Is this £175m apartment London’s ultimate ‘giga-prime’ home for the super-rich?

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Is this £175m apartment London’s ultimate ‘giga-prime’ home for the super-rich?

The UK’s most expensive apartment is up for sale, complete with park views, hotel room service on tap and a golf simulator

By Zoe Dare Hall

Nick Candy’s penthouse at One Hyde Park CREDIT: Julian Abrams

With a £175m price tag, property developer Nick Candy’s penthouse at One Hyde Park is in a league of its own. For those who collect homes like trophies, this is the blingiest in the cabinet. It’s the UK’s most expensive apartment. But can it possibly be worth it?

Well, for your £175m (payment by Bitcoin or Ethereum accepted – Candy has said he thinks they’re the next “big opportunity” in property), you get 18,000 sq ft of two-storey, lateral luxury overlooking Hyde Park. There are five huge bedroom suites and an octagonal marble bathroom fit for an oligarch. There’s all the fun stuff too, of course: the champagne room and golf simulator, spa, gym, media room and so on.

And crucially, the penthouse is the pinnacle of the development that redefined luxury property globally. One Hyde Park – the glassy, brassy Knightsbridge apartment block, built with the help of a staggering £1.15 billion loan – rose in 2010 like a sphinx from the ashes of the Global Financial Crisis. Achieving up to 10,000 sq ft, its 68 apartments broke all price records when they went on sale in 2010.

The formal reception room of Nick Candy’s penthouse CREDIT: Julian Abrams

A decade on, Candy has been reflecting on the never-to-be-repeated scheme that catapulted him and his brother Christian on to the world stage. He has mused that One Hyde Park is not quite perfect. With hindsight, he wishes he had installed private lifts to the penthouses and provided more rooftop amenities to make the most of those Royal Park views.

It’s a lesson its newer competitors have learnt. The Bryanston, a super-luxe high-rise designed by Rafael Viñoly, has similarly expansive views over the north side of Hyde Park, and is ensuring buyers soak them up from their large private terraces. One of the ‘super units’, which has yet to go on sale but is likely to be priced higher than the building’s £66m penthouse, includes the largest private terrace in London.

And there’s the odd super-prime development that is giving One Hyde Park a run for its money. Northacre won’t give a number for the penthouse at No. 1 Palace Street, overlooking the gardens at Buckingham Palace, but with a £30m entry price for smaller, lower apartments in the development, you can only imagine. And in late 2020, Savills revealed that a British buyer had spent £140m at No. 1 Grosvenor Square in Mayfair. But that was for the top storey and two lower units, to be combined into one huge residence.

The Bryanston, Hyde Park

So how does Nick Candy justify his astronomical asking price for a single penthouse? “It’s partly about rarity factor,” says Camilla Dell, founder of Black Brick buying agency, “and partly about the world-class location. Its key factors are also security and provenance,” she says. “It has become a famous landmark building with very large apartments overlooking Hyde Park, with very high-quality facilities. You just don’t find many of those.”

This “unique and genuine connection with Hyde Park” is a must-have among clients spending £20m+, comments Ashley Wilsdon from the high-end search agents Middleton Advisors. “It was the first super-prime development and still regarded by man as the best of its kind.”

The super-rich will also pay a high price at One Hyde Park for the convenience of having the Mandarin Oriental as their in-house room service, comments Guy Bradshaw at UK Sotheby’s International Realty. “The staff will know you and look after your every need from the day you move in. That’s the perfect residence for those who have homes around the world and need them to be set up for arrival with short notice.”

No. 1 Palace Street

And then, of course, there is the Candy factor. This penthouse isn’t just Candy-built but Candy-owned. “You’d assume he had cherry-picked the very best residence for himself,” says Dell. “This market,” she adds, “beats to its own drum. In other markets, we’re grilled about prices per square foot and whether it’s good value, but billionaires aren’t so bothered about that. It’s more about buying something prestigious and unique in the very best location.”

The penthouse’s price tag puts it near the top of an elite league of “giga prime” properties, says Peter Wetherell of Mayfair-based Wetherell estate agency, referring to homes for billionaires, priced £100m or more.

There are reportedly 20 properties at this level in London, either already built or in development, according to Wetherell, and any that come up for sale tend to do so under wraps. One exception is 38 Hill Street, a 17,000 sq ft private Mayfair members’ club on sale for £35m, but with the potential to become a £100m home, says Wetherell, if converted back into a residence.

Others in this premier league, adds Simon Barry of Harrods Estates, include numerous addresses in the billionaires’ row of Kensington Palace Gardens and two houses on Chelsea’s Old Church Street. There’s also 3 Carlton Gardens in St James’s, bought by American hedge fund manager Ken Griffin for £95m in 2019, and the UK’s most expensive property, 2-8a Rutland Gate in Knightsbridge, bought last year by Chinese billionaire Cheung Chung-kiu for a reported £260m.

The French Renaissance show apartment at No. 1 Palace Street

As they aren’t currently available, UHNW house-hunters might want to consult Nest Seekers International’s ‘Billionaire Collection’, a global assortment of US$100m+ properties. There’s little that comes close to £175m ($200m), but Candy’s asking price is reasonable, thinks Nest Seekers Europe’s managing director Daniel McPeake.“There is a very straight line thinking behind it. Like a Picasso, there is only a very limited amount of $200m properties. Although the air is thinner, the next $10 billion person is coming up the ranks and will want what you have, and pay more.”

It’s not just the next billionaire rising up through the ranks, though, but the “new best thing”, points out Camilla Dell, who doesn’t feel that One Hyde Park is actually number one in London any more. “No. 1 and 20 Grosvenor Square, and The Peninsula, overlooking Hyde Park, are achieving similar values to One Hyde Park,” she says. “Also, Knightsbridge has lost its shine. We rarely get asked to search there now. Our clients prefer Mayfair, Belgravia – or Holland Park,” she says.

And who is the name behind Holland Park’s new headline scheme, 80 Holland Park? One Christian Candy. “One Hyde Park is no longer the only kid on the block. There is certainly competition now. But the Candy influence affords a certain premium by association,” comments Guy Meacock, director of Prime Purchase buying agency. And it’ll be worth every penny to one billionaire buyer.

How to sell a home in the current property market: expert tips to increase viewings and boost kerb appeal

From a fresh lick of paint to being flexible on viewings, Ruth Bloomfield has expert advice on selling your home.

By Ruth Bloomfield

Although London is generally a sellers’ market right now, particularly for houses, there are always homes which stubbornly fail to sell.

Some are simply blighted — beside a busy road or a rubbish dump, beneath a noisy flight path — and there’s nothing to be done about that. But if this is not the case, you need to rethink your selling strategy.

The obvious issue is pricing, or more specifically, over-pricing. Roarie Scarisbrick, a partner at Property Vision, suggests vendors in this situation take a “reality check”. “Very often agents are too scared to tell their clients the brutal truth about price, especially if they overcooked their valuation to start with,” he says.

