Prime London’s market seems to be bottoming out, agrees Camilla Dell
by PrimeResi June 6, 2017
Thing are looking up in the Prime Central London property market, says Black Brick boss Camilla Dell, despite all the uncertainty swirling around the General Election and Brexit negotiations.
Dell’s calling of the bottom of the market (or at least the beginning of the end of a downward run) chimes with analysis from a fleet of other key players including Cluttons, Knight Frank, JLL, Savills and – most emphatically – Humberts.
But Dell’s gone a bit further, offering up a practical insight into how one benchmarking play is getting decent amounts off those unrealistic asking prices for its clients: 2014 prices, less the value of George Osborne’s additional stamp duty, seems to be the magic formula for buyers.
Black Brick says it has negotiated below asking price on 67% of the properties recently purchased on behalf of clients, with an average reduction of 7%.
We are seeing vendors and agents become more realistic with pricing, and the market has now largely absorbed the Stamp Duty increases that came into force last April, so buyers are wanting to get on and purchase.
The falls in Prime London pricing over the last 12 months or so correlate very closely with the Stamp Duty increase
We don’t expect prices to fall much further. Indeed, the falls in Prime London pricing over the last 12 months or so correlate very closely with the Stamp Duty increase. Those properties at the lower end of the market, where Stamp Duty was basically unchanged, have held their value well. However, for more expensive property, price falls tend to mirror the increased Stamp Duty charge.
This has given a useful yardstick on which to negotiate with sellers – we can look at the property’s value in 2014, take off the additional Stamp Duty, and use that as a benchmark. It’s proving a successful approach for us and our clients. It’s in a flat market like this where a buying agent can really help – we are going in, negotiating hard – and it’s working.
The fall in sterling has seen cost reductions in the 30-40% range for dollar buyers which is partly the reason why these buyers are keen to invest. Many have decided that this is the year to add to their London portfolios and we have been instructed by a number of families to start the property search. Based on a Conservative win on 8th June, we don’t expect to see any material effects on the London property market as a result of the general election.
Camilla Dell is Managing Director of Black Brick
black-brick.com
Sellers and estate agents in the prime central London property market are being more realistic with asking prices and as a result there is movement in what has been a stagnant market.
The market has largely absorbed the stamp duty rises introduced in 2014 and for international buyers currency exchange means they are getting more value for their money, according to property search firm Black Brick.
There is strong interest from buyers in the Middle East and Asia and this could be due to them not being as affected by Brexit as would be buyers from Europe.
‘We are seeing vendors and agents become more realistic with pricing, and the market has now largely absorbed the stamp duty increases that came into force last April, so buyers are wanting to get on and purchase,’ said Camilla Dell, managing partner of Black Brick.
‘We don’t expect prices to fall much further. Indeed, the falls in prime London pricing over the last 12 months or so correlate very closely with the stamp duty increase. Those properties at the lower end of the market, where stamp duty was basically unchanged, have held their value well. However, for more expensive property, price falls tend to mirror the increased stamp duty charge,’ she pointed out.
‘This has given a useful yardstick on which to negotiate with sellers. We can look at the property’s value in 2014, take off the additional stamp duty, and use that as a benchmark. It’s proving a successful approach for us and our clients. It’s in a flat market like this where a buying agent can really help. We are going in, negotiating hard and it’s working,’ she added.
Black Brick has negotiated below asking price on 67% of the properties recently purchased on behalf of clients, on average by 7%. There are currently a range of buyers in the market from all nationalities particularly British and Middle Eastern of which almost 50% are owner/occupiers, with 25% investor led.
‘The fall in sterling has seen cost reductions in the 30% to 40% range for dollar buyers which is partly the reason why these buyers are keen to invest. Many have decided that this is the year to add to their London portfolios and we have been instructed by a number of families to start the property search,’ Dell concluded.
It’s hard not to think about the Monopoly board when considering what the most salubrious areas are in London. Park Lane and Mayfair may be the highest prized, but in reality, they’re being outstripped by a train station.
Over the past 12 months, Marylebone has been the top performing area in Prime Central London, according to data by Knight Frank. From March 2016 to March 2017, house prices have risen by 0.7 per cent, which may not sound like much until you factor in that prices have dropped by 6.4 per cent on average across PCL.
“During a more challenging market, we found that buyers look outside their traditional locations,” says Christian Lock-Necrews, partner and office head for Knight Frank’s local branch. “Many found Marylebone in that period to be an area of London that represented best in class properties in a central London location, yet it allowed them to get more for their money than Mayfair or Knightsbridge.”
Indeed, Knight Frank’s report found that UK buyers were generally downsizing from Hampstead and Highgate or relocating from Mayfair, with some agents now saying it’s more popular than the toast of the Monopoly board.
“Marylebone used to be the ‘forgotten’ postcode and property prices were typically 30 per cent lower than Mayfair,” says Camilla Dell, managing partner at buying agency Black Brick. “There is now very little difference in pricing between the two.”
Data from David Fell, research analyst at Hamptons International, puts half of all sales at over £1m, with the most expensive property ever sold going for £12.75m on Blandford Street in 2014, which is surprising for an area not known for large houses, but its converted apartments in Georgian mansion blocks and Victorian terraces.
“Unlike most of its neighbours, Marylebone was never built for the super-rich,” adds Fell. “Terraces and squares were colonised by the comfortably well off. Homes were built one bay window wide with porchless entrances and few stucco details. Prices remain reflective of this social divide to this day with Oxford Street presiding over one of the largest price gaps anywhere in the capital.”
Historically, new builds have been relatively thin on the ground – there was a boom in the late 90s when the sidings of the railway station were converted into 380 flats – but a recent slew of high end homes have undoubtedly changed the character of the area. Notable schemes include Galliard’s The Chilterns, Ronson Capital Partners’ Chiltern Place, The W1 on the high street and Park Crescent overlooking Regent’s Park.
Portland Place has been singled out by Simon Deen, director of Aston Chase, as the most desirable street, saying it’s “fast becoming the Park Avenue of London.”
The retail offering in Marylebone is another big draw to the area for domestic buyers. Landowners Howard de Walden Estate and Portman Estate have been hugely influential in this area, curating a village atmosphere and a retail mix that’s 71 per cent independent. There are an impressive 83 restaurants in the area, including celeb-haunt Chiltern Firehouse, only pipped to the post by estate agents, of which there are 84.
The area’s increasing desirability (not to mention Crossrail, which will fling frequent flyers to Heathrow in under 30 minutes) has attracted a lot of new overseas buyers, too, largely from the Middle East, India and South Asia, according to David Adams, director of Humberts, who has been working in the area for over 30 years.
He adds that international investment has been fuelled by George Osborne as much as anything else. “The high stamp duty on property discourages British homeowners from moving locally, but it is more affordable for international investors buying with US-backed currency and those from low-tax regimes such as Dubai.”
