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What’s next for the UK luxury property market?

“With buyers and sellers still digesting what is going on, the UK housing market is a mix of those carrying on and those taking time to reflect – and mortgage status is playing a big part in that.”

That’s the view of Tom Bill, Knight Frank’s Head of Residential Research, commenting on the market disruption and mini budget delivered by Liz Truss’s new government a few short weeks ago.

Increasing mortgage costs and the wider cost-of-living crisis are now beginning to exert significant downward pressures on a rampant housing market that’s soared 23% since the onset of COVID-19 pandemic1.

“We’ve just experienced once-in-a-generation wealth creation through property, especially outside London, and with the cost of living and borrowing increasing a degree of correction is likely to take place – however, it’s also worth noting that there is still a supply problem, especially in London,” says Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank.

Britain’s mortgage burden, or the proportion of income spent on mortgage repayments, is another red-light flashing for the UK property market – with the average mortgaged household now left with “little or no wiggle room in their budgets”, according to UK Finance2. Estate agents are also busily revising their forecasts, with Knight Frank now expecting price falls of 10% over the next two years. While recent data from Zoopla suggests that demand for homes in the UK has fallen by a fifth since the mini budget3.

However, this cooling of the market is not expected to be uniform and across the board. It’s more nuanced than that.

 

London’s golden postcodes to shine once more?

Some of the UK’s high-end property markets could be better positioned to ride out any market uncertainty.

The dynamics of the prime central London market are a case in point. Wealthy buyers there tend to be cash-rich – two-thirds of all transactions in the golden postcodes of prime central London are purchased outright, according to the latest Savills deal-book data4 – while the capital’s high-end apartments and houses have long been a magnet for foreign investors, especially those now looking to use the strong US dollar to find good deals in the UK thanks to the weaker pound.

It’s also been a subdued market in recent times. Average prices in prime central London are still 13% below their 2014 peak5; by comparison, property prices across the rest of the UK have increased by more than 50% over the same period, and now stand at all-time highs6.

Prior to 2014, however, prime central London property unabashedly outperformed – generating returns of 300% in just two decades7. But it’s been something of a slog these last eight years. Everything from Brexit to tax burdens, a wide-spread escape to the country during COVID-19 and then the slow post-pandemic return of foreign buyers. Yet prices are now finally ticking upwards once again on the lure of London and return of city living, with annual growth of 2.3%, according to Savills8, despite a war in Ukraine and the uncertain economic backdrop.

“Obviously, any further recovery may now be put on hold due to the rising cost of debt and what it means for the wider economy – and if there’s a prolonged slowdown in activity – but prime central London property still remains pretty compelling especially if you’re buying in US dollars,” says Lucian Cook, Head of Residential Research at Savills.

Recent data from Knight Frank estimated that the effective discounts for US dollar buyers – or those from countries with currencies pegged to the US dollar, such as Hong Kong and many parts of the Middle East – are as much as 50% when compared to 2014 levels, with the largest discounts to be had on properties in Kensington, Chelsea and Notting Hill5.

Please note: Past performance is no guarantee of future performance.

 

But it’s the more domestic-oriented markets, where most homeowners have mortgages, that could experience significant price reductions in the months ahead.

“If you take Fulham as an example, and I really like the area, in the last financial crisis it was Fulham and areas like that which took the biggest price hits,” says Camilla Dell, Founder of central London buying agency Black Brick.

“It’s a very domestic market, with most people who buy taking on debt. All the properties and streets look broadly the same, with properties priced between £1.5 million and £3 million. But we think it’s these markets that are vulnerable to rising mortgage rates – with people not buying, and people needing to sell and lowering their prices in order to sell.”

 

The crunch from rising rates

During the era of ultra-low interest rates, it often made financial sense for someone who could afford to buy a property to take out a mortgage instead – to not only help with tax planning, but also so that assets were not locked up in property.

But with mortgage rates pushing up to 15-year highs, it may now be worth considering different strategies.

“There are a lot of factors at play right now,” says Cook at Savills. “It’s creating a mixed picture for what’s motivating buyers and sellers, and it’s all affecting relative spending power. That’s why good communication with your lender is absolutely crucial.”

 

Boom time for London rents

London’s high-end rental market has also seen something of a resurgence in the last 12 months – characterised by high demand, low stock and the return of overseas tenants. Average monthly rents are up 15.8% on last year, according to Rightmove9.

“Rents took quite a hit during the pandemic in central London,” says Dell at Black Brick. “But there’s a complete reversal of that trend now. The good news is that if you’re a landlord and don’t have much debt, you’re probably going to see some healthy returns coming through your property.

“And for those people looking at their options if they’re about to sell their house – becoming an accidental landlord and letting out their property could now be a tempting option especially with a weaker sales market.”

 

How likely is a house price crash?

UK house prices have suffered only two significant corrections in the last 40 years10. During the early 1990s recession with interest rates spiralling, house prices fell by more than a third11. While the great financial crisis of 2007-09 then wiped 20% off the value of UK property in just 18 months11.

But despite these shocks, UK house prices have been on something of a remarkable trajectory these last four decades – rising a staggering 1,300%10, six times the rate of inflation12. As history shows, the boom times certainly outweigh the busts (albeit past performance is never a guarantee of future performance).

The UK property market has a history of resilience. During the height of the pandemic, there were dire warnings from the Bank of England that property prices could crash following a near-total shutdown of the market13 – but not even COVID-19 could cool the red-hot market that followed. And as the pandemic has also shown, mortgage lenders now have more tools at their disposal that suggest they could act in similar ways again to curb the severity of any future downturn.

“There are good reasons why the impact on the market may not be as severe as in previous downturns,” adds Cook at Savills. “Lenders have learnt lessons from the pandemic and indeed from the 1990s. Mortgage affordability has also been stress-tested, so banks know homeowners should be able to absorb much of the impact of higher interest rates, even if they need to change their spending patterns.

“The key variable is how far rates go up and how long they stay there. If things stay higher for longer, there’ll be more stress on household finances for a longer period. But we’re still a little way away from that and before we make those judgement calls, we need to see how the mortgage market settles down, and how lenders respond.”

An aerial shot of the cityscape of London at daytime

Race for space is over, says buying agency

Black Brick has been ‘inundated’ with requests for classic two-bed flats around Hyde Park – and buyers aren’t even asking about a garden or balcony…

It was one of the key market trends to emerge during the pandemic, but a top buying agency has declared the “race for space” to be over.

“Now that the memory of long periods of lockdown is fading, the demand for larger homes with gardens, or at the very least flats with terraces or good sized balconies, appears to be petering out,” said Black Brick in an update to clients.

Camilla Dell: “I think that we can confidently say that the race for space is over”

The Mayfair-based firm has seen soaring demand for centrally-located pads, marking quite the turnaround for this type of stock.

“I think that we can confidently say that the race for space is over,” said managing partner Camilla Dell. “Flat searches are back on, when 18 months ago the market for flats was tumbleweed. Now our biggest request if for a classic two bedroom flat in a good building around Hyde Park. We are just inundated.”

First time buyers and students – often generously backed by the bank of mum and dad – are back out in force, along with those after a pied-à-terre, said Dell. “These buyers don’t even ask whether it has a garden or a balcony.”

Other firms have also picked up on a revival in PCL’s apartment market.

In August, London House reported that 78% of all prime London sales in 2022 had involved flats, compared to just 68% in the second half of 2021.

Investment firm London Central Portfolio recently suggested that buyers may look to capitalise on depressed values in the PCL apartment market, noting that while house values are just 1.7% below their 2015 peak, apartments are still 9% below. Urban living has regained its appeal for many prime buyers this year.

The latest price readings from Savills show the impact of returning demand for urban living across the capital.

The prime housing markets of north and east London, left behind during the race for space, were the strongest performers in the last quarter. By contrast, the leafier prime markets of south west London rose by just 0.3% over the last three months, the lowest quarterly price growth seen in this region in two years.

Knight Frank is confident the “escape to the country” trend will continue to support prime regional UK markets for the rest of the year, but is now forecasting a 5% drop-off in values next year.

Further Reading

How the race for space changed the PCL landscape April 2021.

Foreign Buyers Swoop in to Snap up London Homes Going Cheap

By Melissa Lawford

Dollar buyers cash in big savings as pound plunges

A plunge in the pound this year has brought a rush of American buyers hoping to snap up prime London homes with tens of millions in dollar discounts.

Demand from wealthy overseas buyers spiked following Chancellor Kwasi Kwarteng’s “mini-Budget”, which caused the value of the pound to tumble to a record low after it sparked fears of even higher inflation.

Sterling has since recovered to the level seen earlier in September, but it is still down by a fifth compared to its high in May last year.

Thea Carroll, a London buying agent, said: “The dollar buyer situation at the moment is a bit overwhelming. In the last three weeks it has hit a crescendo. [After the mini-Budget], the general consensus was that the opportunity cost of missing the currency exchange was greater than the future economic headwinds.”

Ollie Marshall, of buying agency Prime Purchase, noted a London house that was marketed new with a £55m guide price in 2016. When the pound was at its peak against the dollar in June 2016, just before the Brexit referendum, this was equivalent to $81m.

Since 2016, PCL house prices have fallen. The property has also lost its new build premium. Now, it is on the market for £35m.

When the pound hit a record low against the dollar on the Monday after the mini-Budget, with an exchange rate at 1.035, for an American buyer, this property cost $36m.

This was a saving of around $45m compared to five years ago – a drop of 56pc.

 

The Pounds Plunge Means Dollar Buyers Make Big Savings.

“Within 24 hours, my client was viewing the house, having flown 5,000 miles to see it,” Mr Marshall said.

Even if the sterling price of the property had not changed, a dollar buyer would have saved $24m compared to if they had bought at the 2016 peak.

The pound has since stabilised a little. Last week, the house’s dollar value was $40m.

Roarie Scarisbrick, of Property Vision, a buying agency, said: “Obviously there has been a pick up. Whenever there is a suppressed pound, the phone starts ringing. There are definitely a lot of people thinking this is deal time.”

He added: “In areas like Mayfair, Belgravia and Knightsbridge, the international-type properties that have been sat around for the last two years are now being hoovered up because of the currency rates.”

The British economic outlook might be turbulent, but London still looks favourable to some overseas buyers, Ms Carroll said. “The flight of Russians to Dubai means prices have become extortionate there.”

Camilla Dell, of London buying agency Black Brick, said: “The currency exchange rate has definitely helped. We can say to our clients that their stamp duty bill is effectively paid, compared to if they were buying this time last year.”

International buyer numbers plunged in the wake of the pandemic. At the start of 2020, overseas buyers accounted for 49pc of all sales in prime central London, according to Hamptons estate agents.

That share hit a low of 35pc in 2021, but then bounced back this year. In the first six months of 2022, the international buyer share in PCL was 48pc.