Beyond pricing, Caspar Harvard-Walls, of Black Brick, says the other big issues are the agent and access to the property.

“The easiest to deal with is access. As a seller, being flexible as to when potential buyers can view is crucial and if this is not the case, then you need to change it quickly,” he says. “Agents will quickly tire of trying to arrange viewings if the owner or tenant is difficult.”

A change of agent can also give a sale a shot in the arm. “Too many sellers choose their estate agent on the basis of their commission fee or whomever quotes them the highest marketing price and not on who is the best person for the job,” he says. “A good agent should be able to more than cover their fee.”

If your house is looking a bit tatty then it might also be worth spending a bit of money on doing it up, and getting it photographed again.

“At Yopa, we estimate that simply improving your property’s ‘kerb appeal’ with a freshly painted exterior, clean windows, clear gutters, a tidy driveway and a freshly painted front door can boost the value of a property by up to 10 per cent,” says Mathew Loach, regional director for London.

“First impressions count, and the outside of your property is the first thing potential buyers will see, both when browsing online and in person at a viewing.”

How to increase your home’s curb appeal

Paint your front door

Classic, glossy colours such as navy blue, dark green and Downing Street black will have broadest appeal and will make any period property look smart, while greys, taupes and even bright pastel shades are becoming increasingly popular, according to the experts.

Spruce up outside space

In a year when even a simple doorstep has become a major social asset, there’s no excuse for any outside space at the front of your house to look shabby. Climbing plants are a city dweller’s best friend because they can be trained over railings, fences and walls. Plant wisteria to pack a dramatic punch or jasmine, honeysuckle and roses for colour and scent.

Consider your clutter

If you keep bikes or bins at the front of your house, think about how they make your home look. Of course your bins have to live somewhere but consider investing in a bin store or bike shed to neaten everything up.

 

 

 

 

 

 

 

What the stamp duty charge for overseas buyers means for London

By George Hammond

The additional 2 per cent tax for non-UK residents could affect the housing market in a number of ways — but will it bring down prices?

A year ago this week, England’s housing market was temporarily closed as part of the first national coronavirus lockdown. Thousands of buyers were left stranded on the sidelines, unable to view homes or move forward with purchases. When restrictions eased seven weeks later, domestic house-hunters rushed back into the market.

But the number of international buyers, crucial to the property market in central London, has remained significantly reduced, due to limits on international travel. What is more, from April 1, non-UK residents will have to pay an extra 2 per cent stamp duty charge on any property bought in England and Northern Ireland.

With the added costs, will overseas buyers still want to invest in central London property when travel restrictions finally lift? “It’s the million dollar question,” says Chris Jones, a buying agent in the capital.

Thanks to the additional stamp duty and the strengthening of the pound against the dollar over the past year, overseas buyers will find a very different market to the one they were turned away from in March 2020.

“Dollar or euro buyers who were in the market before the pandemic might return to find that the whole show is going to cost them 10-15 per cent more than the last time they were here, which will hurt,” says Roarie Scarisbrick, a buying agent at Property Vision.

Overseas buyers are also facing the realities of Brexit and, for investment buyers, sharp drops in rents since the start of the pandemic that have squeezed already thin rental yields.

The new tax in particular will make non-resident buyers pause, says Scarisbrick. In London’s prime markets, the added costs are significant. On a £3m home, the surcharge for non-domestic buyers buying a second property will add £60,000 in taxes, bringing the total stamp duty bill to more than £423,000.

Across all price bands, the prospect of the tax has encouraged some buyers to accelerate their plans. Canadian Alex LeRose, 30, and his partner moved to buy “sooner rather than later” in order to avoid the new charge. LeRose says he also wanted to lock in a saving from the stamp duty holiday, which waives the charge on the first £500,000 of any home purchase. That holiday was originally scheduled to end in March, but has since been extended and will continue in some form until the end of September.

“Home ownership seemed out of reach if we didn’t take advantage of buying before the end of March. I think it was our only window of opportunity for a while,” he says.

 

Will the new stamp duty charge reduce property prices for others?

Introducing the new tax for overseas buyers “will help make house prices more affordable, helping people get on to and move up the housing ladder in line with wider objectives on home ownership,” according to ministers.

But while property experts blame stamp duty reforms in 2014 and 2016 for reducing prices in central London, the new non-resident charge may not have the same result. Those tax hikes hit buyers across the board. As a result, “while the buyers have written out the cheques, it is really the sellers who have paid as prices have corrected by the same percentage or more,” says Scarisbrick, referencing price falls in the expensive parts of London that have been hit hardest by tax rises in recent years.

The new surcharge, meanwhile, will only affect a narrow group, making it harder for overseas buyers to negotiate with sellers. “It will be a difficult argument for a buyer to say that they will simply pay 2 per cent less, if a seller would rather hold out for a UK buyer who isn’t affected,” says Scarisbrick.

Camilla Dell, a London buying agent with Black Brick, thinks the new charge will not derail overseas buyers completely. “It’s an additional cost, but you have to balance that with how a [prime] London property looks to an overseas buyer at the moment: prices are still down 20 per cent from the peak [in 2014]; the pound is up but still cheap compared to the dollar.”

On the ground, “people are not saying ‘we decided as a result of the 2 per cent surcharge that we’re going to hold off [buying],’” says Tim Hyatt, head of Knight Frank’s UK residential business. But, while he says the exchange rate and the cost of debt are much bigger factors, he is expecting a hiatus in overseas sales “while people work out what’s going on” after the surcharge comes in.

 

Absence of overseas buyers hits central London

The decisions made by international buyers will cause ripples across the capital’s housing market. There is no universal record of the proportion of London buyers from overseas, but there is a considerable international presence in the capital, particularly in the priciest central neighbourhoods and in the market for newly built flats.

In so-called prime central London, areas such as Mayfair and Knightsbridge, just under half of all buyers registered by Knight Frank in the past decade have been from overseas, according to the agency. Last year and in the first months of 2021, that proportion had slipped to a little more than a third, says Knight Frank.

The absence of overseas buyers over the past year has already changed which areas are most in demand. A prolonged decline in international interest would only make the transformation more marked.

“In the last year we’ve looked at areas popular with domestic owner occupiers: Hampstead Village, Richmond, Barnes. Those have been the real winner areas,” says Jo Eccles, managing director of Eccord, a property search and buying agency. “The areas which have faltered are the more international areas: Mayfair, Belgravia and Knightsbridge have been really hurting.”

Buying a London home, once a relatively straightforward transaction for overseas buyers, has become far more complicated, involving circuitous travel arrangements, quarantines and the risk of unexpected lockdowns. Many have stayed away as a result, meaning the pockets of London most popular with overseas clients have not shared in the price rises seen elsewhere in the country.

In the year to December 2020, prices fell 0.4 per cent in prime central London, according to Savills. In England overall, average prices increased by 7.3 per cent in the same period, according to Nationwide, the building society.