Foxtons says its values the average one bed flat in Marylebone at £800,000, while family houses are commanding prices of over £2.5m.
Area highlights
Famous things first: the Chiltern Firehouse has overtaken The Ivy in recent years as the go-to place for celebrities to be papped. Yet, it’s not the only restaurant that’s been creating a stir; L’Autre Pied, Trishna and Orrery all have Michelin stars and Artesian has claimed the title of world’s best bar twice. Selfridges, while hardly a hidden treasure, is still an impressive local department store to call your own. It’s the second largest in the UK after Harrods in Knightsbridge. For a touch of culture, Regent’s Park Open Air Theatre is nearby and has become a fixture of summer in the city, fitting 1,200 people for each performance. Wigmore Hall is also on your doorstep, an intimate Victorian concert hall hosting chamber music and lunchtime recitals. Visit one of Europe’s finest art galleries in Hertford House. Admission to the Wallace Collection is free and is also home to a world class armoury.
Transport Source: TfL
Time to King’s Cross: 12 mins
Time to Liverpool Street: 21 mins
Nearest train station: Marylebone
Best roads Source: Hamptons International
Most Expensive: Wyndham Place: £5.325m
Best Value: Frampton Street: £408,000
There are many reasons for buying a home: location, size and lifestyle all spring to mind. But equally important, though more elusive, is a sense of community. For Sarah and Justin Savage, who work in the theatre industry, that comes from a vibrant arts scene with pop-in-for-tea neighbours and a friendly local.
“We are used to having a community and chatting to our neighbours, and want to carry on doing that,” says Sarah. “As well as being close to a good theatre.”
Sarah and Justin, both 60, first met four years ago – after finding each other on the Telegraph dating website – at the Riverside Studios in Hammersmith, west London, where early episodes of Doctor Who, Hancock’s Half Hour and Play School were made.
Sarah, a former actress and scriptwriter, and Justin, a theatre producer, married two years later and started the hunt for a home for their new life together.
When the newly-weds discovered that Riverside Studios was being redeveloped as an arts hub in conjunction with a new apartment complex, Queens Wharf, they realised they had found their “forever home”.
“It was a no-brainer, really,” says Sarah. “It enabled us to have access from our building to the cinema, theatre, restaurants, bars, and have places to take clients. It is the perfect spot for us at this stage in our lives.”
The couple – who now run their own theatrical management agency, Savages, representing actors – bought a three-bedroom apartment with a large terrace, and plan to move in this November.
A flat at Queens Wharf, sold through CBRE Residential. Two-bedrooms start from £1.15 million, rising to £1.425 million for a three-bedroom flat
Queens Wharf has 165 apartments, which are being sold through CBRE Residential; two-bedrooms start from £1.15 million, rising to £1.425 million for a three-bedroom flat.
Creating cultural spaces within new apartment blocks is a growing trend as developers have realised they help sell homes and create communities. “People want to live and work in a place where things are happening: arts exhibitions, music venues, street parties and celebrations in the community,” says David Twohig, chief development officer at the group overhauling Battersea Power Station.
Twohig is tasked with the challenge of creating a sense of community in the sprawling, shiny new development.
Arts spaces and socialising are incredibly important for all areas, but particularly new ones. They enable people to come together and help build community. It is the stuff of life David Jubb, artistic director and the boss of Battersea Arts Centre.
Battersea, which will ultimately have 25,000 people living and working within its 42 acres, will have 250 shops, cafés and restaurants and nine entertainment “platforms”, which include open squares, parks, playgrounds and indoor areas. The Village Hall, a rather bucolic-sounding name for an urban community space, sits within Circus West Village, the first phase of 865 apartments where prices start from £400,000.
Events there are being curated with the help of local Battersea Arts Centre, and are designed to draw in the wider community as well as new home owners. A choir is already up and running while theatre, stand-up comedy, Ted talks and local celebrations such as weddings are in Battersea’s vision.
“Arts spaces and socialising are incredibly important for all areas, but particularly new ones,” says David Jubb, artistic director and the boss of Battersea Arts Centre. “They enable people to come together and help build community. It is the stuff of life.”
A vibrant cultural centre also helps create a sense of place. As well as several restaurants, a pool and gym, One Tower Bridge by Berkeley Homes will include a new theatre alongside its 376 apartments.
The 900-seat Bridge Theatre, run by Sir Nicholas Hytner and Nick Starr, both veterans of the National Theatre, opens this autumn. Not only will it add glam to the already high-end apartments (with prices starting at £1.475 million), but it will enhance a relatively overlooked section of the South Bank.
Increasingly, creative outlets are the amenity of choice. Brewery Gate, a development of 28 family homes by St James’s in Twickenham, has foregone a gym in favour of a community hub and 320-seat theatre. The success of an arts – and indeed any – public venue depends heavily on how it is run, and this facility, where homes start from £1.55 million, will be managed by St Mary’s University.
Such venues also transform the merely interesting into the highly desirable. Television Centre is generally regarded as “one of the coolest and hippest new developments,” says Camilla Dell, managing director of Black Brick, a buying agency. And that is despite being in less-than-fashionable White City. Formerly part of the BBC, the much loved Grade II listed building is being turned into 950 homes. Prices start from £750,000 for a one-bedroom apartment.
It includes a host of the usual amenities (health club, hotel, cinema), but it is the building’s television history and its three soon-to-be-reopened studios (home of Strictly Come Dancing, among others) that make it stand out. Wander down from your flat to a live recording of your favourite show – how’s that for local culture?
From 23-25 May, Clerkenwell Design Week will be upon us again. The annual event, with its artisan furniture makers and 3D-printing architects, will be the eighth celebration of the area’s transformation from post-industrial, City backwater to the home of more creative businesses and architects per square mile than anywhere else in the world.
And it hasn’t just found favour with businesses, but residents too, as increasing numbers of Londoners look to the design district as a desirable place to live. The local branch of Dexters estate agents says Clerkenwell “is the high-end face of edgy east London, with its eclectic mix of loft-style apartments, period homes and modern blocks within a commercial setting.”
The only thing to say about Clerkenwell’s housing stock is that it’s incredibly diverse. Foxtons notes that only 12 per cent of the property portfolio is freehold, which accounts for the popularity – and higher asking prices – for apartments and terraces. Property prices vary enormously, depending on the particular dwelling. This variation is due to the absence of a single masterplan to develop the area, as it was owned by over 100 different estates.
“Narrow streets lined with old industrial buildings saw Clerkenwell give birth to loft living in London during the early 90s,” says David Fell, research analyst at Hamptons International, who marks Manhattan Loft Corporation’s first project in Summer Street as a turning point. “Local developers were quick to follow, with warehouses vacated by artisans converted into flats for the legions of new City workers created by the 1980s Big Bang.”