“Last year, 80pc of our clients were domestic. They were looking for family homes in the suburbs. Now that has been flipped on its head and at least half of our buyers are internationals looking in central London,” Ms Dell said.

“It’s Americans, buyers from the Middle-East, and from Africa – people who have made their money in oil and gas, in industries pegged to the US dollar, which are benefiting from the current crisis,” she added.

Yet the jet-set is not necessarily rushing to sign transaction contracts – they are circling.

“People are stockpiling sterling, getting ready to deploy when they have more clarity on the market,” Mr Scarisbrick said.

Ms Carroll said: “I am telling my clients to change their money now and acquire when the market is right.”

She noted buyers with budgets of £14.8m and £7m who exchanged their dollars into sterling.

Wealthy internationals are less dependent on the mortgage market, meaning buyer demand will be a little more shielded from the blow of rising interest rates.

“Prime central London markets tend to be underleveraged and much of the borrowing tends to be more related to tax and structuring,” Mr Marshall said.

But Mr Scarisbrick cautioned that the sector would not be immune to the turmoil of the past week and expectations for big rises in rates.

“They have a great win on the currency, but these people still need to borrow, it is not a pristine moment,” Mr Scarisbrick said.

The British Pound Is Sinking—and Its Luxury Market Is Rocking as a Result

By Mark Ellwood

Want to save 20 percent on a Newman Daytona, a bespoke suit or a suite at Gleneagles? Go ahead.

It was the second Paul Newman Daytona that David Silver had sold for £275,000 in less than two weeks that proved decisive. Silver owns the Vintage Watch Company, a Rolex specialist dealer that sits in tony Burlington Arcade, that two century-old strip of luxury boutiques in London’s Mayfair. Despite his British base, many of Silver’s customers are Americans—including both the Newman collectors. “They were clients who’d always hovered around wanting that watch, and never quite done it,” he says, of the much-prized model that he’d usually sell once every six months or so, perhaps, “But they saw they could save 15 percent just because of the dollar exchange rate right now, and that made them feel good about finally buying one.”

Those two canny watch collectors aren’t alone. Britain’s sterling has been wobbly on global markets since the unexpected result of the Brexit vote spooked currency watchers and drove it down by 20 percent or so against the dollar six years ago. But political turmoil in the UK, marked by the arrival earlier this month of its fourth prime minister since 2016, has caused even greater shocks. Initially, it dinged sterling down to $1.15 or so against the dollar, seemingly bottoming out there. Yet a risky fiscal gamble by new chancellor (and former financial analyst) Kwasi Kwarteng on Friday managed to worsen rates to historic lows which reached almost parity ($1.03 to £1) in early trading yesterday.  It was the lowest sterling’s slumped against the dollar since decimalization in 1972.

British luxury firms are seeing surges of business from dollar-touting buyers in response. “Our message to brands is that whatever you’re putting into your marketing, divert it to the US,” says Helen Brocklebank who runs British luxury trade association Walpole, “There’s already a strong customer base there, and a great deal of existing love, so you’re pushing on an open door. This is a chance to get that door pinned back on its hook, and stay wide open.”

Watch dealer Silver agrees; he estimates his business is up 30 percent this month versus September 2021.  He notes the coincidence of the Queen’s death, which had brought tourists to London who could then spend their powerful dollars in situ, and stresses that the UK’s role in luxury has always leaned more heavily on production than consumption. “The UK as a luxury marketplace is poor in comparison to the rest of the world—it always has been,” Silver says, noting that boutiques in Bond Street and around are mostly buoyed by tourists; Walpole’s data says that the luxury sector was worth £48bn to the UK economy when last surveyed, in 2019. Certainly, 75 percent of David Silver’s business comes from overseas, though he notes that some of his dollar-spending buyers don’t live in America: Some might be UK-based and paid by a US corporation, while others are from Asia, where currencies follow the dollar closely. Those customers are vacuuming up rare timepieces with gusto, he notes, since they’re well aware this is likely a window to buy. “It’s a temporary thing, because if this carries on, in two or three months, we’ll have to put our prices up and the benefits will be eroded,” says Silver, “But right now, they’re taking advantage of it while it’s there.”

Other luxury sectors have seen similar sudden upticks as he has in watches—the world’s secondary market for wine, for example, is traded in pound sterling, making snapping up a magnum or two right now a relative steal, notes Liquid Icons expert Lewis Chester. It’s timely that British sparkling producer Gusbourne Estate just released Fifty-One Degrees North, which costs £195 per bottle, he adds, which prices it alongside the most prestigious cuvée champagnes—or it did, until the recent tumble. “Older collectible malt whiskies are clearly in a boom,” he adds, “Like fine wine, rare whisky is seen as an inflationary hedge as a real asset, and also a currency hedge with price movements tending to be inversely correlated with the strength or weakness of the local currency.”

Edgar Harden runs the Old Spirits Company, where he hunts down such elusive one-offs across the liquor spectrum for a raft of global collectors. He’d been chatting with an LA-based buyer since June about a 4-liter bottle of Suntory from the 1970s, priced at £1,950. “The change in the exchange rate pushed them over the edge about two weeks ago,” he tells Robb Report, noting that his business this quarter is around one third higher than the same period next year, and a third of those buyers are new customers. Orders have increased since May, Harden continues, but August was the banner month—at least until now, with September likely to outstrip it. “The US has always been the most important market for my goods, but now it’s completely dominant because of the exchange rate,” he says.

The same is true on Savile Row, where tailor Simon Cundey of Henry Poole reports that many American customers have called him up in recent weeks and pre-paid for clothing that they’ll order when he arrives on a tour to New York, DC, Chicago and Boston starting next month. It’s been such a success, in fact, that Cundey says the firm is planning several Instagram activations this week to highlight the sterling-related advantage. “Anything around $1.40 to the pound has always been great for us, but it was at about $1.15 to the pound that people started calling up to pre-pay, but $1.10 or lower is a golden ticket,” he says, adding that it’s lured back many customers he hasn’t seen for 10 years or more. Buyers are increasing the volume of orders: four suits rather than one or two, or perhaps a sport coat and trousers alongside a suit.  A custom customer has typically been trading up, too, enjoying bespoke for the first time—and Cundey suspects they’ll stick with the higher priced option even as currencies return to more normal levels.

Nearby Lock & Co, the country’s foremost hattery, reports a similar surge in business, per MD Ben Dalrymple, who says that one sale this summer to an American was especially touching. It was a Californian visitor, whose father had owned a Lock & Co Coke hat (or bowler in common parlance).  “He had always wanted to own one of his own, for sentimental reasons, but he could never quite justify spending the money on something he thought he would not wear that often,” Dalrymple said, “But when he visited London this summer, he made a special visit to the shop and made the purchase, as it was proportionately much better value.”

Real estate isn’t immune to the impact, either, according to Black Brick partner Caspar Harvard-Walls, who specializes in premium central London (PCL) real estate. He says that 2020 and 2021 were dominated by domestic buyers, as a result of the pandemic which meant PCL, usually bought by foreign buyers, was soft. Q1 2022 saw the trend reverse in PCL: there was a 7.7 percent increase in the number of transactions above £5m in that period versus the same a year earlier.

After the usual summertime lull, Harvard-Walls continues, September has been unusually busy. “People buying second homes don’t decide to do it yesterday, but clients who were already thinking about buying are fast forwarding what they were doing,” he says. “I had a client three weeks ago, who purchased from us at the beginning of the pandemic and has just done his flat up, say to me ‘If you’re a dollar-based buyer and not going to be buying now, the question is when?’” Harvard-Walls also says he’s seen dollar-based UHNWers buy up sterling now that they don’t intend to disburse immediately. “It’s going to have a long-term impact on London. They might sit on their pounds for two years because they don’t have to do anything tomorrow,” he adds, “Property takes a long time to transact. So we won’t know the real result in this sector of what we’re talking about now until at least Christmas or the New Year.”

Kenneth Bening, who owns British caviar brand Exmoor, points to the increase in appeal for investment in his company from deep-pocketed US-based backers “We’ve got interest from potential suitors from the US, I’ll put it that way,” he tells Robb Report, cryptically. And Leo Turner from Heraldic crest specialist and luxury stationer Downey says his US-focused business is up 10-15 percent, whether by mail or Americans visiting in person. Many of them, it seems, may have taken a trip on a whim—or so Conor O’Leary, MD of Scottish hospitality icon Gleneagles, would predict.

He says that business at his original property, the golf-centric resort where Americans are the bulk of his clientele, will usually taper off by Labor Day or so (The new city center Townhouse is primed for more year-round business in central Edinburgh). Not so this year. “They’re still coming, well into September and October, and to Christmas, which is not typical at all,” he says, “And before, the typical American business would come to us six months out at least. Now, we’re seeing a really short lead time, where they make a quick decision to come over to the UK—people coming in October are booking as we speak, so it’s an ad hoc decision to jump on a plane to come on holiday. That’s what gives us the clue it’s about currency, as well as the volume.” British luxury chain Firmdale, known for properties like Ham Yard Hotel in Piccadilly, reports a similar pattern. “There’s very little rate resistance,” says director of marketing Craig Markham of dollar-based bookings, “The US represents the largest leisure and corporate sector for us, and bookings from the US are showing no signs of slowing down.”

They should continue at breakneck rates, too, even if the currency stabilizes as expected—most of these luxury-sector insiders said they presume sterling will climb back to $1.20 or $1.25. Buried in chancellor Kwarteng’s announcements was a stealth U-turn on a policy enacted by his predecessor Rishi Sunak in early 2021. Sunak abolished the ability for tourists to reclaim their VAT, or sales tax, claiming it would claw back billions for the British taxpayer; Kwarteng’s decision to reinstate this perk, likely from early 2024, has received  accolades from the luxury industry in the UK. It responded with horror at Sunak’s decision, and has spent the months since campaigning for its reinstatement, as Walpole’s Helen Brocklebank explains.

Walpole partnered with Bain on an extensive tourism report in 2019, which showed that UHNW tourism to the country was worth £30bn. The value isn’t simply in shopping: for every £1 a high-end visitor spends on goods, £8 is generated for the rest of the economy via hotel suites, high-end dinners and the like. International visitors to Europe typically visit 2.6 capitals, and London or Edinburgh had always been mainstays on those visits. The abolition of VAT-free shopping drove them more to Madrid or Milan, where they still enjoyed an EU-mandated tax-free spree.  “It’s a powerful ecosystem,” Brocklebank says, “Luxury could see how brilliantly we could contribute to post-pandemic recovery as a sector, yet the removal of that incentive was a huge impediment. One of our smaller but iconic whisky brands was regularly missing out on £100,000 per week in lost sales because of it.”

Henry Poole’s Simon Cundey calls the decision to allow visitors to Britain this same perk again “the icing on the cake.” He notes that he had several American bespoke clients who were caught off-guard when Sunak’s law change came into effect between fitting and completion. “They said I won’t take my garment with me now but ship it to the US. If they were going to pay tax on it, they thought it should be paid in their own country,” he recalls, “They were quite feisty about it.”

