybe?
But who are these cash buyers scooping properties for £5 million in central London in cash? They are not the average Joe that lives in Hainault. These dudes are the multi-millionaire whales who carry this type of cash as pocket money; £5 million cash is negligible for them.
So again, serious newspapers like the FT need to put the reports of gazumping and cash buyers in context. If 17 out of 18 buyers chasing that town house in Knightsbridge are outbidding each other this does not mean the property market has found its feet. Taking an educated guess the 17 are property Russian's or Arabs and are the vultures circling the prey. We have no recovery; get that one into your heads.
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