Overseas buyers have also been an outsized presence in the market for new homes in recent years. According to Molior London, which monitors the capital’s new-build housing market, overseas buyers accounted for at least a fifth of all sales to individuals last year.

Nic Budden, chief executive of estate agency Foxtons, says the level of overseas interest in London has dropped significantly in the past year. “Foreign buyers have diminished. There are new homes getting sold overseas directly, but that’s lower than it was in the past few years. In lettings, overseas students have basically disappeared completely.”

Tim Craine, head of research at Molior, says the tax will not deter all overseas buyers. “People buying a flat for a child [to] give to in 20 years [or those] wanting to get money safely overseas and protected by English law will be less worried about a stamp duty surcharge.”

Speculators, however, are likely to be put off, he says. International buyers eyeing luxury London flats as an investment, rather than a home, have been criticised for fuelling price rises in parts of the capital. But Craine says we should not be so quick to dismiss these “risk-taking” buyers. By buying up apartments before they are built, foreign investors have shouldered much of the financial risk faced by developers in the early stages of a project.

“They have played a massively important part in giving confidence for developers to commence,” he says. “Their absence means development is not happening.”

According to data from Molior, work started on almost 34,000 new homes in London in 2015. By 2020 that had fallen by almost 50 per cent, to 17,856 homes.

Raising property taxes risks driving buyers away from London and slowing down building, says Rob Perrins, chief executive of developer Berkeley Group, “I think London and the UK has to be careful that other cities do not become more alluring. We have to stop taking London for granted . . . Increasing tax makes people move elsewhere,” he says.

According to Molior, Berkeley Group is currently responsible for more sales to overseas buyers than any other developer in the capital.

 

Beyond the pandemic

Before any new tax is introduced, estate agents expect a flurry of sales — across the UK, transactions surged in February, as buyers tried to beat the original March deadline of the stamp duty holiday. But no rush in foreign buyers has been forthcoming this time.

“That hasn’t come in because of the travel restrictions,” says Dell. “We have seen some activity from clients quite keen to avoid paying the excess but not as much as one would have hoped. Not everyone is willing to fly and to quarantine.”

But sellers are optimistic about what comes next in part because of the UK’s rapid vaccine rollout. According to Scarisbrick, “Developers are confident that the cavalry will arrive once planes are back in the sky [and] will be populating south-east Asian cities with their roadshows as soon as they can.”

Key to understanding demand is the fact that most overseas buyers, like their domestic equivalents, “have their own motivations for buying and are not just speculators and investors”, says Scarisbrick. “Some are relocating, others have children here and plenty are insuring against political and economic instability in their own jurisdictions.”

International buyers looking for a new home in which to settle are unlikely to be put off by a tax hike, in other words. “The point is they have a practical need to own here and will have to roll with the punches,” says Scarisbrick.

Budget 2021: Is Rishi Sunak wise to extend stamp duty holiday for property buyers?

By Alice Haine

The pros and cons of the tax break that offers up to £15,000 for UK residents and overseas investors

UK Finance Minister Rishi Sunak will extend the stamp duty holiday until the end of June, which will prevent property transactions from collapsing when the deadline ends on March 31.

Mr Sunak has come under pressure from the property sector in recent weeks to extend the stamp duty land tax (SDLT) break he unveiled last July, after the conveyancing system struggled with a surge in transactions.

Ninety per cent of those polled in Knight Frank’s latest sentiment survey said the tax break should be extended in the budget on March 3, while a quarter of the 500 people polled said the holiday should be tapered to afford extra time for buyers to complete.

Now Mr Sunak will reportedly use the March 3 budget to move the tax break to June 30 to bolster the market as the country recovers from the economic fallout of the Covid-19 crisis, according to The Times.

Henry Faun, partner and head of Knight Frank’s Middle East private office, said many in the housing sector “have called for an extension” to England’s stamp duty holiday, and its equivalents in Wales and Scotland, which offered a saving for both UK residents and overseas buyers of up to £15,000 ($21,126) on the closing price.

Moving the deadline prevents sales “from potentially falling through,” Mr Faun told The National.

Under the tax break, the first £500,000 of the purchase price of a main residence in England and Northern Ireland is exempt from SDLT.

Extending the policy could cost the Treasury about £1 billion, The Times said, at a time when Mr Sunak is set to spend billions of pounds in state support for the economy over the next four months. This is in line with Prime Minister Boris Johnson’s cautious lockdown exit plan, which sees businesses potentially facing restrictions until June 21 when the economy is set to reopen fully.

However, some analysts have criticised how the tax break was applied to the housing sector.

Camilla Dell, managing partner at Black Brick, which helps Middle East investors purchase property in the UK, said the SDLT holiday created competition in the market and benefited every segment of society from first-time buyers to wealthy investors, with even overseas buyers able to cash in.

“It should have been a help for first-time buyers, rather than a blanket free-for-all, because even my wealthy clients, who are buying second homes or buy-to-let investment properties, are benefiting and I’m not sure that’s right,” she said.

The SDLT holiday caused a mini-property boom in the UK, with the housing market accelerating towards the end of last year in direct contrast with the faltering economy.

British house prices soared 8.5 per cent in 2020 to an average record high of £252,000, as the market benefited from the temporary tax break and pandemic-induced demand for more space, the Office for National Statistics said.

Some agents say the tax break pushed prices higher than the saving made on the SDLT holiday and have reported rising competition for properties, with several buyers chasing a single home.

In one scenario, three buyers competed for a detached home in West Sussex, with the property eventually going to a buyer willing to pay almost £50,000 above the asking price, a local agent reported.

The country’s housing market also saw more mortgages approved in 2020 than in any year since 2007, according to the Bank of England, with the strong lending figures again attributed to the tax holiday.

In January, there were signs that ending the tax break would dampen the market, with Halifax reporting a 0.3 per cent drop in the average British house price to £251,968 in January from December, the biggest monthly fall since April last year.

This may have spurred Mr Sunak’s decision to extend, along with the huge backlog in property deals that meant transactions were at risk of collapsing if the SDLT ended in March.

Property analysts TwentyCi warned earlier this month that one in five of the 457,358 purchases made subject to contract at the end of 2020 could fall through if the SDLT holiday ended on March 31, resulting in losses for homebuyers, sellers and service providers.

When it comes to other property taxes, such as Capital Gains Tax, Ms Dell said she does not expect “anything aggressive from a property tax perspective in this current budget”

Mr Sunak needs tax rises of about £60bn to ensure a balancing of books following the Covid-19 crisis, the Institute for Fiscal Studies said.

The UK think tank said the March budget comes too soon for drastic tax changes, as the government must prioritise preserving jobs and businesses.

While Mr Sunak is expected to increase corporation tax gradually from £0.19 to £0.23 by the next general election scheduled for May 2024 to raise £12bn, there is speculation he will also increase rates of CGT rates – a tax on the difference between an asset’s value at acquisition and its value at disposal.