Of course, that rule change doesn’t come into effect for at least a year, but the appeal of buying in London, whether shipping home or otherwise, is undimmed now. In fact, Rolex deal David Silver says he’s even noticed a change in how his collectors approach a transaction, clearly driven by the value for money of spending dollars in the UK. “Everyone can tell the watch is going to be sold quite quickly right now, so none of the bargaining and negotiating takes place that you’d normally see. They know they’ve got enough advantage already.”

Stamp duty bonanza ‘may stoke inflation and interest rates’

Radical changes to stamp duty payments “will get the housing market moving”, Kwasi Kwarteng said today amid warnings that his measures could drive house prices higher.

The chancellor raised the threshold for paying the tax from £125,000 to £250,000 in England and Northern Ireland.

The cut means that those moving home will pay no stamp duty on properties costing £250,000 or less and will save £2,500 on homes worth more than that. A third of all homes for sale on Rightmove, the property portal, are now completely exempt from the tax.

The first-time buyer exemption was raised from £300,000 on a property worth up to £500,000 to a threshold of £425,000 on a property worth up to £625,000. Two thirds of homes on Rightmove are now exempt from stamp duty for first-time buyers.

Kwasi Kwarteng said: “Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots.”

The Treasury estimates doubling the nil-rate band will enable 29,000 more people to move home each year and will mean 200,000 homebuyers a year will be exempt from paying the tax. It added that the cut would “boost spending on household goods and support the hundreds of thousands of jobs in the property industry, from removals companies to decorators”.

Those buying property in the south are likely to benefit most, according to Lucian Cook, head of residential research at Savills, the estate agency. He said: “The biggest beneficiaries of the stamp duty changes are likely to be first-time buyers in London and the more expensive parts of southeast England, where the savings on offer will make their deposit requirements look a little less daunting.”

Commentators have warned that the cuts could result in rising house prices, with reports suggesting that some sellers had sought to raise prices immediately after the budget speech.

“The average first-time buyer in London will save £9,000, which can be added to their deposit and will likely be capitalised into house prices,” Andrew Wishart, a property expert at Capital Economics, said.

“We fear that this stimulus will stoke inflation rather than growth and will force the Bank of England to raise interest rates even higher than the 4 per cent peak we currently expect. Indeed, investors now expect the Bank rate to peak at 5.6 per cent.” Wishart expects mortgage rates to tip over the 6 per cent watershed next year.

Tom Bill, head of UK residential research at the Knight Frank estate agency, said: “What the chancellor is giving, the Bank of England will more than take away. Many buyers will find the impact of rising mortgage rates soon eclipses the benefit of a stamp duty cut. The gravitational forces of higher rates will bring house prices back down to earth irrespective of any stamp duty cut.”

The expectation is that in the short term the tax cut, which unlike previous stamp duty holidays is permanent, may simply delay a fall in house prices, with Wishart now describing his prediction of a 7 per cent average fall in house prices over the next two years as optimistic. “While the consensus is for house prices to flatline, we are increasingly convinced a significant correction is coming,” he said yesterday.

House prices rose by 16.4 per cent in the year to June in England, according to the Office for National Statistics.

Others have criticised the move for failing to address the lack of supply. Caspar Harvard-Walls, partner at the Black Brick property buying agency, said: “Tax breaks are welcome, but there is still the fundamental issue of there not being enough new homes being built every year.”

A spokesman for the Royal Institution of Chartered Surveyors said: “The announcement of new investment zones to release land for new homes, as well as plans to accelerate transport infrastructure, are positive and we welcome the chancellor’s announcement that the government will increase the disposal of surplus government land for the building of new homes.”

House prices rose by 16.4 per cent in the year to June in England.

The pound’s slide against the dollar could encourage more international buyers, despite the 3 per cent stamp duty supplement charged on second homes and the 2 per cent levy on non-UK residents remaining unchanged in the budget. “Currency-wise, the pound against the US dollar is already proving positive for prime purchases in both London and key country hotspots. We expect more international purchasers to snap up top-end homes over the coming months,” Jonathan Bramwell, head of The Buying Solution, a property buying agency, said.

Estate agents said they were excited by the prospect of higher earners and bankers investing their gains from the budget cuts to income tax and the lifting of the bankers’ bonus cap in property. “It could be a very good Christmas for some in the City,” Guy Bradshaw, head of residential research at Sotheby’s International Realty, said.

A costing for the tax cut was not included in the budget documents. However, the Treasury was on course for a record stamp duty haul this year, with £10.6 billion collected in the first eight months of 2022, according to Coventry Building Society data.

The stamp duty changes do not apply to Scotland and Wales.

Wealthy dollar buyers pounce on London property as sterling slumps.

By Prime Resi Journal.

Top-end London property brokers are enjoying a bonanza of urgent interest from wealthy international buyers with US dollars to spend, looking to take advantage of a significant currency discount.

The value of a British pound plunged following Liz Truss and Kwasi Kwarteng’s tax-cutting fiesta last week, sinking to its lowest-ever level against the US dollar on Monday morning.

Economists, business leaders and politicians (except the Chancellor) have been wringing hands all day, while currency traders and pundits have made hay – as have Americans looking to buy property in the UK.

“We recently had a dollar-based buyer who reluctantly dismissed a period Mayfair townhouse because it was out of their budget,” says Mayfair estate agency boss Peter Wetherell; “with the strength of the dollar they have rekindled their interest as now affordable.”

Arthur Lintell, a Partner in Knight Frank’s Notting Hill office, has a similar tale, of an ex-Notting Hill local who relocated to New York 15 years ago – who is now returning “as the opportunity is too good not to miss as their children start Notting Hill Prep next year. In their words, ‘the timing could not be better for us right now’,” explains Lintell. “These buyers are also keen to have the competitive edge over domestic buyers who since the pandemic have dominated the family house market here in Notting Hill.”

It’s not just Americans spending dollars. Buying agency Black Brick has seen a particular spike in enquiries from Middle Eastern buyers with US currency to splash. The majority of these “are seeking homes in Prime Central London with budgets which range from £5mn to £20mn,” says founder Camilla Dell – noting that “these buyers will be purchasing at 27% discount compared to the same period last year, a significant saving to say the least.”

It’s a “fantastic opportunity” for international buyers, agrees Stuart Bennett, the recently-appointed Head of Sales at Beauchamp Estates in Mayfair.

The super-prime estate agency has seen a 40% rise in applicants purchasing in dollars as well as “a series of dollar-based deals,” most recently in Eaton Square and Cadogan Gardens. “This jump in activity reflects the fact that the current exchange rate position offers dollar purchasers probably the best opportunity there has been for many years and certainly one that people are currently taking advantage of given the influx of activity from that demographic over recent weeks,” explains Bennett.

London agency Robert Irving Burns reports a similar 35% jump in overseas property buyer enquiries since Friday’s fiscal event, prompted by what Managing Director Antony Antoniou calls “incredible discounts” on offer. “What we are seeing now is a boom in prime London property, while the rest of the country is gripped by a cost of living crisis,” says Antoniou. “Post the not so ‘mini budget’, the abolition of the higher rate of income tax and banker bonus caps means we have already seen a wave of interest in £2mn+ property across London. Investing in prime assets in the Capital is the equivalent of investing in gold in the current financial climate.”

Buying agency Banda says its retained clients with American money “clearly realise the opportunity that is on offer” with the falling sterling against the dollar. “We’ve had a few clients who were taking their time now acting quickly to get their purchases over the line and ensure they’re make the most of the currency fluctuation,” explains Head of Private Clients, Louisa Brodie.

“There has been a pick up from international buyers who see a buying opportunity in London, some of whom are taking advantage of both weaker pricing in PCL over the last seven years and record low sterling – a win-win for a value driven buyer,” says Rory Penn, Head of London Sales at Knight Frank, adding that airline passenger numbers are now running “only 17% below pre-pandemic figures now, with more international buyers to come.”

Beauchamp is taking advantage of the surge of new interest by launching a particularly grand Mayfair mansion to the sales market, with a clear focus on dollar-toting buyers. “Because of the current slump in the pound against the dollar, clients are deciding to list or relaunch properties onto the market to capitalise on the opportunity,” says Stuart Bennett. “This is why Culross House in Mayfair, which had been occupied by a tenant, has now been newly relaunched onto the sales market. We believe that Culross House will be ideal for an American purchaser, or an international buyer, potentially from the Middle East or Asia purchasing with US dollars, because of the current US dollar to pound sterling exchange rate situation, which effectively gives US dollar purchasers a 30% discount when buying a home in Mayfair.”

Bennett has some sums to illustrate the point: “Back in 2007 the $ hit over $2 to the £ and in 2014 it was up around $1.7 to the £; today we are sitting at around $1.16 to the £. This means that if a dollar-based buyer is purchasing a luxury property at £30mn today this currently relates to around $34.8mn, whereas in 2014 a £30mn London mansion would have cost around $51mn – so a c.30% difference. Likewise buying a London property at £5mn now is around $5.8mn, whereas in 2014 that same £5mn would have cost around $8.5mn.”

That 30% difference “pays for a buyer’s Stamp Duty and also any renovation or moving in costs,” adds Bennett. “It also enables a dollar-based buyer to buy a home in a much better area than previously or a bigger property with the much healthier budget.”

But it’s not going to be plain-sailing for overseas house-hunters in London, even if they suddenly have a lot of extra cash to splash; there’s just not that much around to buy.

“There remains a supply issue in Prime Central London which is unlikely to disappear with the current drop in the pound,” notes Camilla Dell, explaining that “many USD based sellers of PCL will have purchased when the pound was much stronger and will not want to crystalise their losses by selling.”

Peter Wetherell flags a similar issue: “Some sellers have withdrawn their properties because repatriating and converting their sterling monies does not equate,” he says. “They are therefore – once again becoming reluctant landlords and renting in a very strong market. Whichever way you look at it, there will be a lack of prime stock availability and therefore now is a buying opportunity.”

“Best in class stock is low and whilst it often achieves a premium it still offers better value than it would have done this time last year,” adds Banda’s Louisa Brodie – who thinks there’s “much more of this to come – decisive international purchasers snapping up prime properties and fast!”

“Buy now – whilst stocks last,” advises Wetherell.

The best places to move near good schools

Whether you are looking for primary or secondary, private or state, here are the areas with A* grade schools to consider.

By Tim Palmer.

There’s a reason that education is always a big feature of the The Sunday Times Best Places to Live guides. Choosing the perfect school may not be a guarantee of future happiness but any parent who finds themselves living in an area with few good options will be all too aware of the stress that can cause.

Competition for homes in the best catchment areas is fiercest in the smartest locations. Exceptional schools and high property prices often go hand-in-hand. One piece of research published this week by the estate agent comparison site GetAgent.co.uk claimed that an Ofsted “outstanding” rating boosts property values in the surrounding area by £37,000. There’s a danger of taking this too seriously. It isn’t usually the school that causes a property premium but the reverse. It’s more likely the case that a school whose affluent pupils live in expensive homes will find it easier to achieve good results than one in a deprived area.