The number of conversion schemes has meant two thirds of sales sold last year were new homes. While these conversions are still wildly popular, they are not all created equal. Jamie Burnhope, a buying consultant at Black Brick, says, “In the 80s and 90s, developers did not spend a lot of money maintaining the integrity of the buildings, and as a result, many lost their original character. There are only a few buildings that deliver the type of flat associated with the area, including 190 St John Street, Paramount Building, Ziggurat Building, 1-10 Summers Street and Warner House.”
But it’s not just the architecture that draws people to live in Clerkenwell; it’s the social life. Restaurants, gastropubs, boutiques and theatres have come moved in, and 80 per cent of its retailers are independents. “The main difference between what it used to be five years ago and now is how cosmopolitan and upbeat the area has become,” says Foxtons’ Josh Walsh. “It used to be seen almost as an extension of the City, buzzing during weekdays, but quiet at weekends.”
The area’s newfound vibrancy means it’s seen year-on-year house price growth of 7.7 per cent, according to Hamptons International data, which also recorded 102 sales of over £1m in 2016. Your average two bedroom flat will cost in the region of £950,000, around £2,500pcm to rent, proving a solid buy-to-let investment, according to Jo Eccles, managing director at Sourcing Property.
“Gross rental yields are much higher than other parts of London; we’re achieving on average 3.4 per cent for the landlords whose properties we manage and the investment properties that we bought have all let extremely quickly, typically to finance, tech and media tenants.”
Work is also nearly complete at Farringdon for the new Crossrail station, which is expected to arrive in 2018.
“From here you can walk into the City but creating that link between Farringdon and Canary Wharf is going to provide a huge change,” says Chris Rowe, sales manager at KFH Clerkenwell. “No one’s buying now knowing that they’ll then be able to get to work in a year’s time. People want to move in when the transport links are there, so I don’t think we’ll really see that jump [in prices] until it’s here. But they are definitely going to jump.”
But until that time comes, Clerkenwell will have to settle for being the City’s cooler, creative cousin.
Area highlights
There are more great local restaurants in Clerkenwell than you can wave a greasy spoon at. The Hawksmoor team are behind Foxlow, a modern European restaurant that loves its meat, while fancy French can be had at the Bleeding Heart, and its neighbouring pub and bistro. For a cracking brunch, head to The Modern Pantry, serving up cooked combinations that are a mile away from your standard eggs benedict, or go bottomless at the Bourne & Hollingsworth Building at the weekend. Smithfield, London’s oldest meat market, is as popular as ever, while Exmouth Market, on a semi-pedestrianised street, is its trendier neighbour. See some of the best dance companies in the world perform at Sadler’s Wells, the sixth theatre on the site since 1683, while the Charles Dickens Museum, near the border with Holborn, is also worth a look-in for original manuscripts and personal artefacts.
Area guide
House prices Source: Zoopla
DETACHED
£279,082
SEMI
£366,196
TERRACED
£934,883
FLATS
£803,010
Transport Source: TfL
Time to King’s Cross 3 mins
Time to Liverpool Street 5 mins
Nearest train station Farringdon
Camden is fourth in a list of property investment hotspots across the UK, with prices predicted to rise 33.9 per cent over the next five years.
The borough placed behind Richmond upon Thames, St Albans and Three Rivers.
The Barclays UK Property Predictor indicated prices would increase at a rate of 6.02 per cent a year..
London as a whole is predicted to see an average annual increase of 2.27 per cent, or 11.88 per cent by 2021.
As for the UK as a whole in the next five years, Barclays expects the average annual price increase to be 1.31 per cent a year, or 6.1 per cent by 2021.
The report estimated a nationwide price rise of 6.1 per cent by 2021, bringing the average property value to just shy of £300,000.
Average house prices are expected to rise to £290,714, up £16,714 from today’s average.
38 per cent of high net worth investors (HNWIs) anticipate a price hike in the north of the country, spurred on by high employment, increasing average earnings and promising business start-up rates outside the capital drawing entrepreneurs looking to make better profits than overhead heavy London.
Not often the focus of housing optimism, millennials are purportedly behind the predicted buoyancy of the investment market according to Barclays, that’s provided they have refrained from splurging on avocado toast and have a cash to splash.
Property made up 41 per cent of the portfolios of those surveyed, 18 per cent more than over 55s.
Younger HNWIs were also more optimistic, with 75 per cent aiming to increase the proportion of property in their portfolio by 2021. Just one in 10 over 55s said the same.
The bank of mum and dad is clearly paying dividends to well off property pundits who benefit from a plumper purse. Indeed, young HNWIs were more likely to own more than one property than their older counterparts.
The rental market is prime property for millennial investors, with 65 per cent of those looking to buy doing so in anticipation of rental rises.
23 per cent said they would use a buy-to-let mortgage to fund procurement, in contrast to just 7 per cent amongst older investors. Just under half (48 per cent) of their annual income was generated from rent.
Dena Brumpton, CEO, Wealth & Investments at Barclays, said: “It’s encouraging to see that property is still viewed as an important part of the investment portfolio with high net worth investors typically owning three properties and over a quarter planning to buy property because they believe that it offers long-term investment security.”
Camilla Dell, managing partner and founder of Black Brick Property Solutions is less encouraged. “I would say [this] is quite a simplistic way of looking at the market because the London property market is not homogenous; different parts of the market will behave and do very different things in the next five years,” she said.
“Savills are actually predicting Prime Central London growth of 21 per cent over the next five years cumulative, so quite a bit more than what Barclays’ price predictor is showing. Knight Frank are suggesting that east London will increase far more than more traditional west London and Prime Central London postcodes. So there’s quite a big discrepancy in their data.”
Unfortunately, the buying agent is also less convinced that Camden will perform better than elsewhere. “I’ve seen lots of research around HS2, Crossrail 2, east London because of all the technology companies investing there but I can’t say I’ve come across anything that says Camden is a hotspot,” says Dell.
Instead, Dell offers that the most growth will be seen in the market below £1 million outside Prime Central London. “That’s where we see the most growth happening over the next five years where we still continue to see supply and demand in balance and first time buyers competing with investors.”
Predicting the future in today’s turbulent market is quite the challenge given the number of known unknowns: Brexit and next week’s General Election to name but a few, and agents will no doubt be reluctant to put figures on future sales in a market which is already suffering the consequences of confusion and uncertainty.
“Most forecasts actually are predicting that London will flat line over the next two years because of uncertainty over Brexit,” said Dell.
“Actually, the market could fall in certain areas and certain price brackets if we suddenly see large numbers of people leaving the city. Potentially we might see price falls in certain parts of the market; that market between £2,000,000 to £5,000,000 is particularly vulnerable.”
Barclays’ report is the latest in a line of optimistic property reports which agents claim have no stake in the reality of a market encumbered by sluggish sales and slashed asking prices as a result.