“Such speculation has been fuelled by the chancellor’s request in July 2020 for the Office of Tax Simplification to undertake a review of CGT and has, no doubt, been intensified by the need of the government to raise funds to cover the costs of the Covid-19 pandemic,” Osborne Clarke Tax Group said.

While the company said CGT is “ripe for reform”, the March budget might not be right time for change.

The current standard rates of CGT for residential property are 18 per cent within the basic rate tax band and 28 per cent thereafter.

“Compared to the basic rate income tax band of 20 per cent and higher rate of 40 per cent (or 45 per cent for the highest earners), it is no surprise … that this disparity creates an incentive for taxpayers to arrange their affairs in ways that effectively re-characterises income as capital gains,” Osbourne Clark Tax Group said.

“The OTS highlight that more closely aligning CGT rates with income tax rates has the potential to raise a “substantial amount” of £14bn a year for the Exchequer.”

Ms Dell doubts that changes to the CGT system will come into force on March 3, but warns buyers to expect a property tax overhaul further down the line, which will hurt owners in London and south-east England where prices have surged in recent years.

The IFS, meanwhile, urged Mr Sunak to scrap SDLT altogether, calling it “a particularly damaging tax”.

“Its abolition would stimulate the economy and could be introduced alongside a commitment to replace the forgone revenues with a reformed and revalued – and therefore fairer – and increased council tax,” the IFS said.

Mr Faun said a positive reform of SDLT and local council taxes could see them replaced with a levy based on a percentage of a property’s value, which would be paid on an annual basis.

“For Middle Eastern investors this could mean a higher running cost of their home in England, however, they would save on the upfront running costs,” he said.

For now, the extension to the SDLT holiday will allow Middle East investors to continue to benefit from the tax break, something Ms Dell said makes “no sense”.

Overseas buyers are set to be hit with a 2 per cent surcharge on UK property purchases from the start of April, on top of an existing 3 per cent levy for buying a buy-to-let or second home.

“It doesn’t make any sense to extend the stamp duty holiday for overseas buyers,” she said. “On the one hand you’re taxing foreigners more and on the other you’re still giving them that perk – it’s two taxes going in opposite directions.”

What buyers want now: Top town & country buying agents compare notes on post-lockdown demand trends

Two top buying agents – one focused on prime London, and one on prime country houses – reveal what is on their clients’ most-wanted lists.

The Covid-19 pandemic has affected lives in many ways, and talk of property markets may seem inconsequential in comparison to some of these. But the lockdown has had a dramatic effect on the resi sector, with some potentially long-lasting shifts in home-buyer priorities.

At the top end, luxury property buyers seem to be re-assessing what they value most in a prospective new home. Space to live and work has risen up the priority list in both town and country, while location has in some instances become less of a factor.

Two top buying agents – Camilla Dell, focused on prime London, and Charlie Wells, focused on prime country houses – reveal what is on their clients’ most-wanted lists.

Mayfair-based Black Brick has been sourcing homes for wealthy and corporate clients in London and the South East since 2002. Founder and Managing Partner Camilla Dell talks us through the changes she is seeing in her clients’ priorities since the Coronavirus lockdown:

In Town: Camilla Dell of Black Brick

What’s Going Up:

  • Home offices. With many large corporations struggling to navigate how to bring people back to work safely, let alone get on a tube or airplane, top of the list right now is home office space. Clients want spaces where they can hide away from the kids, ideally with sound-proofed walls, but lots of natural light and adequate space to avoid hunching over a small desk, making it a pleasant space to work for extended periods

  • Wifi speed. There was a time a few a years back when buyers would ask for space for large clunky servers. The use of the “cloud” and technology like Office 365 negates the need for large servers with air conditioned units to keep the room cool. Whilst tech has moved on, fast wifi speed is still critical.

  • Basements / cellars. We’ve become accustomed to working out by ourselves with an online class or 1:1 personal trainer on Zoom. So many buyers are happy to convert a basement or cellar into a personal gym. Clients are also asking for space to consider building a swimming pools, sauna and spas

  • Gardens with space for veg patches. A big trend for those with gardens and some extra time on their hands, is buying and planting veg. Over recent months, many have valued self-sufficiency, showing children when their food comes from and the satisfaction of growing your own. The kitchen is evolving into the kitchen garden. And much like the premium that goes on a “starchitecht” property, gardens which have been designed by a celebrity garden designer have added cache.

  • Sustainability features. Clients see the benefits of developments which have recycling and waste disposal services to help control rubbish, especially where public serves have been under strain with reduced pick ups

  • Larger kitchens/ dining areas. Going forward, we expect people to do more home entertaining with a small “bubble” of friends, therefore space to cook and entertain will be higher up the wish list, possibly with personal chefs catering for small groups, with hygiene front of mind.

  • Large play rooms/ space for children to learn/ home school. Once the British winter comes and children can’t get outside as readily, space for children to play with siblings or a small bubble of friends will become the ‘new normal’ – we expect a demand for flexible spaces where children can play as they grow

  • Additional services. This has always been popular, but with an increase in online shopping and deliveries, a property with a concierge or housekeeping services will have added influence. We’re also seeing some developers being clever with added services such as private health care plans built into their management packages.

What’s Going Down

  • Proximity to the tube. The latest news from the BMA that any enclosed spaces will increase risk, means that people will be looking for alternative means of getting to work, or indeed, simply working from home more

  • Proximity to airport links. Similarly, the increase in remote working, will decrease the demand for international travel, so a home on the Piccadilly Line or close to the Heathrow Express will be less important

  • Apartment blocks. Especially those with shared facilities such as pools/gyms will become a lower priority, as people are now adept at training in their own homes

In the Country: Charlie Wells of Prime Purchase

Prime Purchase is the independent buying arm of Savills; it has been representing and advising purchasers across the country since 2002. Hampshire-based Managing Director Charlie Wells reveals what is on their clients’ most wanted list:

  • Number one is the general aesthetic and how the house looks – everyone wants a home they perceive to be attractive. This is where it gets tricky as tastes differ. One buyer may want a period property with high ceilings and Georgian splendour, another may want a more modest farmhouse or cottage. Some will want to preserve existing features and make the most of them, others will say they want period charm and then replace that charm with clean lines and modern finishes. It is all down to personal taste.

  • The need for square feet and acreage is important with buyers potentially requiring room to accommodate a hobby. The space you need and the space you want are two different things so never sell off outlying land until the main asset is sold.

  • Privacy and seclusion, particularly in the country, are high on the must-have list. Privacy comes in different forms, from not wanting your neighbours to see you from their upstairs study window to not seeing another house at all. For most people, it’s about not seeing anyone else and ideally not hearing them either.

  • Absence of blights, usually planes, trains and automobiles but also pylons and electricity wires which blight the view. However, the very presence of a blight can make a house affordable to the buyer so it’s not the end of the world to have them. Noisy neighbours tend to be highly undesirable, but it comes down to what you are used to – I live near a farm that houses 350 cattle in winter. Their bellowing and general smell is reassuring to a country boy like me but others might not be able to cope.