Whatever the reason, that’s still a big saving on the cost of putting a couple of kids through the private system, even factoring in the cost of a tutor to make absolutely certain that the little ones ace the necessary selection tests.

Caspar Harvard-Walls, a partner at the buying agency Black Brick, says that, with the cost of living crisis striking fear even among the wealthy, he expects buyers in the most prime areas to start looking even more closely at state school catchment areas. “If people’s income is squeezed, saving on school fees will become a massive issue, especially as 70 per cent of new Oxbridge undergraduates now come from state schools,” he says.

The list below highlights areas with a particularly good choice of top-performing schools. It’s based largely on the annual Sunday Times Parent Power guide, an exclusive league table showcasing the schools with the best exam results. But these schools are not the be-all and end-all. There are few bad schools in the UK — almost 90 per cent of state schools in England are rated “good” or “outstanding” by Ofsted. And a high-achieving school doesn’t guarantee the best results for every child. Many psychologists recognise that it’s better for a child to be one of the cleverer pupils in an average environment than it is to struggle to keep up with a bunch of prodigies. So never mind if one of the leading schools mentioned in the list below isn’t for you — our Best Places to Live guide has many more places to put down roots, all with excellent schools and much more besides.

York

High house prices, crowds of tourists and an accompanying surge in the number of holiday lets pushed 2018’s overall winner off our Best Places to Live list last year. The city’s attractions — excellent train connections (London is about two hours away, Edinburgh half an hour further), beautiful surroundings and a superior selection of pubs, restaurants and leisure activities — are as beneficial to residents as they are to visitors.

York’s greatest asset, though, is its schools. It’s hard to find anywhere in the UK with a better choice of exceptional schools. Every secondary is rated at least “good” by Ofsted, and the city has no fewer than four comprehensives in the Sunday Times Parent Power list of the country’s top state secondaries. Pride of place goes to Fulford, chosen as the Sunday Times comprehensive school of the decade in 2020. Its villagey catchment area, close to the university and a couple of miles to the south of the city centre, is tight, according to Victoria Hunt, owner of White Rose Property Search, and competition for the best family homes can be fierce. Family-sized rentals, in particular, are hard to find, she says, because so many have been converted into Airbnbs, so don’t bank on being able to try before you buy.

If you can’t squeeze in here, no problem. Archbishop Holgate’s CofE and All Saints RC, not far behind Fulford in Parent Power, are close at hand. The north side of York has two further Ofsted “outstanding”-rated secondaries in Huntington and Manor CofE Academy. Private options are bountiful too. Venerable St Peter’s, one of the oldest schools in the world and the alma mater of Guy Fawkes (day fees, £6,850), is within the city walls, along with Bootham, Queen Margaret and the Mount, within walking distance of Bootham, whose grand Georgian and Victorian terraces offer the city’s best postcode cachet.

Average property price: £314,126 (source: Rightmove)

Cheltenham, Gloucestershire

If anywhere can rival York as an educational hotspot, it’s this refined Regency spa town, famous for its festivals and surrounded by lush Cotswold countryside. Ofsted rates all but one of the town’s 34 schools as “good” or “outstanding”, but rather than good schools for all it’s academic excellence that’s on offer here. In independent Cheltenham Ladies’ College, selective Pate’s Grammar and comprehensive Balcarras, it has three of the very best schools of their type in the country.

Pupils at selective Pate’s — Parent Power’s state secondary of the year in 2020 — achieved almost 95 per cent grades 9-7 (A-minus and above in old money) in last month’s GCSE results, while Cheltenham Ladies’ College was Parent Power’s South West independent secondary of the year. Fees start at £9,340 per term and boarding is £13,950 per term, so a family with two girls at the school could save a total of more than £50,000 if they live nearby.

Meanwhile, the performance of Balcarras, The Sunday Times South West state secondary of the decade, has made the suburb of Charlton Kings, two miles from the centre of Cheltenham, one of the most fought-over catchment areas in the country. If you’re not within half a mile of the school gates, prepare for disappointment. The houses — mostly hefty, postwar family-sized jobs — go for the same price as the period eye-candy close to the station, shops and offices in the town centre. Don’t expect much change from £2 million for a generous detached with a big garden. Happily Balcarras is spreading a little of its stardust more widely, as sponsor of the new Leckhampton High School, which opened last week.

Average property price: £369,639.

Best of the Rest

Altrincham, Greater Manchester

Before the arrival of the inspirational market and food hall that lifted Altrincham from suburban dead zone to on the 2022’s Best Places to Live list, big houses, the handy tram link and exceptional schools had kept the town squarely in the sights of well-to-do families seeking a safe berth just far enough from central Manchester.

The new buzz about the town has done nothing to dampen the educational offering, which is the best in the North West by some distance. There are more than 15 Ofsted-“outstanding” primary schools within three miles, and its three selective secondaries are in the top five in the region, according to Parent Power. Altrincham Grammar School for Girls was Parent Power’s North West state secondary school of the decade, with the boys’ grammar its only serious challenger. Loreto Grammar and non-selective Blessed Thomas Holford Catholic College (2013) are also rated “outstanding” by Ofsted.

Average property price: £578,531.

Barnet, London

Why do London parents seem in a constant state of panic? The capital is the very opposite of an educational minefield. Getting a place at your preferred school can be tricky — less than 70 per cent in inner London get their first pick, according to figures from Savills. But that’s no disaster as the general standard of schools in the capital is so high. Almost a third are rated “outstanding” by Ofsted, way above the national average, and only a tiny handful aren’t up to scratch. Even an area such as Newham in east London, which has very high levels of deprivation, has more than its fair share of the inspirational primaries and some exceptional sixth-form options too.

But for those parents determined to exercise their tiger tendencies, we suggest the leafy borough of Barnet. The commute to the centre of London can be gruelling from this far north, and the streets aren’t the cleanest, but educationally it’s hard to fault. Parent Power’s two top state secondaries in London are both in the borough — the highly selective Queen Elizabeth’s Grammar (boys) and Henrietta Barnett School (girls), with St Michael’s RC Grammar in Finchley (also girls) also in the top ten.

Better still, there are plenty of excellent secondary schools that don’t require an entrance exam. The Archer Academy, the Compton School, Wren Academy and the Hasmonean High School for Boys (there’s a girls’ school, too, but that hasn’t been inspected yet) are all comprehensive and rated “outstanding” by Ofsted. There’s an even better choice at sixth-form level. Woodhouse College is one of the top 10 sixth-form colleges in the country, according to Parent Power, and pupils can also travel a few miles into Hertfordshire to take A-levels at Dame Alice Owen’s, Parent Power’s South East school of the decade.

Average property price: £789,805.

Birmingham

Like the city itself, Birmingham’s education system can be hard to navigate. At primary level, it’s easy. The prime suburbs of Moseley, Bournville, Kings Heath and especially Harborne all have “outstanding”- rated primaries. Keep a close eye on the catchment areas for these and you won’t go far wrong.

After that, the star turn is the King Edward VI Foundation, which runs two independent secondaries, six grammars and three comprehensives. All are excellent performers, though it’s the selective grammars and the independents that dominate the league tables. Five of the grammars are in Parent Power’s 20 best state schools in the West Midlands and the two independents are in the region’s three best private schools. This means entrance exams or school fees are hard to avoid for Birmingham’s most ambitious parents.

The Edward VI Foundation’s leading schools are dotted around the city and pupils take one standard entrance exam, but that doesn’t mean you don’t have to think about where to live. The foundation has recently introduced a geographical element to encourage more pupils to pick a school close to home; traffic in Brum can turn a straightforward-looking school run into a daunting daily expedition.

Sarah Briggs, head of sales at Knight Frank’s Birmingham office, recommends that families should base themselves around Edgbaston or Harborne to be reassuringly close to many of the best performers.

Average property price: £233,078.

Chelmsford, Essex

Down-to-earth Chelmsford has always scored highly for commutability — Liverpool Street is 35 minutes by train — and the arrival of John Lewis in 2016 put what was then Essex’s only city on the map as a shopping centre. However, it’s the exceptional selection of schools that’s the biggest draw here, according to Jamie Stephenson, a director of Jackson-Stops estate agency, with high-performing options across all sectors.

The two selective grammars — King Edward VI Grammar (boys, mixed sixth form), known as Kegs, and Chelmsford County High School for Girls — are in Parent Power’s top 25 state secondaries in the country. Comprehensives, such as Moulsham High, The Boswells and St John Payne, which also features in the Parent Power table, are all rated “good” by Ofsted. Primaries such as Beehive Lane, rated “outstanding” by Ofsted, and Perryfields have the kind of reputations that get parents poring over catchment-area maps, while good independent secondary schools include New Hall, where this year’s A-level cohort achieved 54 per cent of grades at A* or A.

Average property price: £260,486.

Durham

There’s a mixed picture for education in the North East. The number of schools rated “good” or “outstanding” by Ofsted is slightly above the national average and a higher proportion of applicants — 96 per cent — get their first-choice school here than in any other part of the country. On the other hand, fewer people go on to university from the region and it has the smallest representation in the Parent Power rankings of the nation’s best secondaries.

The ancient university city of Durham, however, is a match for most places, largely owing to the extraordinary performance of Durham Johnston, a comprehensive whose results — more than 52 per cent A* or A grades at A-level — put it ahead of more than half the country’s selective grammars. An address within a couple of miles of the school gives you a decent chance of a place. Failing that, Framwellgate and St Leonard’s Catholic are also in Parent Power’s regional top 10, though a critical Ofsted report on the latter in January raised issues about leadership and provision for pupils with special educational needs.

There are good independent options in Durham High School for Girls and Durham School, and more than 20 primaries are rated “good” or “outstanding” by Ofsted.

Average property price: £209,326.

Ilkley, West Yorkshire

It’s not the choice of schools so much as the lack of it that makes this year’s overall best place to live such a reassuring base for parents. Three of the five primaries are rated “outstanding” by Ofsted, the other two are good. Best of all is the fact that pretty much everyone attends Ilkley Grammar, rated “outstanding” by Ofsted and the seventh-best state secondary in the North of England, according to Parent Power.

This doesn’t just spare parents the sharp-elbowed stress of fighting for places (leaving more time to enjoy the town’s magical scenery or its lively high street), it also brings everybody together in a tangible way, adding hugely to Ilkley’s unique sense of community. The nearest independent alternative is Bradford Grammar (day fees, 11-18, £4,511 a term), also in the Parent Power guide.

Average property price: £485,274.

Ottery St Mary, Devon

Colyton Grammar is the big name around here. It’s the second-best state school in the region and one of the top 15 in the country. The only selective secondary for 40 miles, it attracts pupils from all over East Devon and Dorset, including Ottery. However, live here and there’s no reason to make the 11-mile journey to Colyton if you don’t want to.

