The recent property boom has seen an emergence of so-called ‘power buyers,’ who use their chain-free status to muscle their competition out of the running.
Rightmove describes these ‘power buyers’ as those who have already sold their own home, are cash buyers, or are first-time buyers with a mortgage agreed in principle.
They appear more attractive to sellers than those yet to find a buyer for their own home.
![The average time to bag a buyer is currently 37 days compared to 65 at the start of the year.](https://i.dailymail.co.uk/1s/2021/10/19/07/49174767-10092175-The_average_time_to_bag_a_buyer_is_currently_37_days_compared_to-a-1_1634626113153.jpg)
The average time to bag a buyer is currently 37 days compared to 65 at the start of the year.
Typically a ‘power buyer’ might refer to someone with deep pockets – the type that can win any bidding war or gazump any deal.
But cash isn’t necessarily king in today’s red-hot market in which stock levels are at record lows.
There are on average just 16 available properties per estate agent, according to Rightmove – the lowest availability it has ever recorded.
Sellers are spoilt for choice at the moment. The average time to bag a buyer is currently 37 days compared to 65 at the start of the year.
![There are on average just 16 available properties per estate agent, according to Rightmove.](https://i.dailymail.co.uk/1s/2021/10/19/07/49174763-10092175-There_are_on_average_just_16_available_properties_per_estate_age-a-2_1634626113181.jpg)
There are on average just 16 available properties per estate agent, according to Rightmove.
David Westgate, group chief executive of Andrews Property Group says: ‘We are still experiencing market conditions where demand outstrips supply, and there are more buyers than sellers.
‘Demand is particularly strong for homes with a decent amount of outside space, and in more rural areas, with more of us working from home and seeking a better quality of life.
‘Where demand is high, a desirable property coming onto the market will secure multiple offers, and the seller has to decide which offer to take.
‘It could be simple, the highest offer wins. But if that offer comes with strings attached, a lower offer that is unlikely to fall through may be more appealing.’
What exactly is a ‘power buyer?’
A ‘power buyer’ is someone who is well-prepared, can move quickly and has their finances in order, according to Henry Pryor, a professional buying agent.
‘You need to appear to the estate agent to be ready, willing and able. Someone whom they can trust will be easy to do a deal with.
‘Ideally you would be a cash buyer, but if not you certainly need a mortgage agreement in principle.
‘You also need to have sold your old home or have it under offer or close to exchange.’
A more radical step, according to Pryor, is to sell up and move into rented accommodation before offering on another property.
‘Being in rented accommodation suggests that you will be keen to buy your own home and ‘chain free’ as agents call it – without a property to sell.’
Why is it so important to be one?
Despite its advantages, the appeal of a ‘power buyer’ will largely depend on where they live and the type of property they are after.
‘In some parts of the country and at some price points you will be competing with between 200 and 300 other buyers, 40 per cent of whom will be buying with 100 per cent cash,’ says Pryor.
‘Buyers outnumber sellers by a factor of ten and sometimes by much more, so getting to the top of the queue is essential.
‘We are missing perhaps as much as 30 per cent of the usual number of listings but the number of buyers is higher than usual.’
Beware the property chain
A long property chain is an estate agent’s worst nightmare because there is a much greater chance of something going wrong.
Many property transactions are dependent on a chain of buyers and sellers, all relying on each other to ensure they can complete on their own purchase.
If any transaction in the chain is delayed or collapses, everyone in the chain is impacted.
Property transactions are also taking far longer to complete than they were prior to the pandemic.
Previously it was taking around three months from an offer being accepted to a sale completing, now Rightmove says the average has risen to four months.
Miles Shipside, director and housing market analyst at Rightmove said: ‘The worst thing is choosing the wrong buyer because the legal process takes so long to complete.
‘When there is a chain of buyers and sellers involved, a third of deals end up falling through, and in some longer chains, when six property sales are involved, roughly 50 per cent tend to fall through.
‘So in today’s market where there is so little stock available, it’s really about not only persuading a seller that you’re not going to fall through, but also persuading a seller that you can act quickly.’
Should you sell before you look to buy?
Unless you’re a first-time buyer or have lots of cash at your disposal, it is likely that you’ll need to sell your current property before you can buy the next one.
Offering on properties prior to putting your own home on the market will likely only end in disappointment.
Even if your property is for sale, if you don’t have a buyer, seller’s and their estate agent’s are unlikely to take your offer seriously.
Accepting an offer on your own property first will put you in a much stronger position, although those who want to go one step further might prefer to sell up before making an offer on the next one.
This will require you to find a stopgap in between, perhaps with friends or relatives who are willing to help you out.
![Transactions are taking 126 days from the offer being accepted to completing](https://i.dailymail.co.uk/1s/2021/10/19/07/49174769-10092175-Transactions_are_taking_126_days_from_the_offer_being_accepted_t-a-3_1634626113438.jpg)
Transactions are taking 126 days from the offer being accepted to completing
Alternatively you can try and find somewhere to rent for three to six months, although the hassle, the cost and time wasted in selling up, renting and then buying may be too much for some to bear.
Furthermore, for those looking to port their existing mortgage to their new home, this may not be the best tactic.
Most lenders only allow for a two-to-three-month period between selling and buying a property, in which you can bring your mortgage back to life without incurring an early repayment charge.
‘Estate agents are recommending people go on the market and sell subject to contract, they’re generally not recommending that they actually sell and move into rented accommodation first,’ said Shipside.
‘But finding suitable rental accommodation can be quite hard and you are typically going to be tying yourself in for a minimum six month minimum contract under an assured shorthold tenancy.
‘It will require a lot of commitment and cost, although anyone who actually does this could probably be considered a ‘super power buyer.”’