Rob Jones of Property Investments UK looks at how important the off-market property sector is to investors and at the pros and cons of buying off-market.
You might have heard of off-market property, but do you know what a massive part of the market it is?
Research by top estate agent Hamptons says that the number of properties sold off-market has increased substantially in recent years. Their latest stats suggest around 20% of all properties sold in London were sold off-market. In Great Britain overall 9% of all properties sold were sold off-market …. less, but still a significant number.
The latest official statistics show that there were around 1.2 million UK residential property transactions in the last financial year (2022-23).
So, a very simple estimate suggests that you could be missing out on a massive 108,000 buying opportunities nationally this year alone if you don’t consider off-market properties. The risk of missing out is even higher if you are looking to buy in London.
And these off-market properties could be some of the best investment opportunities available to you as an investor so let’s look at exactly why this is..
First, exactly what is off-market property?
In a way, it doesn’t make sense, does it? Off-market property refers to property that isn’t for sale …. and yet you can still buy it!
Off-market property is quite simply property that is not being promoted for sale on the open market in the conventional way.
Search as hard as you like. You won’t find off-market property advertised in any estate agent’s window. You won’t find it listed on a property portal like Rightmove or Zoopla. You won’t even find it in any auction catalogue.
But off-market property is still out there and available to buy …. if you know where to find it.
The advantages of buying off-market property
A big advantage of buying off-market property is that you can shortcut the whole frustrating, time-consuming merry-go-round of buying the conventional way. It can be a whole lot quicker and easier.
With a conventional purchase, you have to wait while a property is marketed and while prospective buyers view it, perhaps for weeks. You have to wait while offers are made (and perhaps rejected) and counteroffers and negotiations are conducted amongst many parties.
Then there can be issues with gazumping or maybe gazundering.
It can take 60 days to agree on a purchase with the conventional sales process. And in as many as 33% of cases the purchase falls through and the whole process has to start again from day one.
By and large, this doesn’t happen when you buy off-market. You find a property that suits your investment criteria, agree on a price and the sale is then ready to go through.
Buying off-market property may also be cheaper. You shouldn’t get involved in a bidding war with many other prospective buyers. Perhaps with people who offer much more than a property is worth just to secure it at any cost.
Often, sellers selling off-market want a quick sale. Or they want to save estate agency or auction fees. Rather than waiting months (or even years) for the highest possible offer to come in, they’ll take a lower price in exchange for getting their cash ASAP. That price could even be below market value.
By buying off-market you can get access to thousands more properties than you otherwise would, including properties that will never be offered on the open market. And potentially buy them at very good prices and without a lot of hassle.
This is why I call off-market properties hidden gems!
Why do people sell their property off-market?
It’s worth bearing in mind for a moment why people sell their property off-market. In simple terms, this is because it can offer them a quicker sale with less hassle too.
In some cases, they might not need to offer their property on the market as they know it is readily saleable to serious buyers off-market.
Another reason is confidentiality. An owner might not want everybody to know they are selling their property. And not want a record of it being offered for sale being made public, for everybody to see.
Off-market selling is particularly popular with celebs and very wealthy people for this very reason. But off-market is not just for celebs. and not just for luxury properties. Sellers can be ordinary homeowners, landlords, investors, developers and public bodies selling very ordinary properties.
There are some important things to be aware of when buying off-market
When buying off-market there are both pros and cons to consider.
Sometimes sellers might not be all that committed to selling. They may be testing the market, so to speak. So it’s important to source off-market from a reliable source who can ensure sellers are motivated to sell.
There’s a small chance that some sellers could be scammers. That they might not even own the property they are offering for sale. Again, it’s important to source from a reliable source who can ensure sellers are genuine.
It may be hard to establish an accurate value for properties offered off-market. Since the property isn’t offered on the open market, there may be no offers or counter offers to help establish its value.
Potentially the seller could be asking more than the property is worth. That works both ways, however – they could be asking less.
So it’s important to take good advice – and do your research – so you can feel confident in the property as well as the price you are paying.
By the way, in most other respects buying an off-market property is just the same as any other type of purchase. You can view the property if you want to. The legal side of conveyancing is the same. You can get a mortgage on an off-market purchase in just the same way.
How to find off-market property to buy
So far so good. But as you might have spotted there is a snag. Because off-market property can be hard to find. As I said, estate agents and portals don’t advertise this type of property. Nor do most companies who promote new build investment property. (If they did, it wouldn’t be off-market property.)
In theory, you could find off-market property by knocking on doors, dropping leaflets and writing letters. And just asking if the owner is interested in selling a particular property you would like to buy. Or you could run an ad. in the local press or on social media. These methods may work, but they are time-consuming and have no guarantee of success.
A better way is to use an intermediary or sourcing agent who specialises in the off-market property market.
This is something we at Property Investments UK do. And I think we do particularly well. Our service is all about offering you the UK’s best, high-yielding, off-market investment properties.
We always have a wide range of investment opportunities to buy immediately. And regular updates on new properties as soon as they become available.
We have exclusive off-market deals that are not offered anywhere else.
We can give you access to a wide range of off-market investment properties, with an average 8%+ annual yield. (That beats the UK’s average of 3-5% hands down.)
We offer a completely free, personalised and in-person service where, after an initial phone conversation, one of our consultants will work to find you high-performing off-market properties to help grow your portfolio.
We'll work with you to understand your goals, budget and preferences, and provide personalised advice on the best properties and markets to invest in. We'll also help you navigate the finance process and the ongoing purchase process.
So, if you are looking for an investment property and have been disappointed by what is on offer on the market then I strongly recommend that you consider buying off-market property too. You could just find that the very opportunity you have been looking for is available off-market, without a lot of hassle and at an attractive price too.