The town has its own “outstanding”-rated comprehensive in The King’s School. The choice of primaries includes West Hill, one of the top 250 in the country according to Parent Power, and Feniton CofE, rated “outstanding” by Ofsted. Ottery’s other big advantage, according to Oli Custance Baker, head of country houses at Strutt and Parker estate agency, is a handy location close to the A30. “It means you’re also within range of private schools in Exeter. There’s a lot going on in the town, you’re right in the countryside and close to the east Devon coastline,” he says.

Average property price: £375,663.

Stratford-upon-Avon, West Midlands

Shakespeare may be Stratford’s biggest tourist attraction, but for househunters it’s his old school that’s top of the bill. In a dozen years, King Edward VI School has risen from 93rd to 22nd in the Parent Power ranking, making it one of the top three schools in the West Midlands, behind Birmingham’s top two King Edward VI schools (no relation). It also has an excellent reputation for sport, music and — naturally — drama.

Along with the equally impressive Stratford Girls’ Grammar (fifth in the region according to Parent Power), the Ofsted “outstanding”, centrally located Stratford-upon-Avon Primary and “good”-rated comprehensive Stratford upon Avon School, the state sector has all bases covered. So much so, says Paul Houghton-Brown, an associate director at Hamptons estate agency, that many of the area’s affluent parents are now choosing to save on years of school fees by paying a tutor to secure success in the grammar selection tests.

However, the private-school tradition remains strong, with a well-trodden path from the Croft Preparatory School in Stratford to nearby Warwick School or King’s High in Warwick, then possibly on to Rugby School a few miles further north.

Average property price: £381,532.

Cowbridge, Vale of Glamorgan

With its chichi cafés, designer handbag shops and plentiful Pilates classes, this plush, lush country town is a strong contender for the title of Wales’s most bougie address. No surprise, then, that Cowbridge also has its best state secondary in Parent Power. Cowbridge Comprehensive — non-selective — has easily the best GCSE averages: 44.5 per cent of pupils achieve grades 9-7 (equivalent to A*/A). Not surprisingly, it gets an all-round “excellent” verdict from inspectors at Estyn.

Even better, there’s no race for a place as the catchment area stretches right across the fertile Vale of Glamorgan to the outskirts of Cardiff in one direction and the edge of Bridgend in the other. Primaries Y Bont Faen (English medium) and Ysgol Iolo Morganwg (Welsh) are both rated “good”.

For families keen to avoid the short but slow commute into the centre of Cardiff, the city-centre locations to aim for are Cyncoed and Roath Park, well placed for the tight catchment area of highly regarded Cardiff High (universally “excellent” according to Estyn) and Llandaff, home to two of the best private options, Howell’s School and Cathedral School.

Average property price: £496,686.

East Renfrewshire

It takes only the briefest glance at any Scottish schools league table to realise that this collection of suburbs on the fringes of Glasgow is the country’s educational powerhouse, in the state sector at least. As the flood of primary-age families heading a couple of train stops south from the city testifies, moving here is pretty much a guarantee of a place at a high-scoring school.

Three of the top ten Scottish state secondaries in the Parent Power Guide are here: Mearns Castle High in Newton Mearns, St Ninian’s High in Giffnock and Williamwood High in Clarkston. Nearby Eastwood High and Woodfarm High are no slouches either, both featuring in Scotland’s top 20.

For anyone used to the hustle and bustle of Glasgow, life here can seem sedate but transport links are good. Glasgow Central is only 15 minutes by train from Giffnock, for example.

Other Scottish hotspots can be found in the north of Glasgow, where Jordanhill School tops the Parent Power table and Bearsden Academy is seventh. For anyone looking to get away from the city and breathe some fresh almost-Highland air (while remaining safely within commuting distance), Dunblane is the best bet. Dunblane High School is second in the state secondary league table, with 75 per cent of students attaining the “gold standard” of five Highers.

Average property price: £303,308.

Talking Heads: What would cutting Stamp Duty do to the housing market and economy?

It’s being reported that Friday’s “emergency mini-Budget” will feature a cut to Stamp Duty. Is this wise, and what impact might such a move have on the property market and on the wider UK economy.

Prime Minister Liz Truss and Chancellor Kwasi Kwarteng are tipped to announce some kind of cut to Stamp Duty – a tax on property transactions – on Friday. Details are scant, but two sources told The Times that the “growth plan” has been in the works for the last month.

The prime property sector has opinions.

The general consensus, as you might expect, is that less tax is good. But there are clear notes of caution that a short-term crowd-pleaser might have unintended consequences – including yet more escalation of house prices.

 

‘The Government will have a particular eye on how the prospects for the housing market influence consumer confidence and spending in the economy’. 

Lucian Cook, Head of Residential Research at Savills.

“By cutting stamp duty the government will be hoping that it supports demand at a time when lead indications suggest that it is starting to wane. In doing so, they will have a particular eye on how the prospects for the housing market influence consumer confidence and spending in the economy.

“More specifically they will be hoping that it will go some way to offset the impact of increases to the cost of living, and more pertinently, higher costs of mortgage debt, that look set to put further pressure on house prices and transaction levels next year.

“In an ideal world, we would have liked to have seen the government take the opportunity to look at how changes to stamp duty could address specific issues in the housing market.

“Firstly, they should consider a targeted relief for downsizers – perhaps similar in scale and design to that available to first time buyers – in order to remove one of the barriers to more efficient use of our existing housing stock.

“Secondly, they should look at lower rates of stamp duty on the purchase of more energy efficient homes, particularly as housing remains the problem child of reducing our carbon emissions. That would further encourage existing homeowners to undertake improvement works before the point of sale.”

 

‘Previous cuts to stamp duty haven’t really worked’. 

Camilla Dell, Managing Partner at Black Brick.

“I am not convinced cutting stamp duty will aid investment into the UK. The market has absorbed stamp duty increases since they were first introduced in 2014. The cost of stamp duty, whilst high in the UK, is not a deciding factor for investment here, particularly for high net worth individuals who simply factor the stamp duty cost into the overall price of a property. Previous cuts to stamp duty also haven’t really worked. For example, during Covid, the then Chancellor Rishi Sunak cut stamp duty for all purchases up to £500,000. The cut benefitted all buyers; everyone from first time buyers to second home owners, investors and overseas buyers. The end result was that house prices rose, higher than the actual cut in stamp duty. An unintended consequence, and proof that simplistic cuts to tax don’t work or benefit those who need them most.”

“Any future changes or cuts to stamp duty must be carefully considered. We welcome anything that supports first time buyers, but we don’t believe that the entire market needs stamp duty to be cut in order to support and grow the UK economy. Affordability and supply are the two most important areas that need to be addressed for first time buyers. Finally, if changes are coming, then we would encourage the new Prime Minister and Chancellor to bring the changes in swiftly. What the property market hates is uncertainty. In the run up to any changes, we are bound to see deals go on hold, which isn’t good for anyone.”

 

‘Prices could spike higher in the short term’.

Tom Bill, Head of UK Residential Research at Knight Frank.

“Nobody can accuse the new government of lacking an economic vision.

“If its low-tax approach extends to stamp duty, recent history tells us it will trigger higher levels of demand in the housing market at a time when mortgages are getting more expensive, which will support social mobility. Prices could spike higher in the short term if supply initially struggles to keep up but more balanced conditions will return provided the cut is immediate and permanent.”

 

‘Any reduction in stamp duty will be well received’.

James Hyman, Head of Residential at Cluttons.

“Any reduction in stamp duty will be well received and essential to help those worst affected by rising interest rates and cost of living to get on the property ladder. Whilst a reduction in stamp duty will help the housing market to continue to flourish as it has over the past two years, what would really help the UK’s current housing crisis is a reduction of the 3% levy on second home purchases. The main reason why rents have escalated so quickly over the last two years has been lack of supply, which has been driven by so many landlords being forced to exit the market due to the government no longer making it viable to be a private landlord.”

 

‘It has to be encouraging that we are talking about growth plans, not austerity’.

Dominic Agace, Chief Executive of Winkworth.

“It has to be encouraging that we are talking about growth plans, not austerity. Stamp duty reform would embody this. We know lower tax allows more people to right size for their family needs, particularly in the South-East. As we saw immediately after the pandemic in London,  that doesn’t mean prices have to increase. Downsizers are encouraged to make the move so the housing ladder is unblocked. With more movers, it also means the overall government tax take will increase.

“A budget for growth is a vote for optimism. I think that’s a route we all naturally prefer. Sentiment is a key driver in the housing market, which plays a huge role in the UK economy through its ripple effect to all types of businesses.”

 

‘Truss’ government must be laser-focused on increasing housing stock over short-term stimulus to prop up growth’.

Pete Ladhams, managinging director of Assael Architecture.

“Truss’ government must be laser-focused on increasing housing stock over short-term stimulus to prop up growth.

“As tempting as it may be to take the path well worn and resort to stamp duty cuts and tax incentives, these unsustainable solutions will not motivate those in under-occupied homes to downsize, or secure housing affordability for first-time buyers hardest hit by spiralling house prices.”

 

‘Any help to reduce the cost of moving will no doubt be welcomed by buyers’.

Tim Bannister, Rightmove’s property expert.

“With demand starting to soften slightly over the past few months, and headwinds anticipated to grow as 2022 draws to a close and we enter 2023, any help to reduce the cost of moving will no doubt be welcomed by buyers if a stamp duty cut is announced on Friday.

“Sellers who may have been considering listing their property for sale may be encouraged to push on with their plans given the potential for increased demand, in turn bringing much needed stock to a currently supply constrained market.

“If the cuts benefit homes in higher price brackets it would help those trading up more than it would help first-time buyers. With rising interest rates and cost of living it could be welcome to those looking for a bit more buffer to find the home they want, but if prices rise further then then that extra money could quickly be swallowed up.

“The impact on supply, demand and ultimately prices will depend on the detail, including if it will it extend to second-home buyers and investors.”

 

‘The Government would have to do much more than simply increase stamp duty thresholds in line with levels of house price growth seen since we emerged from the first lockdown’.

Lawrence Bowles, Director of Research at Savills.

“News of a stamp duty cut suggests the government will be hoping that it supports demand at a time when lead indicators suggest that it is softening after two bumper years. In doing so, they will have a particular eye on how the prospects for the housing market influence consumer confidence and spending in the economy.

“More specifically they will hope that it will go some way to offsetting the impact of increases in the cost of living and, more pertinently, higher costs of mortgage debt that look set to put pressure on house prices and transaction levels next year.

“Realistically, it seems unlikely that the Government will be able to implement stamp duty changes that completely outweigh these two major concerns for buyers. Certainly, they would have to do much more than simply increase stamp duty thresholds in line with levels of house price growth seen since we emerged from the first lockdown.”