“Sellers in the current market are having to cut their asking prices in order to get people in through the door,” explained Dell. “We see that more and more, particularly on properties priced from £2,000,000 upwards in central London. That’s been the part of the market that’s been the most susceptible to things like Stamp Duty increases.”
The very top end of the market is a “micro market” that operates independently and is less susceptible to political and economic fluctuations due to the availability of capital to buyers in the £20,000,000 plus market.
As for the future, Dell was cautious rather than pessimistic. “I think in the next two years there’s a lot of uncertainty because of Brexit which is likely to affect London more than any other market,” she said.
There is a silver lining to the great Brexit stormclouds brewing in Brussels, however. “Potentially that uncertainty brings opportunities for buyers because they can take advantage of that and that’s certainly what we’re doing at the moment for our clients.”
Sealed bids and gazumping have returned to central London in a remarkable spring revival of a market in “deep freeze” for two years.
Buying agents said the number of clients looking for “Brexit bargains” in areas such as Knightsbridge and Canary Wharf had soared by as much as a third in recent weeks.
Interest is most intense in the sub-£1 million bracket where stamp duty rates are lower, but also in the £3 million to £5 million range, with Chinese buyers particularly keen to invest.
Prices in prime central London areas have fallen by an average of 12.5 per cent since they peaked in late 2014, when former chancellor George Osborne increased stamp duty on properties over £1 million, according to agents Savills.
This, combined with a 16 per cent fall in the value of the pound against the dollar since the EU referendum last June, means that the London market is now around 30 per cent cheaper for a foreign buyer — and as much as 50 per cent less expensive for some individual properties.
Trevor Abrahmsohn, managing director of agents Glentree International, said: “We’ve been through a torrid time but Brexit has saved the property market at the higher end. I am delighted to say we have agreed £30 million of sales in the past two weeks. We had a run of seven sales in the £3 million to £5 million range and are now short of stock.”
The recent stability in the pound has also persuaded some investors that it is now “safe” to plough their money back into London bricks and mortar.
Jo Eccles, of buying agent Sourcing Property, said: “The market is definitely picking up across all price brackets. We have been bidding on a family house in Knightsbridge for just under £5 million, there is competition from another buyer and the vendor has this afternoon asked to go to sealed bids.
“We have seen nearly 35 per cent increase in the past three weeks in the number of buying clients we are representing and a 60 per cent increase in serious enquiries from potential buying clients over the past two weeks.”
Camilla Dell, managing partner of agent Black Brick, said: “We are also seeing a return of competitive bidding across the spectrum, particularly on property that is priced correctly in line with the current market.
“We have also seen a return of gazumping. We recently secured a flat in Canary Wharf for a client at £1.48 million. Our initial offer of £1.44 million was accepted but we were gazumped by another buyer who offered £1.5 million. Luckily, we managed to re-agree the sale at the original asking price as our client was a cash buyer.”
Cherie Blair was allegedly gazumped by a British actress after trying to buy a five-bedroom house in Marylebone for her daughter. The barrister, 62, is said to have had an offer of £2,765,000 accepted for the Georgian property, only to be outdone by a higher offer from St Trinian’s star Talulah Riley. The actress, 31, who divorced tech billionaire Elon Musk for the second time last year, reportedly paid £3 million.
Another factor has been the closing of the price gap between central London and the suburbs where there have been double-digit annual rises in prices over the past two years. An example of prime property being snapped up is a five-bedroom townhouse in Highgate that was on the market for £6,950,000 and is now under offer.
Jonathan Hopper, managing director of the buying agents Garrington Property Finders, said: “Prices in the outer boroughs will never catch those in prime London, but the boom in the ’burbs is narrowing the gap with the flagging centre — and making properties of all sizes in desirable postcodes appear better value.”
In its heyday, dukes, dandies, artists and politicians all lived and socialised in St James’s, London. The district, convenient for both St James’s Palace and the Houses of Parliament, was the height of fashion. Gladstone, Sir Isaac Newton and William Thackeray all lived here.
The Earl of Shelburne, later Marquess of Lansdowne and Prime Minister, liked St James’s so much he even founded his own club, Boodle’s, in 1762.
There are still nine private members’ clubs and hotels in and around St James’s Street. The area, which is only now beginning to return to its residential roots, was the place for the wealthy gentleman.
“It’s old English posh,” says Peter Byfield, a restaurateur and entrepreneur who moved to St James’s from Mayfair 18 years ago and has lived there ever since. “St James’s is an incredibly old-fashioned and dignified place to be.”
After the Second World War, the area gradually became more commercial and, with fewer people living there, St James’s lost some of its charm. Now, however, a change in planning rules, allowing office-to-residential conversion, is creating more homes and giving the district “a new lease of life”, says Simon Burgoyne of Knight Frank. “The quality of the apartments is attracting both the British and the international market.”
One such development is Dukelease’s Beau House in Jermyn Street, named after the Regency dandy Beau Brummell. The socialite’s fastidious dress sense and patronage of the local tailors helped make Jermyn Street famous – and the new homes reflect this. The eight apartments are as bespoke as a handmade suit and with the same attention to traditional detail.
A two-bedroom apartment in St James’s Chambers is on the market with Knight Frank for £3.25 million
The many unique features include leather-panelled walls, walnut cabinetry and herringbone-pattern oak floors. There are Calacatta marble floors, Boffi kitchens and Romana Salperton wall lights.
Prices start from £1.85 million for a one-bedroom apartment over 657 sq ft, and rise to a sizeable £15 million for the three-bedroom furnished penthouse, which comes with a TV-equipped roof terrace and views of Christopher Wren’s St James’s church. The homes are being marketed by Knight Frank.
Jermyn Street’s distinctive shops, some of which are still owned by the descendants of the original families that established them, have been frequented by Diana, Princess of Wales, Ted Heath and Joanna Lumley.
Its ‘olde worlde charme’ and postage-stamp size mean that buying a home in St James’s is not easy
“Jermyn Street is a curiosity area,” says Richard Harvie, owner of Harvie and Hudson shirtmakers. “People love going into old family businesses that have not changed a lot, with slightly creaky wood floors, and which do not exist anywhere else in the world.”
However, St James’s “olde worlde charme” and postage-stamp size (it is wedged between Piccadilly and the Mall) means that buying a home here is not easy, as “there are very few flats”, says Caspar Harvard Walls, partner with the buying agency Black Brick.
Westminster council estimates that there are just 7,239 households in St James’s. Unlike Mayfair or Knightsbridge, there are few large blocks of serviced apartments and even fewer with fancy hotel facilities, gyms and spas.