  • Train, rail and road access. Is your property an hour from the capital or two or three? Buyers have their limits whether they travel daily, weekly or occasionally. Covid-19 and homeworking will, I think, relax people’s views on a slightly longer commute in order to gain more space.

  • Proximity of schools, whether a good state primary and secondary, or private. Many of our overseas buyers won’t consider boarding schools and need to live near a good private school so they can take their children to school every day.

  • Surrounding countryside. Having quiet country lanes and a network of public rights of way for walking, running, cycling or riding have become especially important recently.

  • Proximity to an attractive town or large village. Most buyers want some decent pubs, restaurants, cafés and bars fairly nearby – most popular areas will already have these.

  • Friends, old and new. People want to be near their friends or have the opportunity to plug into a new social network for themselves and their children. Schools, pubs and sport all play a big part here.

English property market rebounds on pent-up demand

Surge above pre-coronavirus levels likely to be shortlived as economic impact bites

A release of demand for property in England, suppressed by the lockdown, pushed the number of sales agreed in early June above pre-coronavirus levels.  Buyers returned to a market effectively shut from March 27 until May 12, data from the property portal Zoopla, estate agent Savills, and property data company TwentyCi show. The rebound in sales was quicker than most analysts expected. But the surge in transactions — which in some segments of the market have doubled in the past week — is likely to be temporary because much of the demand came from buyers who had been forced to pause moves. TwentyCi recorded 22,893 agreed sales in the first week of June, 6 per cent more than in the same period in 2019, and 54 per cent up on the last week of May.  According to Zoopla, sales agreed in the first week of June were 12.6 per cent higher than in the week leading up to the UK’s lockdown. “This is the first real sign that online viewing and new applicant levels is translating into market activity, though clearly to a degree it also reflects pent up levels in demand that was held back during lockdown,” said Lucian Cook, director of residential research at Savills.  Richard Donnell, research director at Zoopla, said: “This spike in demand will be shortlived as the economic impacts of Covid-19 start to feed through into market sentiment and levels of market activity in [the second half] of 2020.” 

However, added Mr Donnell, the increase in sales was partly also new buyers looking to trade up or move out of London. The recovery of sales in the English regions was far ahead of that in London, according to Zoopla, the hardest evidence yet that buyers were looking to move outside the capital. Wealthier buyers have driven the increase in activity. The 3,028 sales agreed on homes valued at £500,000 or more in the first week of June is 17 per cent more than the number agreed in the same week a year ago. Sales of homes valued under £200,000 — a much larger segment of the market — are down compared to 2019, according to TwentyCi.  “Undoubtedly there is some polarisation in the market,” said Mr Cook. “[Buyers were] those with a stronger financial cushion on which to rely and more affluent households less reliant on lending.” That matches patterns seen after previous economic crises, including the 2008 financial crisis, when affluent buyers returned first and took advantage of discounts.  The average reduction from asking price to agreed sale price is currently around 5 per cent on transactions recorded by Savills, compared to 2 per cent pre-lockdown. Agents reported that properties were selling at discounts of 5-10 per cent, or not selling at all.  Camilla Dell, founder of London-focused buying agency Black Brick, said: “There is quite a big gap at the moment between buyers, who feel the world is not what it was, and sellers, who think they’ll just hang on.”

Meet the estate agents turning themselves into superstar

A new breed blurs the line between the personal and professional 

By Emma Jacobs

Fredrik Eklund, a property entrepreneur and real-estate TV star, was at his local grocery store a few weeks ago. Wearing a face mask and protective gloves, he fired up “Blinding Lights” by The Weekend, then danced — while pushing his trolley past the fruit stand and gyrating in the jam aisle. The video was uploaded to his Instagram account, which has 1.2m followers. It attracted more than 1m views and 14,000 comments. “People want a fun broker,” says the 43-year-old co-founder of luxury real estate brokerage Eklund Gomes Team, who lives in Los Angeles and is author of a book called The Sell: the Secrets of Selling Anything to Anyone.  Many comments beneath his post were appreciative; others criticised him for endangering public health with his elbow bumps. “I remember my heart beating as I pushed the button,” says Eklund, who is also a star of Bravo’s reality-TV show Million Dollar Listing. “I thought, this will make or break me. I have had some criticism — people feel it is tone deaf. That is OK — you can’t please everyone.”  Dancing videos are a trademark flourish to Eklund’s larger-than-life public persona. A previous post was set in a $29.9m house with eight bathrooms. Despite his fear of alienating clients by being playful in a pandemic, he posted it anyway. “In the competitive landscape of real estate, it’s all about being relevant and top-of-mind — as long as you can back it up with real results and knowledge,” he says.

Such logic underlines the risks for property-market professionals in building “personal brands” through social media, and the pressures of trying to sell luxury property in uncertain economic times in markets saturated with high-end developments. That risk was highlighted in January when the London-based property agent Daniel Daggers — a glamorous figure who calls himself Mr Super Prime — resigned from estate agent Knight Frank after posting a picture of a high-end property to his Instagram account, where he has more than 30,000 followers. The Daggers episode raised wider questions about whether estate agents should build personal brands by turning themselves into celebrities and influencers. In doing so, they hope to attract attention to their businesses and the properties they sell. But do they risk their credibility in the process?  It is alleged that Daggers shared images of a house without the owner’s permission. Knight Frank says in a statement: “We are constantly vigilant around our social media guidance and regularly update our policy.” Daggers declined to comment. 

Daggers’ social-media feed is crammed with posts about high-end properties, including a central London penthouse on sale for £12m; a nine-bedroom home with five reception rooms in Knightsbridge for just under £10m and a Highgate property complete with staff accommodation and lift selling for a cool £12m. It also features selfies of Daggers attending a black-tie film premiere, holidaying in Israel and Ibiza, pictures of a sumptuous suite where he stayed with his girlfriend, sports cars in front of hotels — alongside his reflections on the property industry and his career. His attempts at profile building have also highlighted the cultural disparity between the US and UK property market personalities. In the US, which has a property mogul as president in the shape of Donald Trump, reality TV has created a new breed of superstar real estate brokers. As well as Eklund, there is Ryan Serhant in New York (who stars in Million Dollar Listing: New York) and the Altman Brothers in LA (Million Dollar Listing: LA).

Eklund concedes he had reservations before appearing on television. “It was a scary decision. Everyone told me not to do it. In real estate it was meant to be about the property not the agent.”  But the career move paid off. “Reality TV has boosted me.” It helped to make the market more transparent, he adds. “Social media and reality TV has given insight into the agents’ lives and allows the viewers to feel like they are in the home with the agent. In a competitive market everyone wants more eyeballs on the property.” Eklund has no divide between his private and public life. His Instagram account shows him with his picture-perfect children and husband, dancing with his kids to “Let It Go” from the film Frozen (with comments from the actor Rebel Wilson), enjoying a birthday breakfast in bed with his family and splashing in the sea.  Then, of course, there are the houses. Some he owns personally, such as the 5,144 sq ft Connecticut summer home with a pool and sauna that he hopes to rent out for $150,000 for the warmer months. But most of the properties he is selling on behalf of clients, such as the $9.7m house in 150 acres of land near Stockholm and the $29m mansion in Los Angeles.