 

Prime Minister Truss is refreshingly radical and is not frightened to tread on sacred ground and deal effectively with the ‘Sacred Cows’ of taxation

Trevor Abrahmsohn, Glentree Estates.

“Playing with Stamp Duty rates has been the pastime of many former Chancellors over the past eight years, ever since the hapless Osborne decided to convert the system from a ‘slab-sided’ to a ‘sliced’ version in 2014. The rates at the higher end, particularly for people with more than one house and then more recently, of foreign origin, are now 17% and for a long while these changes resulted in a lower tax-take for the Treasury, quite apart from the distorting effect that it had on the number of sales which took place.

“There is no question that Prime Minister Truss is refreshingly radical and is not frightened to tread on sacred ground and deal effectively with the ‘Sacred Cows’ of taxation.”

Read Abrahmsohn’s full thoughts on the proposed Stamp Duty cut, and why he hopes Liz Truss will be “our Queen Boadicea in difficult economic times” on PrimeResi here.

As luxe would have it: Ultra high-end new homes across London are kitted out for the super wealthy

By Ruth Bloomfiled

Fizzy water straight from the tap, a hot tub on the terrace for post-Covid gatherings, an in-house florist on call, and a panic room just in case of emergency; welcome to the very weird but also wonderful world of luxury housing in London post-Covid-19.

While wealthy buyers have always wanted lavishly-appointed homes – think silk wallpaper that would make Carrie Johnson green with envy and bathrooms clad from floor to ceiling in book-matched Italian marble – the definition of “luxury” is an evolving one.

The collective experience of living through lockdowns and facing the possibility of life-threatening illness has inevitably changed how people view the perfect home.

“The bar that delineates ‘luxe’ gets higher and higher every year, and that’s without a global pandemic,” said Keir Waddell, head of London new homes sales at Strutt & Parker estate agents.

“Covid-19 ultimately shifted everything we previously thought we wanted from our homes. And for prime developments every part – outdoor space, amenities, communal areas – had to be viewed through this new Covid lens.”

And while normal Londoners may feel that the world of ultra-luxury homes has little to do with them, the truth is that trends that begin at the luxury end of the market – whether it be cars, or fashion, or bags – have a habit of trickling down in a diluted form into the mainstream.

 

The fundamentals

Buying agent Emma Fildes, founder of Brick Weaver, said that post-pandemic buyers still want the “classic fundamentals” – secure parking and a walk-in wardrobe. “Ideally, with a chute to the laundry room for clothes,” she adds.

The pandemic has added a defined WFH space – not a corner of the kitchen or a dark hallway cubby hole but a proper study or a co-working space on site – to this list.

At Southbank Place, beside the London Eye, The Penthouse at Belvedere Gardens has a dreamy luxe layout with a master suite featuring its own private terrace, walk-in wardrobe, and bathroom.

There is also a “production kitchen” so staff can unobtrusively take over the work at dinner parties, plus the all-important home office. All this could be yours for a cool £21million.

Camilla Dell, managing partner at Black Brick buying agents, said her buyers are looking for generously sized rooms, and a really high specification. “Real luxury has to have top quality construction, materials, layout and design,” she says.

She finds buyers particularly like the character of an older building combined with the convenience of a new-build.

“The combination of the charm and history of an older building with the comfort of a new build is another highly desirable design feature,” she said. “Developments such as Battersea Power Station and The Old War Office are good examples.”

 

The practicalities

The sense of jeopardy we all felt during the pandemic appears to have stoked the paranoias of the ultra-wealthy.

“Post-pandemic, we have seen significantly more clients expressing concerns about their personal security in London and wanting to ensure their family feels safe within the home,” said buying agent Edward Heaton, founder and managing partner of Heaton & Partners.

“24-hour security is much-desired but reinforced front doors, traditional security grills and safe rooms remain important considerations for many buyers.”

Luxury buyers know their brands, says Waddell, and they are extremely picky. “Every year there’s a new standard,” he says. “At the moment in kitchens it’s names like Sub Zero & Wolf appliances that people want. Wait times for these can be up to a year thanks to increased demand.”

Little extras which luxury home-hunters seek as standard nowadays include ways to deal with our increasingly erratic climate.

“With hotter summers and colder winters, air conditioning and underfloor heating are popular, as are taps that provide instant hot, chilled, or carbonated water,” said Peter Krelle, land and new homes director at Barnard Marcus.

A concierge to ensure security and handle Amazon deliveries is, of course, a must have, but Ed Lewis, director at Savills, says developers are increasingly offering all sorts of extra help around the home, from nanny services to florists and private chefs on call.

 

Outside space

The pandemic also made people very aware of the life-fulfilling benefits of outside space, and in the luxury sector buyers aren’t looking for a modest balcony with room for a bistro table and a couple of chairs.

“Views of water will always demand a significant premium, followed by views of open space such as parks, especially in big cities such as London,” says Krelle. “A cityscape may be a lovely backdrop, however, concerns over air quality often limit this desire.”

Fildes agrees. “Outside space is now non-negotiable. But you need room for at least six to eight people to sit comfortably, plus ideally a more open area to house a BBQ or hot tub. ‘I need space for morning yoga’ is often something which clients request.”

The four-bedroom Regent Penthouse, perched on the 29th floor of a building at the West End Gate development in Paddington, ups the outside space ante with no less than three balconies, each offering a different viewpoint over London. And, at 4,757 sq ft, this £12.75 million apartment is the size of a spacious family home.

 

Amenities

Ever since One Hyde Park, with its subterranean spa and hotel-style services, burst onto London’s new home scene in 2011, residents have wanted the luxury home experience to continue beyond their front doors.

Residents’ amenities – from libraries and private clubs to gyms and roof gardens – are now an intrinsic part of the high-end homes sector.

Waddell says buyers want a “compound” vibe from their home – with everything they need, from a gym to a restaurant, a workspace, and wellness facilities, in their building.

Samuel Richardson, head of sales at Carter Jonas in Marylebone, says that access to a private dining room is currently a big hit with buyers of luxury homes.

“In a post-pandemic world, many are now prioritising socialising,” he said. “Private dining rooms enable them to host dinner parties with famous chefs from the best restaurants across London. This sense of exclusivity is now a key component of the luxury lifestyle.”

One once-prized shared amenity which is being rethought, however, is the swimming pool.

“The majority prefer to have total privacy when swimming,” says Dell. “We see this becoming evident in developments such as The Glebe in Chelsea, and John Caudwell’s up-and-coming Audley Square development, where apartments have their own individual private spas, gyms, and swimming pools rather than sharing communal areas.”

£10 million is no longer enough to buy ‘an amazing family home’ in prime central London

Despite headwinds facing much of the market, demand — and prices — for London’s best super-prime properties remain high.

There’s ‘a real lack of stock’ and a ‘competitive landscape’ for super-prime London property, according to leading property advisers.

The overall prime London market, meanwhile, is continuing to perform very strongly, according Butterfield Mortgages’ business director David Gwyther.

‘We’ve been busy,’ Gwyther told the audience at Spear’s 500 Live in association with The OWO Residences by Raffles. ‘The first eight months of this year, we’ve seen clients sell about 27 or 28 properties — in the world we operate in, that’s actually quite a lot,’ he said. ‘More importantly, we’ve seen clients buy 37.’

Gwyther was joined by Black Brick’s Camilla Dell, Quantock Financial Services’ Neil Hudson, and RFR’s Richard Rogerson, in a lively and wide-ranging panel discussion entitled ‘Prime Movers: the secrets of selling, buying and financing super-prime property, in association with Butterfield Mortgages’. The four panellists agreed that super-prime sellers are now in the driving seat, with a shortage of ‘turn-key’ super-prime homes.

International buyers are still ‘somewhat down’ compared to prepandemic levels, said Camilla Dell. But, she added, ‘there’s a huge amount of interest at the moment from t HNWs who are2 US dollar-based’.

‘At the moment, we’re seeing a lot of clients from emerging market countries,’ Dell said, noting that buyers who had recently made money in the oil and gas industries were particularly prevalent. ‘London for them is looking really quite cheap at the moment,’ she said.

‘I might avoid the word “fast”, but certainly activity is busy at the moment’, Richard Rogerson said. ‘The big takeaway for people is about quality in the market. Good properties are trading, and there’s a real lack of stock… that makes a competitive landscape. And so prices are pushing up for the best-in-class properties.’

‘We’re seeing record prices being achieved for good properties — best in class — in competitive processes,’ he added.

Dell said that buying agents are getting ‘creative’ to ‘address this lack of supply issue’. Her firm recently organised a ‘rosé wine drop’ to homeowners in Wimbledon, which found an off-market seller for one of her clients. ‘Actually, we’re showing Ethat2 client today. .. and we think it’s a great match.’

‘Tilrn-key’ properties are becoming more attractive as renovations are becoming more expensive, with buyers commonly now having to allocate upwards of £500 (and sometimes £750) per square foot for projects — although Gwyther cautioned that lending on fixer-upper homes is sometimes tricky. ‘As a lender, we do start to get a bit twitchy, because of course we’re going to lend on what the value is.’

The panellists agreed that the lack of supply meant that a mere CIO million is no longer enough to purchase the type of London home that many UHNWs desire.

‘An amazing family home, with five, six bedrooms and a garden, and parking, in zone 1, for 10 million? It’s not going to happen,’ Dell said. Rather, she says, for areas like St John’s Wood and Chelsea, ‘215 million upwards’ would be needed.

There was also time for some advice for negotiating transactions. It’s not uncommon for buyers to take around eight months when factoring in the whole property search, the panellists noted, while Rogerson added that high stamp duty remains an important consideration for his UHNW buyers. ‘My clients are paying between 12 and 17 per cent. It’s never an easy conversation, but it’s part of the market.’ Rogerson said.

‘I don’t see the government changing it for now, but I think it could become a topic for the 2024 election,’ he added.

Dell also noted some changes in tastes for UHNW buyers. ‘I think we’ve definitely seen — I’m going to whisper it —

Knightsbridge fall out of favour. Mayfair used to not be desirable at all but has now outmanoeuvred Knightsbridge.’

Spear’s 500 Live 2022 in association with The OWO Residences by Raffles was held at The Carlton Tower Jumeirah in

Knightsbridge. The annual event brings the world of Spear’s to life with a programme of panel discussions, keynotes and interviews with leading figures from the worlds of finance, economics, wealth management, law, tax, philanthropy, education, luxury and more.

The event was sponsored by Butterfield Mortgages, CAF, Finance Malta, IQEQ, MOXO, the Oeno Group, RAK ICC and the Royal Mint.

Is this the toughest London neighbourhood to buy in right now?

Islington is “one of the toughest” locations in London to be a prime property buyer, say Coutts bank and buying agency Black Brick. The number of homes available to buy in the area has plunged by nearly a third in the last year, while demand has been rising.

29% fewer properties were listed for sale in the Islington and King’s Cross area in Q2 this year compared to last year, according to LonRes, leaving overall stock 32% lower.