A bespoke decorated flat in Dukelease’s Beau House in Jermyn Street, on the market with Knight Frank from £1.85 million
The majority of developments are boutique, with clusters of (generally small) one- and two-bedroom flats for between £1 million and £2.5 million – roughly £2,000 to £2,500 per sq ft. Newbuild apartments, often behind elegant Georgian and Victorian listed facades, are pricier and reach £3,000 per sq ft and more. Knight Frank is selling The Pall Mall Collection and three of the four apartments remain; a three-bedroom flat is £4.95 million and a four-bedroom penthouse is on the market for £8.95 million.
House prices there are not all in the millions, as Horne and Harvey is selling a one-bedroom flat on the fourth floor of a portered building in Duke of York Street for £950,000.
“The streets are quite densely packed and often people want to be higher up, on the second floor or above, as it can be quite dark lower down,” says Harvard Walls.
The Crown Estate, which owns around 50 per cent of the buildings in the area, is halfway through a £500 million refurbishment programme of its St James’s portfolio, which, although it consists mainly of retail such as St James’s Market, includes some new homes as well.
There’s a lot of demand, too: recent redevelopments such as Cleveland Court, near St James’s Palace, have all swiftly sold.
Forthcoming apartments, which will only be available to rent, include huge, lateral three-bedroom flats and a five-bedroom penthouse in 30 St James’s. All will be available at the end of this year.
Surrounded by art galleries and smart restaurants, with the West End and the park within strolling distance, St James’s appeals to the buyer who “has a house in the country and wants a pied-à-terre in London”, says Harvard Walls, “so they can walk to work and to the opera”.
Estate agents are investing in headsets, but not everyone is convinced.
Estate agencies are spending tens of thousands of pounds developing virtual-reality tours of high-end properties, so buyers can privately gaze at the interior of immaculate homes, including those yet to be built, in their own time.
JLL, the property consultant, is working with a virtual-reality company to offer virtual tours of properties for sale, or to let. It says the tours, available this spring, will be “fully immersive and as close to reality as possible”.
“The benefits include saving time,” Tim des Forges, a director at JLL, says. “Rather than the buyer being taken to see 20 flats, they can view them virtually and perhaps opt to see only their top three in person. Some may buy or rent only after seeing the virtual tour.”
The estate agency Carter Jonas is going one better. Using new technology, it has launched what it believes is the first virtual-reality tour to include an estate agent — viewers can follow an agent through a house, yet virtually look around and turn away from them. Carter Jonas says you would not let a buyer wander round your home without guidance, so why would you do so virtually?
The prototype is being used for a development in Leinster Square, in Notting Hill, west London, and is expected to be offered at two other central London developments, and one outside the capital. “The difference [with our technology] is that I’m in the video speaking,” says Amelia Blake, a London residential sales specialist at Carter Jonas.
Virtual-reality technology has been around for decades, but has not yet been good enough, nor cost-effective, for general use. Yet it has made big leaps in portraying spatial depth, which buyers can’t gauge from a floor plan or pictures.
Tours typically will be offered through an app downloaded on to a smartphone and viewed through a headset.
In Asia, however, tours are often viewed on tablets.
“Some clients do not want to put goggles on their head,” says Alex Newall, the managing director and founder of Hanover Private Office, a property consultancy.
The technology is often aimed at overseas investors. “In the prime central London market, international buyers are crucial to the business so we do what we can to accommodate their needs,” Blake says. Virtual reality has been vital for developers selling off-plan apartments, says Newall, and at a time when high-end property sales have slowed, estate agents might consider investment in virtual reality money well spent.
However, not all experts are convinced that virtual-reality viewings, however high-tech, are going to catch on for properties already built. “They are fun gimmicks, but anyone who is going to buy a house will visit it,” says Newall. “It doesn’t sell the house.”
He says that investment in drone photography has been more revolutionary for marketing properties.
Camilla Dell, the founder of Black Brick Property Solutions, an independent buying consultancy, says: “I have seen very little evidence of high-net-worth clients using this sort of technology. When people are spending millions, 99.9 per cent of the time they will get on a plane and see it, and we would be worried if they did not.” At best it may help clients to draw up a shortlist, but ultimately the virtual-reality experience cannot replicate being in a property and seeing the neighbourhood, and older buyers see it as a faff rather than helpful, Dell says.
Nonetheless, sellers yet to be convinced of the usefulness of virtual reality should perhaps keep the faith; it will provide them with useful analytics, including “how long buyers spend in each room, what they look at and what’s important to them,” says des Forges. “Sellers can take this information to maximise the potential of their property, and agents will be able to use it for future instructions, for example, by telling you that 60 per cent of virtual reality viewing was spent looking in the kitchen — so it’s good to place an emphasis on it.”
As property advisers, we are often asked what is the best kind of investment in London – a new build property or an older style or period property?
New build developments certainly have a natural appeal in that everything is brand new, which means buyers can put their own stamp on the property and maintenance should be low. People also like the concept of buying off plan, on the basis that prices will rise as the development nears completion. What’s more, off-plan developments often offer more flexible payment options.
When buying off plan, there are a number of things to be wary of. The biggest risk is that you can’t actually inspect the property. You need to be able to read the floor plan and visualise how the flat will look and what the outlook will be like, which can be challenging for the untrained eye. Swanky marketing suites can also often be very misleading.
You also need to take into account things like service charges, as many developers now calculate service charge on price per square foot basis, which can be confusing, and can significantly add to your annual expenditure, an important factor to consider particularly if you plan on renting the property out.
It is also important to consider the potential for capital growth. Many new builds can be priced as much as 30 per cent higher than surrounding re-sale properties, and as a buyer, you need to ask yourself whether that premium is justified. Looking back over the boom and bust periods of London’s property market, it is the older, period style properties which have tended to appreciate most over time.
New builds usually appreciate far slower, especially as they are often located in ‘up and coming’ areas, where supply outstrips demand. When the market drops, these developments tend to take a much bigger hit due to a combination of location and the fact that there is a higher density of similar properties in the area, with prices falling up to 20 per cent in some cases.
We recommend taking into consideration the location, as well as the “rarity” factor of the building. For example, we have purchased several apartments in the former BBC Television Centre development in White City for clients. This is a particularly interesting new development thanks in part to its history, its proximity to transport links, as well as Westfield shopping centre.
Clients of ours who bought into the scheme in early 2015 have already seen a 10 per cent uplift in the value, and we are encouraged by the fact that there is very little evidence of buyers trying to sell on their contracts before completion.
Another consideration when buying new is that there are deals to be had. Developers with completing stock are more able to play with their margins and are able to give ‘deals’ to their buyers. Buyers should be wary of developer incentives, such as offering to pay stamp duty, though – the cost is often made up in the asking price of these so-called “incentives”.
When weighing up the options, the key to buying new build property is to do your homework; seek impartial advice on the developer, the area – check the local council’s housing policy for further developments – and the property itself.