A profile is good for business, he says. “You show all the colours of your personality. I’m not saying it’s raw. It’s thought out. I choose and think about what to share. If you follow the account, you hire me and you know what you get. That’s really good in sales.” Mauricio Umansky, celebrity founder and CEO of the Agency, a brokerage that sold the Playboy mansion in Los Angeles, has 400,000 followers on his Instagram account — though that is less than a fifth of his wife’s followers. She is Kyle Richards, star of the reality TV show The Real Housewives of Beverly Hills. 
 

On social media, he too mixes the personal with the professional, showing pictures of himself working out in a branded T-shirt in his home gym, skiing and hanging out with his wife in a luxurious tepee.  The properties are there, too: a restored 1926 Hollywood home with a castle-like exterior; a Beverly Hills house that featured in The Godfather, offered at $125m. Umansky says his agents are independent contractors and not bound by employee rules. However, “If they were to break a confidentiality agreement and put [a property on] social media, that would be grounds for letting someone go.”
 

Like Eklund, building a profile makes business sense, he says, citing the sale of a $35m estate to a celebrity who first saw it on Instagram. Jenna Drenten, assistant professor of marketing at Loyola University Chicago, researches social media and professions. Instagram, she says, stokes the property appetite, allowing everyone to see seductive behind-the-scenes images, many of which were once only accessible through physical tours, with agents as gatekeepers. The UK does not have a breed of superstar agents like in the US, despite Britons’ appetite for property television programmes such as Grand Designs. Andrew Perratt, head of country residential at Savills, says this is in part due to the nature of the industry.  The whole influencer thing is so big that brokers have seen it and applied it to their own world Melanie Everett “The UK doesn’t have a US-style brokerage system, in which independent contractors work together under a brand. In the US, [agents] are their own brand, so they have to promote themselves.” At Savills, a UK-based business that operates all over the world, individual agents are discouraged from building their own profiles. One London agent, who prefers not to be named, sees a cultural difference between the US market and UK. In the US, he says, there is no difference between private and business life. Instead, there is a preference for “perfectly conspicuous”. “If you sell self-deprecation in America it’s like selling soiled underwear.” Henry Pryor, an independent UK buying agent and commenter who is active on Twitter, believes this is an outmoded view of the UK industry. While agents do not have profiles like their US counterparts, developers have hardly been shy and retiring.  The Candy brothers, for example, are British property developers who were often photographed at celebrity events, with one marrying an actress-turned-pop star. Nicholas and Christian Candy, the developers behind the development One Hyde Park, opened in 2011 and once the most expensive residential development in the world, portrayed a flashy lifestyle that was key to marketing their high-end properties. “The property business is based on people rather than brands,” says Pryor. “People want individuals — they pay a premium in America to get them. It’s like getting celebrities to turn up at an event.” There are signs that social media is changing the property industry in the UK. Grant Bates, associate director at Hamptons International, is based in north London and has an Instagram following of more than 10,000. A sharp dresser, he posts his musings on the property market, video tours on interiors as well as details of Georgian town houses and Victorian villas. 
 

Bates says he is encouraged to create his own brand as well as his employer’s. While in the UK the employer’s brand is king, he says that social media allows employees to personalise it. “Much of our business comes via word of mouth or personal recommendation and social media can certainly help in this respect.” In north London, Bates says, 15 per cent of his sales last year were generated via Instagram. Chicago-based Melanie Everett, an independent agent who specialises in urban residential property, says her Instagram account is half private life, half property related. Her Instagram stories include buyers in their penthouse, a “chill dude” and his first condo, and a couple in their town house. Another is about her life, including Bible study, a manicure and a four-course restaurant dinner.

Everett detects a generational difference in attitudes to social media, too. “The whole influencer thing is so big that brokers have seen it and applied it to their own world.” Millennials, she says, see social media as an extension of working life. Younger buyers want to know about the local community and lifestyle, not just the property — that is easier to portray through social media than brochures and web postings. Eklund adds: “In the beginning people were so horrid at [social media]. Not everyone should do it. It’s a skillset. I have more followers than some big real- estate magazines have readers.” He is unconcerned that most of his followers are unlikely to buy one of his properties. “No one knows where the market’s going to come from,” he says. “It used to be that you knew all the buyers in the area and controlled the area. We don’t know where buyers are going to come from. You need more eyeballs.” In recent months the coronavirus pandemic has suspended luxury-property markets, many of which were struggling with oversupply, including in London and Manhattan. The virus hit just when New York’s luxury market appeared to be recovering after a slowdown brought on by a glut, as well as a disappearance of Chinese and Russian buyers due to geopolitical tensions. Developers and agents were also dealing with a rise in the city’s so-called mansion tax last year. 
  

The virus has also interrupted the normal business of client meetings and viewings — although in some states in the US, including California, the rules have been relaxed. Social media has been an effective way to reach housebound sellers and buyers in lockdown. Over the past few months in Chicago, Everett’s social-media strategy has been honesty. “I don’t want to send the message that business is booming and everything is great, because it’s not. Coronavirus has been a gut-punch to my industry. I’ve been open about my anxieties online, and will continue to do so.”  In one post she talks about her week being “filled with anxiety and fear”.

Another problem for agents, of course, is privacy. Drenten points out that social media increases visibility and “potential criminals can see what the layout of a house is and can determine if it is vacant, in just a few clicks. They can even virtually walk-through the home through virtual-tour technologies.” In the UK, says Camilla Dell, managing partner of Black Brick, an independent property agent, some high-end sellers do not want an online presence due to “confidentiality and security . . . The property might have artwork and family photographs. Private individuals don’t want that kind of exposure or need that kind of exposure.”  Then there are the rude posters, whom Umansky brushes off. “They can say, ‘I hate the rich’. We’ve had properties, with people saying, ‘I hate that house, I hate that style.’ “The more followers you get, the more negativity you get.”

Insight – have Asian investors in the UK property market increased?

By Matthew Lane

International investors make up a big chunk of Britain’s second home market, especially in London. Many of these investors hail from the Far East, but how is this Asian demand for property holding up during the coronavirus crisis? Has it even increased in spite of Covid-19 thanks to the capital’s long-established safe haven status?

Here, Property Investor Today checks in with a number of industry experts to find out more.

Conditions remain good for buyers

Caspar Harvard-Walls, partner at leading buying agency Black Brick, says the likely quarantine rules which will see anyone coming into the country needing to isolate for 14 days ‘will, of course, have a very significant impact on the numbers of international buyers coming to the UK in the coming weeks’.

However, he doesn’t believe it will affect those buyers who are thinking of purchasing off-plan. “The combination of a weak pound, motivated developers and an Asian market keen to diversify, may well lead to a surge in the number of Asian buyers looking to invest into UK property,” he adds.