At the same time, Black Brick has seen a “sharp rise” in buyer interest – particularly from wealthy tech professionals looking for period homes with easy access to the Central London.

Around half the enquiries received by buying agency this summer have been from British buyers wanting to upsize to a house in Islington, typically with a budget between £1.5mn and £3mn. “Stock is severely limited, and competition is high, meaning more and more buyers are turning to buying agents for help,” explains the team.

The average buyer in Islington negotiated a meagre 1% off their new home’s original asking price in Q2, according to LonRes. For comparison, the average discount across prime London is currently around 6%.

“The Islington property market is highly competitive,” says Tom Kain, Senior Property Consultant at Black Brick. “We have seen a great deal of pent-up demand for houses in the area. Buyers are drawn to three storey terraced period houses which have been newly refurbished. Our clients have predominantly been in the tech industry and are drawn to Islington because of its proximity to The City and the West End, and its family friendly lifestyle.”

One of the buying agency’s recent acquisitions illustrates the trend. The firm secured a six-bedroom Regency house in Highbury for £3.45mn, following “many months” of searching Islington, Canonbury and Highbury on behalf of a client with “very specific requirements”.

The 3,2000 sq ft semi-detached property (pictured below) on Hamilton Park West features a 65-foot garden and private off-street parking.

Black Brick founder Camilla Dell flags a wider movement of affluent buyers from Prime Central London towards the capital’s leafier fringes, including Highbury, Fulham, Battersea, Hackney and Shepherds Bush. “These prime outer London areas have proven highly popular as many buyers aim to get more for their money, gaining gardens or outside space and home offices, as well as a great square footage,” she explains.

Looking ahead, the BB team expects some of the heat to come out of the prime London market through the Autumn. “We expect that prices in Islington may slow in the coming months due to the area being susceptible to rising interest rates, as many buyers take debt to buy in the area,” says Kain.

Everything you need to know about moving to Dulwich, south London

This historic area — it’s really three villages in one — is green by nature and lifestyle

By Georgia Lambert

Where?
A pocket neighbourhood nestled between the effortlessly modish Herne Hill, the edge of Peckham, Brixton and suburban Crystal Palace. Regarded by locals as a “leafy haven with village-like vibes”, Dulwich is (rightfully) having a bit of a moment.

What is it about Dulwich?
The area, managed by the Dulwich Estate charity, has been split into three distinct regions. East Dulwich is centred around Lordship Lane, which is peppered with independent shops, hipster watering holes and street art. Then there’s historic West Dulwich, which, after being hit in the Second World War, was restored into what is now an affluent neighbourhood, and home to the £22,971 a year (day pupils) Dulwich College for boys. The grade I listed All Saints church, HQ to the Lambeth Orchestra, is a particular draw for musicians, while the Rosendale pub, with its Royal Doulton tiling, is highly rated. Then there is Dulwich Village, home to family-run businesses like The Art Stationers and Green’s Village Toyshop, and grand houses that belonged to a pantheon of politicians, including Margaret Thatcher in the 1980s.

“Dulwich, specifically Dulwich Village, has been popular for decades with families who don’t want to live in the hubbub of Zone 1 or 2, but want the amenities of London”, says Nina Harrison, the London specialist at buying advisers Haringtons.

How do I get there?
Although Dulwich does not have a Tube station, the railway stations at East, North and West Dulwich offer fast access to central London — North Dulwich to London Bridge takes 15 minutes. Get the 3 bus towards Westminster and hop off in Brixton to make use of the Victoria Line. The trusty N63 night bus will get you back to your Dulwich den from central London after hours. Watch out for the many cyclists who pedal to work and back each day — or join their Lycra-clad tribe.

What else is on offer?
Dulwich Picture Gallery, designed in the early 19th century by Regency architect Sir John Soane, is the oldest public art gallery in Britain. The skylit gallery houses a permanent collection of Baroque masterpieces.

In May, the Dulwich Festival returned after being put on hold during the pandemic. The festival gave art lovers the opportunity to visit some 400 local artists in their homes and gave toe-tappers the chance to enjoy classical, jazz, choral, and pop music. Nearby Brockwell Lido in Herne Hill is the destination to practise your breaststroke.

There are also some fab cinemas in the area, including East Dulwich Picturehouse and Brixton’s Ritzy, about half an hour away by bus.

Can I go shopping?
Birkenstock-wearers will find it hard to resist the shops, from homeware at Mrs Robinson to Willow for your art supplies. The Dulwich Trader is a one-stop shop for gifts and it’s only a minute away from the beloved (and award-winning) Dulwich Books. Fans of the high street will be thrilled to find the likes of Jigsaw and White Stuff hidden among the indies. On the hunt for a bargain? Head to Boutique by Shelter, Mary’s Living and Giving shop and St Christopher’s Hospice, all in East Dulwich.

Green spaces?
I challenge you to find a greener London suburb that is as central as Dulwich. Its name, meaning a “marshy meadow where dill grows”, was first recorded in AD967. Dulwich Park, a jogger’s paradise, includes 40 acres of allotments, a dozen playing fields and 69 acres of ancient woodland.

You are yearning to be a part of a thriving community that is driven by eco-friendly standards. Perfect for families and entrepreneurs alike, the area is fertile with opportunity. Like Flora Blathwayt, 35, whose small business sells handmade cards using plastic collected from UK beaches.

Don’t move here if . . .
You’re not prepared to put down a big deposit. According to Rightmove, the average house price in Dulwich is £872,348. The majority of sales are flats, Victorian terraces and semi-detached houses, which go for around £1.5 million. Tom Kain, senior property consultant at the buying agent Black Brick, says: “Dulwich has seen some of the sharpest rises in property prices of any area over the last 25 years. Knight Frank reported in 2018 that prices had risen 1,150 per cent since 1995, making it home to the highest long-term rise of any area in England and Wales over the period. Teachers, doctors and artists are being replaced by bankers and lawyers.”

Could you speed up a property purchase?

You may be able to take efficient steps to buy your next home more quickly, according to experts in the Investec network.

Research shows that the time taken to buy a property has increased since before the pandemic. The reported delays in conveyancing, coupled with a rising base rate environment, has increased the sense of urgency for many buyers.

This means efficiency at all stages of the process is critical. Here, experts in the Investec network explore how it may be possible to speed up a purchase.

1. Consider purchasing a property off-market

When it comes to the search process, Caspar Harvard-Walls, Partner at buying agent Black Brick Property Solutions, advises buyers not to wait to find a property that is advertised for sale.

“The property market in the UK can be difficult to navigate because there is not a centralised list of all the available properties for sale and selling agents may only cover particular areas,” he explains. “Since the beginning of 2022, more than 50% of the properties Black Brick has acquired for clients have been sourced ‘off market’ and this is a trend we see increasing. For clients looking to buy a property, a buying agent will have access to opportunities that never hit the open market.”

2. Appoint your lawyer and professional team early

According to Rightmove, it currently takes an average 150 days to complete a purchase after agreeing a sale – 50 days longer than in 2019.

In this environment, the sooner a buyer can bring on board legal support, the better, says Laura Conduit, a Partner at independent law firm Farrer & Co. “It’s important to be organised. Ideally, lawyers should be appointed before a property is even found or a deal agreed.”

Once appointed, communicate regularly and clearly with your lawyer, bank and any other third parties involved in the purchase, in order to keep things on track. “Agree a realistic timetable upfront and check in with the selling agents, bank, lawyers and surveyors to ensure everybody is focused on meeting the target exchange date,” Laura advises. “And ensure that searches are submitted by the lawyers without delay.”

Organisation isn’t only helpful from an efficiency perspective. In Caspar’s experience, it can also be the difference between having an offer accepted or not. “Sellers and estate agents can be wary of a buyer who does not look organised,” he warns.

“We recently won a sealed bid (where multiple buyers offered on a property) even though our client did not put forward the highest offer. The seller and his agent were impressed by how organised we were and felt confident that the deal would proceed smoothly.”

3. Explore using dual legal representation

When selecting a lawyer, it’s also worth seeing whether you can use dual legal representation, which allows an approved legal firm to act for both the buyer and the bank during the mortgage process. This can be particularly beneficial for those needing to move at speed, as it has the potential to shorten the time required for legal checks. In some cases, it can also reduce the cost of a mortgage application.

Investec offers dual representation to ensure we can collaborate efficiently.

4. Don’t rule out purchasing a new property if you haven’t sold an existing one

If you’ve found a great opportunity before selling your existing property, it’s still worth exploring whether you can move ahead with the purchase.

At Investec, we’ve been able to help some clients in this position by taking a holistic view of how much they can afford to borrow.

“We assess mortgages on the basis of affordability,” explains Lisa Parkes, a Private Banker at Investec. “A client recently found their forever home but hadn’t sold the home they were living in. As we were able to demonstrate that they could afford both mortgages until the original property was sold, we were able to provide finance and structure repayments in a way that met their needs.”

5. Work with a lender that already understands complex income profiles

Having a complex income structure shouldn’t delay your mortgage approval.

Although some high street banks are unable to consider incomes that are drawn from multiple sources – such as foreign currencies or various investment portfolios – a specialist lender, like Investec, may be able to find a solution.

As Lisa explains, Investec assesses affordability based on our understanding of each client’s unique needs, rather than taking a one-size-fits-all approach. “The way that clients draw their income and how we assess loan affordability, is unique to each segment. This means, whether a client is a solicitor, a private equity partner, a business owner, or in another profession, our expertise enables us to make decisions efficiently. When calculating affordability, we can consider discretionary income, foreign currency earnings and assets on a case-by-case basis.”

Investec takes the same approach when working with investors, adds Lisa. “In relation to their wealth, property entrepreneurs may have a comparatively low income stream. We look at investments they might hold or retained profits within their business that they could draw.”

6. Make sure your bank can move swiftly

When choosing a lender, it is important to look at how they operate as well as what solution they can provide. “At Investec our credit team meets daily and is aligned with the private bankers who support clients in different professions; this means we can often provide an agreement in principle within days,” says Lisa Parkes. “We take this approach for residential and investment purchases and build deep relationships with our clients so we can help them seize opportunities. We are also available for our clients to speak to us directly throughout the process to ensure a smooth transaction.”

Why is the property market joining the podcast party?

If there’s one thing that received a boost as a result of Covid and lockdowns, it’s podcasts – which reached whole new audiences as people sought to while away the extra hours at their disposal.

They were nothing new – first receiving real prominence with the podcasts featuring Ricky Gervais, Stephen Merchant and Karl Pilkington – but received a major boost as anyone who’s anyone, from Louis Theroux to Peter Crouch, got involved with the podcast boom.

There are a huge range of podcasts out there covering pretty much every topic, from cooking, crime, sport and music to politics, science and history. Popular platforms for podcasts include BBC Sounds, Spotify, Audible, Google and Apple.