A dedicated space for doing hair, nails and make-up is becoming a must-have in high-end homes
Donald and Melania Trump have been handed the keys to the White House. This means that, in keeping with tradition, the Trumps are allowed to make changes to the property to meet their family’s needs.
While Michelle Obama spent her early days as first lady focusing on cultivating the vegetable garden so her family could eat fresh vegetables, this week we discovered that Melania’s priority is to add a “glam room”.
“There will absolutely be a room designated for hair, make-up and wardrobe,” says her make-up artist, Nicole Bryl, reassuring those who were worried there wasn’t going to be.
It is in this room that Bryl will toil for the 75 minutes of “uninterrupted focus” it takes to do the first lady’s make-up each time. “Melania wants a room with the perfect lighting scenario, which will make our jobs as a creative team that much more efficient,” Bryl adds.
Yet Mrs Trump is not the only woman who takes her beauty routine so seriously that it warrants its own room. Glam rooms are a feature in the most expensive homes in this country — and may become more popular among women who hope to copy Melania’s über-groomed approach to life.
So what is a glam room? It’s a glorified dressing room — a room with good lighting and space for a hairdresser and make-up artist to work their magic, possibly with a hair-washing station. Above all, it is somewhere with eye-wateringly expensive shelving, with compartments for belts, rings, watches and handbags. One central London glam room even features a cosmetics fridge designed to keep the owner’s make-up at the optimum temperature.
Camilla Dell, a buying agent, reports that she has viewed homes with not only glam rooms, but glam suites, where a separate lounge area containing a minibar and TV is located off a dressing room, so “all the girls can discuss and debate outfits”, Dell says.
Carrie Bradshaw would approve; Emmeline Pankhurst, not so much. Penny Mosgrove, the chief executive of Quintessentially Estates, a company that sells houses starting at £3 million and rising to £20 million, says that among her clients glam rooms are a must-have. If one doesn’t exist, some wealthy buyers will sacrifice a bedroom to create one.
The estate agent Charlie Gibson, who works in the Mayfair office of Carter Jonas, reports that he has also seen properties with a male equivalent, called grooming rooms. “I have seen a barber shop set-up within a very expensive property, where the Mayfair barber Geo F Trumper visits for a grooming appointment,” Gibson says.
It is common for the incoming president and the first lady to redecorate parts of the 132-room political mansion. The Obamas filled the property with contemporary art and replaced a bust of Churchill with that of Martin Luther King; Laura Bush faithfully restored the Green Room, used for small receptions and teas.
As with the presidential campaign, the Trumps may do things differently. Based on the interiors in the family’s New York home, the glam room — possibly like the rest of the house — will feature a 1980s aesthetic, with lots of gold, ostentatious chandeliers and pictures of Donald Trump in manly poses.
The interior designer Mhairi Coyle says: “It is like the interior design you see in casinos: the more detail, the more pattern, the more colour you can put in the place, the better. With a personality like Donald Trump’s, he’d want everything over the top.
Some locations are defying a downbeat Brexit market — with revived urban areas leading the way even at the best of times there are no sure things in property — and with political and economic uncertainty as a backdrop, coupled with tax changes that have hit many buyers hard, this is far from the best of times. Nonetheless, there are silver linings amid the dark pall that has hung over the market since last spring.
Some areas set to benefit from transport improvements, some are the focus of multimillion-pound regeneration projects, while others are simply benefiting from a strong ripple of buyers moving from more expensive areas, pushing up prices.
You may not have heard of them all — yet — but if the experts are to be believed, these are the locations that will lead the market in 2017 and beyond.
Southern Gateway, Manchester
Close to Manchester Metropolitan University and the University of Manchester, the Southern Gateway is set to follow the city’s Northern Quarter success story of regeneration and price growth.
The Gateway, to the south of the city centre, has an impressive development pipeline of 7,500 homes to be built in the next few years. Nick Whitten, an associate director in JLL’s residential research department, says that this emerging neighbourhood is not going to be a sea of flats; it already includes the £25 million HOME arts complex, and there are plans for enough shops and restaurants to turn it into a “destination”. With tram and rail links already in place, the Southern Gateway has great connectivity, and Whitten forecasts that prices will grow 7 per cent in 2017 and 28 per cent by 2021. Today you can pick up a one-bedroom flat for £145,000.
Bishopthorpe, York
The redevelopment of the old Terry’s chocolate factory close to York Racecourse into luxury flats, and a smart restaurant and shop, is focusing buyer interest along Bishopthorpe Road.
Ed Stoyle, a partner at Carter Jonas, believes that the development — The Residence — will help to push local prices up 5 per cent this year.
“We’re advising buyers, from first-timers to investors, to act because, once the amenities are in place towards the end of 2017, a premium will be added to asking prices in the area,” he says.
Michael Redmond, the managing director of Redmove estate agency, says that York is set to benefit from the HS2 rail link and agrees that “Bishy Road” will be the focus of growth next year. A two-bedroom terraced house costs about £300,000.
Carmarthenshire
Historically overlooked in favour of neighbouring Pembrokeshire, Carmarthenshire has appealingly low prices. In Carmarthen town, things have been looking up since the £74 million St Catherine’s Walk shopping centre opened in 2010, and in 2018 electrification of the Great Western Main Line will cut journey times to London Paddington by half an hour.
“It is also within a few minutes’ drive of the glorious coastline, beaches and rolling open countryside,” says Carol Peett, the managing director of West Wales Property Finders. “With excellent schools, a hospital and the University of Wales Trinity St David, S4C television studios, as well as theatres, restaurants, cinemas and shops, Carmarthen town is a vibrant place to live.”
For those looking for a quieter life, Carmarthen has tranquil outlying villages such as Laugharne and Llansteffan. A modest three-bedroom house in Carmarthen or a nearby village costs between £110,000 and £115,000. For £500,000 you can buy a family house with generous outside space.
West Kilburn, north London
Look beyond the resolutely tatty Kilburn High Road, and Kilburn has plenty going for it — period houses, leafy streets and posher areas all around.
Jo Eccles, a buying agent and managing director of Sourcing Property, believes that homes in West Kilburn are particularly good value, at about 20 per cent below those in neighbouring Queen’s Park and Maida Vale. “Four years ago, when we started buying there for clients, that price gap was closer to 40,” she says. “We expect the price gap to completely close over the next three to five years.” Today a two-bedroom flat costs about £550,000.
Woking, Surrey
It’s far from the most posh of commuter towns in Surrey, but the £550 million being thrown at Woking in the form of new homes, town centre upgrades and road improvements will boost its profile. Commuters can be at London Waterloo in less than half an hour. Woking’s average prices — about £375,000 for a two-bedroom flat and £475,000 for a three-bedroom house — are fantastic value compared with the capital.
