Secret sales: post-pandemic property boom generated £30 billion in off-market sales

A huge surge in off-sales transactions last year shows how the secret property market is no longer the preserve of high net worth individuals
The UK’s secret property market generated £30 billion worth of sales last year, according to experts
Graham Hussey
Ella Jessel21 October 2022

The UK’s secret property market generated £30 billion worth of sales last year amid the post-pandemic boom — the highest figure in well over a decade.

Previously, buying off-market was the preserve of wealthy house-hunters, but amid the UK’s severe supply shortage thousands turned to buyers’ agents to try and hunt down a new home.

In 2021, an estimated 98,235 homes were sold off-market, a 51 per cent increase on the previous year and the third largest annual total of off-market transactions in the last decade, according to research by real estate fund Alliance Fund.

With the average off-market property selling for £314,312, this means Britain’s secret housing market contributed almost £30.9bn in market value. To get this value, Alliance Fund, applied the estimated off-market sales percentage for 2021 (9%) to the Land Registry’s sales volume data.

According to Alliance Fund’s CEO Iain Crawford, the perception still exists that secret sales only take place at the top end of the market but this is no longer the case, with off-market transactions happening in many areas with “overwhelming levels of buyer demand.”

He added: “In these instances, agents will have a long waiting list of prospective buyers who are desperate to live within a certain postcode or development, so they needn’t waste the money required to market a home on the open market.”

The huge surge in off-sale market sales comes after a period of decline. Last year was the first annual increase in the number of off-market transactions since 2017, the data shows.

However according to Crawford, the post-pandemic property boom has “turbocharged” the practice, with buyers “falling over themselves to secure what little for sale stock was available while mortgage rates remained very favourable.”

In prime London, off-market sales are more popular than ever according to Jamie Hope, managing director of sales at Kensington agency Maskells. Hope said that every £10 million-plus home the company had sold in the past two years had been conducted outside the open market.

While not unusual for high-value homes, Hope said the practice had increased further over the past two years. “In this day and age of “online footprint”, our clients are often household names, as are the buyers we work with. These discerning individuals value their privacy and through our contacts, we are easily able to transact properties without advertising”, he added.

The agent said he was currently selling a 6,000 sq ft house in Kensington and Chelsea with an asking price of nearly £20m. A previous agent had advised the seller to put the house on the open market, but there was no interest so Maskells reversed the strategy, “creating exclusivity through an off market campaign” and leading to an offer.

So far in 2022 alone, it’s estimated that over 35,000 homes have already been sold off-market, equating to just shy of £12bn based on current market values.

Earlier this year, research by Hamptons revealed that during the first five months of this year a record 23 per cent of London homes changed hands without being openly marketed, a rise from 20 per cent in 2021.

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