Around one in 10 homes is selling across Britain without being publicly marketed, new analysis shows.
The growth in off-market transactions has increasingly been driven by lower-priced properties, according to estate agents, Hamptons.
A lack of available homes means buyers have been prepared to pay a premium to seal a deal before a home is advertised more widely, including online.
Homes marketed discreetly have achieved a higher proportion of their asking price than their counterparts which were more widely marketed in 2022, the research showed.
The average off-market home sold in 2022 achieved 99.5 per cent of its asking price, surpassing a 2014 record of 98 per cent which was set during a strong prime central London market.
Meanwhile, similar homes marketed to a wider audience have achieved an average of 99.1 per cent of their initial asking price so far this year.
Typically, homes spend two to four weeks being quietly marketed, before either a buyer is found or it is launched on the open market to reach a wider audience, Hamptons said.
It added in the five years running up to the start of the coronavirus pandemic, the average home sold off-market achieved £1.2m.
However, so far this year, the average discreetly marketed home changed hands for £858,000, down from £979,000 in 2021, Hamptons said.
With more off-market properties securing a sale quickly, fewer homes are then being advertised more widely later on.
Some 26 per cent of homes marketed discreetly came on to the open market this year, down from 38 per cent pre-pandemic in 2019, according to the study.
It came from Hamptons’ analysis of data from Countrywide, a network of estate agents which includes Hamptons.
Aneisha Beveridge, head of research at Hamptons, said: “Selling off-market has become an increasingly established sales strategy over the last five years.
“The first generation of off-market sellers were those people primarily concerned about the privacy of their home, keen to ensure it wasn’t exposed to anyone who wasn’t serious about buying it.
“While these sellers still make up around half of homes launched off-market, they were joined in 2016 by central London homeowners keen to minimise their digital footprint in what was an increasingly tough market.
“Post-pandemic, selling off-market has increasingly been driven by sellers keen to avoid wider marketing and limiting the number of buyers through their doors.
“And this strategy has paid off. Buyers have been willing to pay a premium to secure their home off-market and prevent sellers from marketing the property openly to other interested parties where competition is rife.”
Selling off-market has traditionally been a strategy in prime parts of the country, predominantly in central London where privacy and pricing concerns are the primary motivation for most secret sellers, but this is slowly changing.
During the first five months of the year a record 23 per cent of London homes changed hands without being openly marketed, a rise from 20 per cent in 2021.
However, today a higher proportion of homes are now sold discreetly in prime country markets (24 per cent) than in London – 59 per cent of off-market sales are now outside the capital.
This extension into both country and non-prime markets has primarily been driven by a lack of stock and a seller’s ability to secure a higher price in a competitive market, rather than privacy concerns.
But experts believe it may not last for long.
Ms Beveridge added: “It is likely that we are reaching peak off-market sales levels. With the number of homes on the market forecast to rise later in the year, buyers are likely to be more cautious about paying a premium in the face of an increasing amount of choice.
“If this happens, off-market sales may retreat back into their prime heartlands.”
House prices continue to grow
House prices continued to rise in May, up by 0.9 per cent between April and May as demand continues to outstrip supply.
Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high.
At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.
However, experts believe the industry will start to cool soon.
Robert Gardner, Nationwide’s chief economist, said: “Household finances are likely to remain under pressure with inflation set to reach double digits in the coming quarters if global energy prices remain high.
“Measures of consumer confidence have already fallen towards record lows. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”