“As the political situation in Hong Kong worsened towards the end of 2019, we saw a significant amount of new clients from that region looking to purchase property in the UK, to ensure that they had a plan if the instability continued,” Harvard-Walls continues.

“Whilst Covid-19 has naturally taken pre-eminence in everyone’s minds over the last few months, it does not mean that the situation in Hong Kong is any better than it was six months ago.”

Once lockdown is eased, Harvard-Walls says it will be very interesting to see whether the protests against Chinese interference restart and, if they do, he says we should expect a wave of Hong Kong dollars being spent on UK property.

Pantazis Therianos, chief executive at real estate investment company Euroterra Capital, which has a particular interest in Prime Central London, says his firm has definitely seen an influx of interest from Asian investors.

“In fact, most of our best offers have come from Asia,” he claims. “There are several factors at play; one of which has to be the current currency exchange rate, and having property which appeals to this audience’s priorities.”

He said Euroterra Capital is known as ‘London’s premier garden square property developer’ with all of its properties sitting close to the capital’s prestigious Royal Parks.

“We are seeing the need for outside space and gardens become increasingly important post-Covid-19,” Therianos adds. “But there is also that fact that the UK offers world-class education opportunities, when [investors are] thinking long-term for their children.”

He concludes: “Generally international investors are after a good deal, and the UK is one of those places for Asian investors, as is the USA, Spain and Italy, for example.”

No increase, but still active

According to Simon Barry, head of new developments at Harrods Estates, there has been no increase in the number of Asian investors.

However, ‘Asian investors have continued to be active in terms of enquiries, offers and interest’, making them the largest single group by region over the past three months.

“Anecdotally, Asian clients have told us that their cultures are more adapted to outbreaks of flu-related diseases and familiar with the precautions needed to halt their spread,” Barry says. “We were surprised when Asian clients were warning us at the beginning of March of the severity of Covid-19, but equally they seem to be more optimistic about the ability of our economies to recover.”

He adds: “We also hear that economic slowdown in China and its knock-on effect through South East Asia is a contributing factor in diverting private investment away from the region.”

Barry says Harrods Estates, which is part of the Harrods Group and has been going strong since 1897, has spoken to several Chinese students – investors and tenants – recently. All of them, he says, assume courses will resume in September and are committed to returning to London.

“Again, they seem to have more confidence in the UK’s ability to contain the virus than many of our own commentators.”

Mimi Capas, head of sales for Aspen at Consort Place, a Far East Consortium (FEC) development, is currently operating out of Hong Kong – so is uniquely well-placed to offer an insight into how the Asian market views London and the UK at present.

“From my position, working in the Hong Kong office of FEC, it’s back to business for many Asian clients. There are a few day-to-day changes such as the way restaurants, coffee shops and cafes are limiting numbers, and Karaoke bars remain closed, but the Asian market has experienced similar viruses before, such as SARS, so there is a pragmatic view regarding economic recovery and a desire to move forward.”

She says that many are still focussed on having investments in Europe, with the UK capital remaining a particularly hot destination.

“London is still seen as a great place to educate children and right now the currency exchange rate is attractive for placing deposits on off-plan new developments such as FEC’s flagship project, Aspen at Consort Place in Canary Wharf.”

She adds, in respect to Aspen at Consort Place, that many Asian buyers ‘get’ Canary Wharf and the way that the district is organised with inter-connecting malls and offices, well-maintained modern apartments in close proximity to each other, and landscaped gardens.

“This translates very clearly with the way that cities such as Hong Kong are organised so there is a familiar appeal,” she concludes.

Property that provides luxury and prestige

Domenica Di Lieto, chief executive of Chinese marketing consultancy Emerging Communications, says for developers and agents pursuing the rising number of residential property buyers from China, it is important to target sales prospects based on what they want to buy.

“At top of the price ladder are the premium and super-premium buyers, who spend typically between £3 million to £5 million, but often much more,” she explains.

These buyers, she adds, are looking for asset diversification – but just as importantly, they want property that provides luxury lifestyle and prestige.

“They may live in the UK, be planning to move or retire here, but properties bought by this demographic are used mainly as a second home, or a place to stay when on frequent business trips,” Di Lieto continues.

“Often a premium property will become home for children to live in full-time, or used for family holidays.”

Just below these premium investors are high net worth families that spend more than £1 million, but less than £3 million.

“They look to buy in London, or surrounding areas, and usually want a home for family use either full-time, or part-time,” Di Lieto says. “However, a substantial number fall into the category of dedicated investor, and it is important to note that all property bought with a view to being occupied personally or by family is also viewed as integral to building diversified investment.”

Next on the list in terms of property price, Di Lieto says, are the families of students and recent graduates studying or working in the UK. They typically seek property under £500,000, but there are notable exceptions to this figure.

“For example, Knight Frank created headlines when it sold a £5 million Centre Point flat to a family who wanted it for use by their daughter studying at University College London,” Di Lieto adds.

Families of students typically buy two-bedroom flats, with one being used by offspring studying at a nearby university, and the other rented out to help with costs.

Second rooms, though, are often kept free for use by visitors, which Chinese students receive from home several times a year. New-builds are preferred due to lower maintenance requirements, and they like flats because they are easier to manage compared to houses – important to owners living in China.

Student-related buys, Di Lieto continues, rarely include houses unless it is at the top end of the market, particularly above the £10 million price range.

The other major Chinese buying group are small-time investors and less sophisticated buyers looking for property that they may one day occupy. Equally, it must perform well as an investment vehicle.

“For these buyers, the top of the price range is usually around £400,000,” Di Lieto says. “Buying criteria is most frequently met in northern cities, particularly Manchester and Liverpool, which after London are the second and third most popular cities for Chinese buyers. Though this profile of buyer may reside at the lower end of the market, they often own several properties, and are frequently opportunists that will extend portfolios at short notice if they see the right opportunity.”

Di Lieto says that, while it’s helpful to understand the key property buying demographics from China, and what they look for, it is important to remember that like individuals everywhere, they are all different with different needs.

“The greatest success in selling to Chinese buyers comes from understanding what properties appeal to which audiences, and targeting them using applicable selling points,” she advises.

“China is the most sophisticated consumer society anywhere, and people are highly pampered in terms of service levels, and marketing communication to match. They do not expect any company from the West to mirror what they are used to at home, but they do expect those trying to sell to them to create dialogue that is relevant, and not part of a mass messaging process.” 

How to avoid getting into negative equity if house prices fall: the latest property advice

House prices are likely to fall, which means buyers with high LTV mortgages could find themselves with assets worth less than they borrowed

By Melissa Lawford

Analysts disagree on how much UK house prices will fall due to the coronavirus outbreak and subsequent market freeze, but the consensus is that they will take a hit.

Many buyers are worried about getting into negative equity as soon as they have purchased their homes. This means that you own a property that is worth less than what you borrowed to pay for it.

