40% of central London new-builds sold with large bulk discounts

A report in the Financial Times lays bare the scale of the housing market downturn in central London - it suggests almost 40 per cent of new-build sales in recent months have been to corporate landlords.

Quoting the construction consultancy Molior, it says some 2,008 new-build homes — or 39 per cent of sales in the second quarter of 2018 — were to Build To Rent landlords who have increasingly looked to ‘fire sales’ to build up their stock. 

Private sales in the same quarter declined by a third to 3,142. 

The FT says discounts to asking prices from 10 to 15 per cent are now “becoming quite normal” with 20 to 30 per cent reductions possible on selected schemes. 

The newspaper quotes Molior as saying such purchases are masking continued drops in individual sales of new apartments, many of which are in central London high-rise schemes approaching completion.

The piece continues saying: “An analyst in the sector, who asked not to be named, said bulk discount sales can create a ‘snowball effect’. “As more of this comes through, it becomes obvious to the rest of the market and triggers further sales among those who had been hoping to ride out [the tough market],” he said.”

BTR purchasers during the quarter include US group Greystar, the housing association L & Q, the fund managers M&G, and Quintain, owned by the private equity investors Lone Star.