Some of the most popular podcasts include Off Menu with comedians Ed Gamble and James Acaster, My Dad Wrote a Porno, Diary of a CEO with Steven Bartlett, The Adam Buxton Podcast, That Peter Crouch Podcast, Newscast, Rob Beckett and Josh Widdicombe’s Parenting Hell and No Such Thing as a Fish.

Well-known TV shows frequently have podcast spin-offs nowadays, while sites like the Guardian and the Telegraph have popular weekly pods discussing football, business and politics.

Most podcasts are either half an hour or an hour in length, although this varies, and typically have a clear structure, format and tone that is utilised in each episode. People often listen to them while they’re commuting, out on a walk or run, while driving in the car or during their lunch hour.

Many have built loyal and large followings who eagerly wait to tune in each week, and are often encouraged to get involved in the podcast itself via various means. Some have even turned successful podcasts into live shows to physical audiences.

And now, it seems, property is keen to get in on the podcast act. Just in the last few weeks, OnTheMarket, buying agency Black Brick, The Guild and Just Move In (featuring former Propertymark CEO Mark Hayward) have launched podcasts.

There are also longer-running property podcasts such as The World Class Agency podcast with Homesearch’s Sam Hunter and love2move’s Mark Worrall, and the two Robs (Rob Dix and Rob Bence) who focus on everything to do with property investment in their podcasts over at Property Hub. Plus, of course, property royalty and EAT columnist, Phil Spencer, has a regular property podcast through his Move iQ platform.

Whisper it for now, but the Today sites hopefully has a podcast offering in the offing, too – watch this space! This comes as news sites increasingly tap into the power and reach of the humble pod.

Why are they becoming more popular?

Podcasts have become a trend that is hard to ignore – and have fully established themselves alongside radio, TV and audio books in the nation’s psyche. Their popularity, as mentioned before, was given a massive boost by the pandemic.

With more spare time on their hands, and more hours spent walking, cycling and running, people turned to podcasts to accompany them on these pursuits, to distract their minds, to allow them to escape to somewhere else.

The very best podcasts captivate you for 30 or 60 minutes and leave you constantly wanting more. They can be used to entertain, inform and educate, making them perfect platforms for major property discussions.

But they also thrive on personal or funny stories, or getting to know someone or something you previously had little knowledge of.

They can be longer-form, more spontaneous and more conversational than video interviews or traditional Q&As. They can help to go in-depth on a particular topic or offer pithy bite-sized summaries of a major topical discussion point.

From a property person’s point of view, they allow more exposure – on social media and elsewhere – the chance to build brand awareness, the chance to be seen as an authority on a given subject, and also the chance to entertain, inform and educate listeners, offering a human side to the property market that is too often overlooked.

This excellent article from Simply Business helps to explain how people should go about launching a podcast if they’ve not done it before.

Will they be a short-term fad or something more long-term?

This will largely depend on the success of the new podcasts that have recently hit the market. For all the joy, escapism, information and educational content they can provide listeners with, they do also take a lot of time, effort and organising.

If this isn’t reflected in strong listener numbers, enthusiasm for making them could start to wane. There are a few property podcasts that have already established themselves, including the aforementioned World Class Agency Podcast with Sam Hunter and Mark Worrall, and the team at Property Hub, but property podcasts do remain niche for now.

That is starting to change with more and more now offering podcasts, ranging from agencies and trade bodies to portals.

It will be interesting to see how these go down with audiences as the property market continues to become more multi-media than ever.

Here at the Today sites, we’re always looking for ways to make the content we provide as engaging and interactive as possible, and podcasts could be the next stage of that evolution.

It’s certainly something to keep an eye on over the next months to see if the post-pandemic podcast boom continues.

Award-winning editor

For the Today sites, we’ve always been keen to have the very best in the business penning our daily breaking news stories. For years, multi-awarding winning journalist Graham Norwood has been doing fantastic work across a number of our publications. When he stepped down from Estate Agent Today earlier this year, we hired Marc Shoffman to take over.

We knew we were getting a respected and award-winning journalist when we signed him up, but it’s excellent to have that reaffirmed by fresh awards success.

On Thursday night, Marc won Freelance Journalist of the Year at the Headlinemoney awards 2022. Here’s what the judges had to say about him:

“With so many freelancers plying their trade in the financial space this is always a competitive category to win. As it turned out, one name had already emerged from the shortlist after the first round of judging. When the panellists convened to make their final decision, it was a relatively straightforward task to go on and name Marc Shoffman as the winner for the second year in a row.

“Marc is a top-notch freelancer with an eye for an exclusive and the journalist nous to dig into tough topics, get results and convey that well in his writing,” one judge commented. “A clear stand-out with excellent investigations into issues that are likely to impact many readers, with evidence of enacting real change,” said another.

An outstanding achievement and we’re very glad to have Marc and the consistently excellent, and equally award-winning, Mr Norwood on board. Keep up the great work, chaps!

Until next time…

Why now is the best time in years to downsize your home

House prices are on the turn and older homeowners are taking advantage

By Ruth Bloomfield.

Clive and Gina Collins are a practical sort of couple. Barely had their youngest daughter left home before they began to consider what to do with the family house they had lived in for 26 years. Last summer, after a pandemic spent ruthlessly decluttering, their decision was made. They sold the 1920s house and moved into a brand new apartment.

Their timing has been impeccable. A perfect storm of factors – household bills rocketing, interest rates rising and warnings that house price growth will start to taper off – means that there has rarely been a better time to downsize.

As mortgage rates rise, the market could now be peaking. Buying agent Camilla Dell of Black Brick, said savvy downsizers were already trying to “cash in before the market takes a turn”.

Lucian Cook, of estate agency Savills, agreed that the market appeared to be at a turning point.

“But we have just had a strong burst of house price growth, the first for several years, and that means the gains made on an existing home will far outweigh the increased costs of buying a smaller property, even with stamp duty,” he said. “And as we go into winter, the cost of running and heating a larger home will start to become a greater issue.”

‘I would have been spending £1k a month on bills’

The Collinses, both 62, had raised their two daughters in a five-bedroom house in Bushey, Hertfordshire. With its large garden it was a great home for children, but Mr Collins was keenly aware how much it cost to maintain.

“With gas and electricity going through the roof I would probably have been spending £800 to £1,000 a month on bills if we had stayed,” he said. “It also cost a lot to pay gardeners and cleaners.”

New research from estate agent ­Purplebricks suggested that many other homeowners were making similar calculations. More than half of all house hunters would be willing to downsize if it would cut their bills, it found. Of those in the process of downsizing, 60pc were doing so specifically to reduce ­household costs.

Tom Greenacre, of Purplebricks, said: “People’s concerns over increasing energy bills are now translating into real action. Some are taking the significant step of downsizing their home and are moving somewhere smaller to save on household bills, a reversal of the ‘race for space’ we saw at the start of the pandemic.”

The Collinses sold their family house for £1.255m. Their apartment, at Squires Park, Bushey, which they share with their dog, Teddy, cost £860,000. They spent some of the equity they released on furnishing their new home and put the rest into a pension.

Over the past year, while most of the country despairs at rising bills, the couple have seen their living costs drop. Their power bills are down from £450 a month in their old home to around £250 a month.

Beyond releasing equity by buying a more modest home, the day-to-day savings of downsizing can be significant. A study by the AimC4 project suggested that domestic gas and electricity costs were around £15 per sq m per year. Bills have gone up dramatically since the research was done, so these costs are now likely to be closer to £25 per sq m. So moving from a 140 sq m (1,500 sq ft) house to a 65 sq m (700 sq ft) flat should save almost £2,000 a year in bills.

Moving to a more walkable area can also pay, because driving currently costs around 40p a mile, according to the car insurer Nimblefins. Driving five miles to a nearby town three times a week would, on this basis, cost more than £600 a year. And buying a less expensive home will often cut your council tax bills too, although local costs are something of a lottery.

‘It was a big house with a big garden to look after’

Alison and Douglas Gibb’s motives for downsizing were more about meeting their future needs than cutting current living costs. The couple met at art school and bought their six-bedroom house in Gullane, 18 miles east of Edinburgh, in the early 2000s for £316,000.

Although the couple, who have two children in their 20s, have made contributions to a pension over the years, they were painfully aware that they had not put enough aside to live on in retirement. “We had put more into the house,” said Mrs Gibb, 56. “So we always knew that when we stopped working we would need to sell it and downsize.”

But during the pandemic Mr Gibb, 58, who had earned the family nickname of “the janitor” because of all the work he did on the house and garden, started to feel that those plans should be brought forward. “He started to say that life was too short,” said his wife.

“It was a big house with a big garden to look after and he just wanted to free himself to work less and live more.”

In September 2020, they sold the house for £725,000 and later bought a four-bedroom house near ­Berwick-upon-Tweed for £325,000. Their new home is not only smaller than their old one but more energy efficient. As a result, despite rising fuel costs, their energy bills have dropped from £193 a month to £150.

As the couple are self-employed – Mr Gibb is a photographer and his wife a journalist – they needed the capital they had freed up by downsizing to provide them with a long-term income.

“We are not into spreadsheets and yields, so we really agonised about what to do with the money,” said Mrs Gibb. Eventually they decided to invest in property and bought a pair of flats in Edinburgh to rent out.

The Collinses and the Gibbs opted to downsize in their 50s and 60s, and, according to research from Savills, these younger age groups are now far more willing to relinquish their family home than older generations.

Owners in their 50s, for example, own around 22pc of Britain’s property stock and are responsible for 21pc of all sales. Those in their 60s hold 19pc of property stock and make 13pc of moves. But those in their 70s and above, despite owning almost a quarter of all properties, account for only 8pc of house moves.

‘It is something we just had to get on with’

Not long ago Linda and Christian Pegley thought they would live in their family home for ever. They had moved to their three-bedroom cottage on the eastern fringes of Dartmoor in 1983, paying £18,000 for the property. In 2001 the neighbouring cottage came up for sale and they bought it for £78,000. They amalgamated the two properties into a six-bedroom home for them and their two sons, who are now grown up.

Mr Pegley, 74, retired six years ago and devoted himself to the house and its two acres of garden. But after Mr Pegley, who has Parkinson’s, had a couple of bad falls in the sloping garden, they decided to move to a more practical, less remote home. They sold their Dartmoor house for £630,000 and paid £525,000 for a three-bedroom bungalow at the Little Cotton Farm development near Dartmouth.

The couple have invested the bulk of the capital they released in their new home, building a glass-topped veranda, from which they can see the sea, and landscaping the garden.

Today, Mr Pegley said he had mixed feelings about the move. Having neighbours nearby has taken some getting used to after almost 40 years of perfect solitude. On the other hand, their household bills are lower, as are their transport costs, since Dartmouth is nearby. More importantly, their new, flat garden is a lot easier to cope with, and having people living nearby means help is at hand should the couple need it.

“It is something we just had to get on with,” said Mr Pegley.