Sudbury, Suffolk
The impact that buyers leaving London can have on prices in the commuter belt is well known, but Alan Williams, the managing partner of Fenn Wright, is putting his faith in the “double ripple” — buyers moving on from well-known commuter towns, farther out into the sticks. “These movers will compromise on travel if that means they can reside in a town that retains its traditional feel and charm amid beautiful surroundings,” says Williams.
Commuting from Sudbury isn’t horrendous; trains to Liverpool Street take 71 minutes. “Buyers get more house for their money and a lifestyle that many wouldn’t exchange for one of the busy commuter towns,” says Williams. It won’t only be London workers eyeing Sudbury; Bury St Edmunds and Cambridge are within commuting distance.
East Leeds
Rather like east London, the suburbs of east Leeds are finally blossoming, with areas such as Cross Gates, Colton and Rothwell experiencing price growth of 4.2 per cent in 2016. “They are traditionally affordable locations, yet all have good retail offerings within their centres,” says Andrew Hunt, a partner at the Allsop estate agency. He believes that price growth will continue in 2017, thanks to good city centre transport links and development of the nearby Thorpe Park business centre, with its offices, shops and homes. “We would expect in the next year house prices to rise in each of these suburbs by a further 4 to 5 per cent,” says Hunt. The average house price is £182,000 in Rothwell, £186,000 in Cross Gates, and £229,000 in Colton.
Edinburgh city centre
A lack of supply is driving up prices in beautiful Edinburgh, and for this reason Nick Whitten, of JLL, believes that they are likely to grow by 5 per cent in 2017 and by 23 per cent by 2021. Prices start at about £160,000 for a one-bedroom flat. Although there are several significant regeneration schemes on the cards that will deliver necessary new homes in the city, Whitten says that most will not be ready until 2020. “However, the seven-and-a-half-acre New Waverley and 1.7 million square foot Edinburgh St James regeneration schemes are transforming a large area of the city centre,” he adds.
Cambridge
The city has enjoyed extraordinary price growth of 61 per cent in the past five years, but there is still plenty in Cambridge’s tank, according to Martin Walshe, the director of the estate agency Cheffins. He describes the market as “incredibly healthy”, and expects price growth of about 5 per cent next year. “If we have a strong Brexit deal, I forecast a return to the days of price growth at astronomical levels,” he says. “If Europe drives a harder bargain, Cambridge prices will grow, but probably in a more sustainable manner.” All eyes are on the north of the city thanks to Cambridge North station near the Science Park, which is scheduled to open in May.
Garston, Liverpool
Already close to the Jaguar Land Rover factory, Garston will benefit from jobs created by the expansion of Liverpool airport. It has a station, with services to the city centre taking about ten minutes. Stuart Law, the chairman of Assetz Property, expects price rises of 10 per cent over the next three to four years. “A two-bedroom flat costs about £90,000 and Assetz expects that to be £100,000 by the end of 2019,” he says. He expects that three-bedroom homes, which are averaging £150,000, will increase to £170,000 in the same period.
Other areas on the way up
Preston, Lancashire
Electrification of the train line to Manchester by December 2017 will make this junior partner in the Northern Powerhouse a more commuter-friendly option.
North and South Moreton, Oxfordshire
These are two desperately pretty villages three miles from Didcot Parkway station. Electrification of the Great Western train line will reach Didcot by the end of 2017, making the London commute faster.
Tottenham Hale, north London
With 10,000 new homes, 5,000 more on the cards and the possibility of a Crossrail 2 station, this is the London suburb du jour, says Camilla Dell, the managing partner at Black Brick.
Bracknell, Berkshire
This commuter town is getting a shot in the arm in the shape of a £240 million regeneration. The Lexicon shopping and leisure centre opens in September.
Canterbury, Kent
Planning consent has been granted for 4,000 homes in this growing cathedral city. Humberts forecasts that prices could increase by £35,000 a year in the short and medium term.
Old Oak Common, west London
Plans for 25,000 new homes, two new stations and a railway hub make this industrial wasteland the capital’s biggest regeneration project since Stratford. The knock-on benefits should be felt in the surrounding areas of Park Royal, North Acton and Willesden Junction, where pretty railway cottages cost between £500,000 and £600,000.
Southampton waterfront
Work on the £450 million Royal Pier Waterfront development, featuring homes, shops, restaurants, a casino and hotel, will start in 2017.
The biggest talking point in 2017 will be triggering Article 50 to begin the process of Britain’s exit from the EU, and what immediate effect this might have on property prices and the value of sterling. We also predict that as new tax changes start to take hold for private landlords in April 2017 we may start to see some landlords sell their properties, but with a low interest rate set to prevail, any wide-scale sell-off will likely be avoided.
In the final few months of 2017, we will start to see the first completions of the former BBC Television Centre, also known as TVC, where we have acquired seven new apartments for clients. While we wouldn’t always recommend our clients buy new-builds, we have been big advocates of TVC owing to the fact that the development is part of the wider regeneration of the White City area.
It ticks a lot of boxes in terms of what we look for when advising clients. These include proximity to fantastic transport links [Wood Lane and White City tube stations are on the doorstep], Westfield, which is also undergoing a John Lewis expansion and will become one of Europe’s largest shopping centres, and Imperial College is creating a major new campus at White City, including more than 2 million sq ft of new offices and restaurants.
The development itself will also be home to a Soho House hotel and private members’ club, a 20,000 sq ft gym and spa run by Cow Shed, and at some point in 2017 the BBC will resume making television programmes on the site having vacated temporarily to allow the redevelopment to take place. Clients of ours who bought into the scheme in early 2015 have already seen a 10% uplift in the value, and we are encouraged by the fact than unlike a lot of other new-builds, there is so far very little evidence of buyers trying to sell on their contracts before completion. I think a lot of people are buying into a new lifestyle and as such see these investments as a long-term hold.
In terms of other London neighbourhoods to look out for, Tottenham is increasingly popular at the moment as first-time buyers and investors seek value. The area is also very well connected, being on the Victoria line and with a station on Crossrail 2 planned for Tottenham Hale. According to Rightmove, sold prices in Tottenham Hale in 2016 were 14% up on the previous year and 50% up on 2013, when the average house price there was £229,063.
Haringey Council has committed to building 10,000 new homes and providing 5,000 new jobs in the area by 2025, and has secured more than £1 billion of investment. More than 1,100 affordable and private homes plus student accommodation have been built at Hale Village, two new schools are planned, while Tottenham University Technical College opened at the end of 2014.
For design and interior trends, the latest buzz word is ‘wellness’. With so many of today’s buyers of high-end property concerned about their health, creating wellness spaces within homes and new developments will become more important. It’s not just about creating a spa or gym, it’s also about offering the right programmes – yoga retreats, healthy eating plans etc, are all part of this.
There was lots of talk around the US presidential election that if the controversial Republican candidate Donald Trump won, as he did, many horrified Americans would up sticks and leave as soon as possible, with London likely a popular destination.
