The UK property market is witnessing a slowdown, with property sales dropping to below 30,000 transactions for the first time since May 2020, according to Open Property Group (OPG).
This decline, coupled with longer sale times in some regions, has prompted debate about whether investors should turn to ‘quick buy’ companies for a faster but discounted exit.
How long does it take to sell a property?
On average, UK property sales are taking anywhere from 62 to 80 days, with significant regional variations:
- Wales: 80 days
- London: 78 days
- Scotland: 42 days
This extended timeline, particularly in slower markets like Wales and London, often frustrates investors looking to liquidate assets, prompting some to explore ‘quick buy’ options.
What are ‘quick buy’ companies?
‘Quick buy’ firms, such as Open Property Group, specialise in purchasing properties quickly – often completing sales within weeks, sometimes days. However, these firms typically pay significantly below market value, sometimes as much as 10% to 30% lower than the asking price.
Why are investors using quick buy companies?
According to OPG’s research, these are the main drivers behind sellers opting for quick buy services:
- Need for a quick sale: 73%
- Equity release: 8%
- Landlords selling with sitting tenants: 5%
- Relocation and retirement planning: 8% combined
- Probate cases: 2%
Pros of selling to quick buy companies
- Speed and certainty: Completion times are far shorter than traditional sales, often bypassing chain delays.
- Convenience: No need to list on the open market, host viewings, or negotiate with buyers.
- Sitting tenants: Landlords can sell properties with tenants in place without disruption.
- Certainty in a volatile market: With economic uncertainty, higher mortgage rates, and hesitant buyers, quick buy firms provide a guaranteed sale.
Cons of selling to quick buy companies
- Below market value: Properties are typically sold at a significant discount, which may not align with an investor’s long-term financial goals.
- Limited negotiating power: The firm sets the price based on their valuation, leaving little room for negotiation.
- Opportunity cost: Selling at a discount could mean missing out on higher future returns if the market rebounds.
Is it worth it for investors?
Selling to a quick buy company can make sense for investors in the following scenarios:
- Cash flow pressures: If immediate liquidity is required to repay debts, fund new investments, or release capital for other purposes.
- Underperforming assets: For landlords holding properties that are generating minimal or no yield.
- Avoiding market risk: In a declining or uncertain market, securing a sale quickly might be preferable to waiting months for a buyer.
- Complex sales: Properties with legal or structural complications, or those with sitting tenants, can be easier to sell to quick-buy firms.
However, for those with the financial resilience to hold out, traditional methods (via agents or auctions) may deliver better returns, even if the process is slower.
Conclusion
Selling to quick buy firms offers speed and certainty, which can be invaluable in a sluggish market. However, investors must weigh this against the financial compromise of accepting below market rates. For those facing time-sensitive pressures or underperforming portfolios, quick buy companies can provide a practical solution. But for those with the luxury of time, exploring traditional routes or auction sales may ultimately deliver better value.