And if you are so minded, there are plenty of good reasons why, aside from fleeing the Trumpian tyranny: the shared language, a similar culture, London is a vibrant world city with great schools, and the US dollar is unusually strong in relation to sterling due to Brexit. But has in the wake of the election result there been a sudden spike in interest from American buyers looking at London? There’s little evidence to suggest so.
“We haven’t noticed any measurable increase in activity from US buyers,” Brendan Roberts, director at the estate agent Aylesford International, told IBTimes UK. “I think it’s highly unlikely to happen. Trump is president elect and until his policies are clear and understood, I don’t suppose we will see any great reaction in terms of Americans relocating.”
A spokesman for the estate agent Knight Frank there had been “no obvious change at this stage” in interest from US buyers in reaction to the election result. Similarly, a spokeswoman for the buying agent Black Brick said there had been no spike in interest from US buyers after the vote.
But Camilla Dell, managing director of Black Brick, said after the election that the firm is “likely to see some wealthy US citizens, particularly those most offended by Trump, move to the UK as some of our American clients hinted to us prior to this outcome.”
“Whilst we have seen a list of LA pop stars who vowed to leave the US if Trump was elected, to date this has not materialised,” said Alex Newall, managing director, Hanover Private Office, an estate agent. “We have seen a small number of the business elite from around New York making enquires for homes in London – particularly Prime Central London in areas such as Belgravia, Knightsbridge and Mayfair.”
A Trump-driven exodus may happen eventually, but it all depends on how much the reality of his presidency lives up to his deeply divisive campaign rhetoric. “We may not see an immediate move, as President elect Trump’s transitional team start their work, but already the markets have reacted badly,” said Charles Curran, principal at Maskells, a London estate agent, in the hours after Trump’s victory.
“However, our view is that there may be a small knee-jerk reaction to his win, but if Americans are to move to the UK in significant numbers, it will be after he has taken office and established what the relationship will be like between the Republican House and Senate.”
“As Donald Trump doesn’t take office until January, any increase in American buyers will be dispersed over the coming months,” said Nick Davies, head of residential development at Stirling Ackroyd. “However, the chronic shortage of properties in London means that any additional competition to buy or rent homes could push up prices.”
“It is impossible to know how a Trump government might affect the global economy and, in turn, the prime London housing market,” said Jonathan Hewlett, head of Savills London, an estate agent.
There is a more subtle sign of what may come than immediate calls to estate agents. Zoopla, the property listings website, said its web traffic from America on 9 November — the day after the election — was 45.3% higher than the average for the previous 30 days and 25.5% higher than the average for the past six months.
“With the outcome of the US presidential election result now behind us, early indications show that Americans may be looking at setting their sights on the British property market as the election result brings uncertainty for some,” said Lawrence Hall, spokesman for Zoopla.
“Unsurprisingly, London tops the list of the most popular search terms with American home movers over the last six months and several locations in the hotly sought-after Prime Central London market – including Chelsea, Hampstead and Marylebone – are some of the capital’s most searched for residential areas by Americans.”
Donald Trump was elected the President of the United States early this morning, in a surprising victory that saw the property developer and reality TV star beat Hillary Clinton to the White House. With a real estate veteran set to reside in America’s most famous house, what does Trump’s win mean for property in the USA and overseas?
Since the news that Clinton had conceded the race to the White House, the property industry has been weighing in with its reactions – and many believe that Trump’s victory could help make Britain’s real estate appeal great again.
“The US economy remains the force that sets the pace for the rest of the world. Even with the rise of China and the growth of other emerging markets, America is still the strongest economy in the world,” says Jean Liggett, Chief Executive Officer of agency, Properties of the World.
With uncertainty surrounding Trump’s policies and what his term in the Oval Office will be like, Liggett, like several property professionals, believes that Trump’s election could drive investors to consider alternative markets, such as London.
“The uncertainty in the US economy that will prevail till the new policies are formalised and laid down could spur increasing amounts of interest from the cross border real estate investors into markets such as Australia, Japan, Europe and India,” predicts Shishir Baijal, Chairman amd Managing Director, Knight Frank India.
“Trump’s victory may well prove beneficial for the UK property market, as investors seek to migrate their portfolios from the US to a more secure and predictable market – the UK,” adds Liggett.
London Central Portfolio also forecasts that “there will be a net positive impact on the market as investors retrench to blue-chip tangible assets”, with gold, the Yen and Swiss Franc forecast to benefit from safe haven demand.
Camilla Dell, Managing Partner at Black Brick, tells TheMoveChannel.com: “Following the victory of Donald Trump in the US election, we will almost certainly see market turmoil and weakening of the dollar. As a result, global investment into Prime Central London (PCL) property is likely to increase from investors who hold the view that Trump is risky for the markets. Indeed, we are already seeing a flight to safe haven assets such as gold this morning and PCL property has always been seen as a safe haven asset in turbulent times.”
Samuel Blake, residential partner at Montagu Evans, also tells The Standard that the UK capital could become a new target destination for “wealthy people who would have considered a move to New York City, in particular from the Middle East, Europe and China”.
The weakness of the pound against the dollar since the UK’s Brexit vote this summer has already prompted speculation that American investors will increasingly snap up the relatively affordable property in London and the UK. Trump’s victory “might level the playing field with the Brexit scenario”, Elisabeth Troni, head of EMEA research at property broker Cushman & Wakefield, told the WSJ.
Nonetheless, Brexit has also demonstrated that market fundamentals are not immediately transformed by wider political changes, as property activity in the UK has begun to show signs of stabilising after an initial slowdown, according to the RICS, and low levels of supply are predicted by JLL to continue underpinning house prices over the next five years.
It may be, therefore, that Trump’s victory does not dent the US property market’s attraction in the long-term. Since the election result, the dollar has weakened against other currencies, giving international buyers more spending power in America’s real estate. Indeed, the greenback’s recent strength was cited by the National Association of Realtors as a factor that caused international investment volumes to dip slightly year-on-year in March 2016.
In the US, 54 per cent of property professionals in a survey by portal Juwai.com said they thought a Trump presidency would increase Chinese investment in American property. Matthew Moore, the site’s President of the Americas, said that Chinese buyers would be “here to stay”, regardless of the election result.
Either way, with Trump not due to be sworn in until January 2017, it will take time for the full impact of Trump’s victory to be seen.
We are seeing vendors and agents become more realistic with pricing, and the market has now largely absorbed the Stamp Duty increases that came into force last April, so buyers are wanting to get on and purchase.
Some locations are defying a downbeat Brexit market — with revived urban areas leading the way even at the best of times there are no sure things in property — and with political and economic uncertainty as a backdrop, coupled with tax changes that have hit many buyers hard, this is far from the best of times. Nonetheless, there are silver linings amid the dark pall that has hung over the market since last spring.