Buyers who have purchased with high loan-to-value mortgages are most at risk. If you have purchased just 5 per cent of your property with cash, for example, you will quickly be in negative equity if house prices fall by 13 per cent, as forecast by the Centre for Economics and Business Research (CEBR).

But that would not mean that you have to immediately sell your house at a loss. Here, we look at your options, and what buyers can do to protect themselves.

What happens if you get into negative equity?

“The biggest misconception about negative equity is that people think they’re suddenly going to be repossessed,” says Nick Morrey, of John Charcol, an independent mortgage broker. “That couldn’t be further from the truth.”

If you are able to wait out the market until prices climb, you should be fine. “Over every five year period, prices have ended up higher, even if there is a crash in the middle,” says Morrey. 

Most analysts are predicting a “V-shape” economic recovery after lockdown is lifted, and both Capital Economics and Knight Frank expect house prices to return to growth in 2021. “If you do get into negative equity, hold on,” says Tim Hyatt, of Knight Frank.

Most lenders have removed high loan-to-value mortgages for new purchases, says Morrey, but it is still possible to find options for transfers, as these don’t require the lender to send a valuer to the property. If your mortgage deal is coming to an end, talk to your lender about what options you have for switching.

If you’re not able to transfer, you will be moved to a standard variable rate mortgage when your current deal ends. While the costs could be higher than what you were paying before, the difference will be mitigated by the fact that the Bank of England base rate is currently at a historic low of 0.1 per cent.

What if you have to move house?

If you’re in negative equity and you can’t sit tight, your situation is more problematic. You will need permission from your lender to sell if the sale price is likely to be less than the remaining value of the mortgage. And you will be personally responsible for making up the difference in value.

A better option is to contact your lender and ask for consent to let out the property, says Morrey. In other words, you can become an accidental landlord. 

Be wary that rental values are likely to take a hit, particularly with the expected influx of stock from the short-term lettings market with the collapse of the travel industry. But hopefully, the rental income can cover your mortgage payments and free up your disposable income so that you can rent elsewhere while you wait for property prices to recover.

Is now a good time to negotiate a deal?

The Government has issued strong guidance against all but essential house moves during lockdown. While sales can still technically proceed, the market is a minefield. Many chains are falling through and some buyers can’t meet their completion dates.

When lockdown lifts, however, some buyers might consider the market an opportunity. If house prices are falling, “you’re likely to be able to make a cheeky offer,” says Morrey.

There just might not be much stock to take a punt at. After a crisis, “we will always see a bit of distressed selling,” says Camilla Dell, founder of the London buying agency Black Brick. “There will be some undoubtedly, but I think it will be few and far between.” The Government’s measures to protect earnings, mortgage holidays, and low interest rates will mean fewer sellers will be forced to take big price cuts.

If you are trying to negotiate, “the key to success is understanding your seller”, says Dell. If you know why, or how urgently they need to sell, you have more bargaining power.

You will also have an advantage if you “can demonstrate that you can move quicker, and anyone sitting on cash is in a great position”.

For those that aren’t may find that they simply can’t buy. Lenders have withdrawn high LTV mortgages from the market en masse. The available mortgage offering has shrunk by nearly a third and you will likely need a deposit of at least 20 per cent to secure lending. 

Which parts of the country will be safest to buy in?

In the immediate term, the impact of coronavirus and the lockdown will be “very much uniform across the country,” says Lawrence Bowles of Savills Research.

When the restrictions lift, however, “we would expect equity driven markets to recover first,” he says. In prime central London, for example, people are more likely to buy with cash rather than with a mortgage, so purchasers will be able to move more quickly.

Recovery will also be dependent on the local employment markets. According to analysis by the CEBR, 48 per cent of the UK population works across the sectors most affected by the coronavirus lockdown: manufacturing, construction, retail, hospitality and other service sectors.

But their concentrations are highest in particular regions. In Yorkshire & the Humber and Northern Ireland, 60 and 59 per cent of workers are in these industries respectively. Disruption to the job markets here is likely to have a bigger impact on the local housing markets, according to CEBR. 

Buy-to-let investors prepare to swoop on housing market downturn

If house prices fall, investors can pick up properties with higher yields. Especially as rents are unlikely to fall as much as sale values

By Melissa Lawford.

The property market is in limbo: sales are on hold, landlords are struggling, and mortgage searches last month were down 44pc on the previous four-week period, according to the online provider Twenty7Tec.

But some buy-to-let investors are spotting opportunities, and are getting their deals lined up for when the restrictions on purchasing are lifted. The share of buy-to-let mortgage searches on Twenty7Tec saw a small uptick last month. In the capital, prospective investors are “circling”, said Camilla Dell, managing partner at London buying agency Black Brick. “There’s a lot of cash swirling, looking to swoop in,” she said.

While analysts are not anticipating a house price crash, they are forecasting some falls in the short term. The latest survey by the Royal Institution of Chartered Surveyors (Rics) suggested sales expectations in the next three months are the lowest ever recorded.

Savills has forecast a short-term price drop of 5-10pc. “You need only look at the rate that lenders have pulled out their mortgage offering,” said James Tucker of Twenty7Tec. Nearly a third of the mortgage deals on offer have been retracted.

For buy-to-let investors, short-term price falls mean long-term yield increases. In London and the South East, high property prices have meant low yields, leading to an exodus of buy-to-let investors to the North, seeking higher returns. But falling prices have already been boosting rental yields.

House prices in the borough of Kensington and Chelsea were 11.1pc down year-on-year in the last three months of 2019, according to estate agency Hamptons International. This meant the borough recorded the second-largest jump in rental yield of all local authorities in the country. Yields climbed 1.5 percentage points in two years, to 4.2pc.

Similarly, property prices in the City of London fell by 1.7pc, which helped boost yields by 1 percentage point over two years to 5.2pc. If price falls continue, London could open up again to domestic landlords who will be able to get higher long-term yields on their investments. This may even be enough to offset the effects of the reductions in tax relief on buy-to-let mortgages which have seriously hit investors’ pockets since their phased introduction began in 2017.

This is particularly the case because rents are unlikely to take the same hit. Rents do not move in line with house prices, said Gráinne Gilmore, head of research at Zoopla.

After the last financial crash, “the rate of decline in rents was more modest than capital value for homes,” said Ms Gilmore. “When house prices dipped into negative territory in 2011, rents were growing at the strongest pace in four years.”

When the sales market is stalling, people are more likely to hold off on purchases and stay in rentals. “When there is uncertainty, the rental market comes into its own,” added Gary Hall, head of lettings at estate agency Knight Frank. It has forecast that house prices will fall by 3pc over the course of 2020, and that London rents will stay constant. There is an opportunity for investors here, said Angus Stewart of the digital buy-to-let broker Property Master, “as long as they’re sufficiently liquid”.

Those looking to invest will find that they have new competition: short-term landlords are being squeezed by the collapse of the travel industry, and there is already an influx of these properties to the long-term lettings market. Another point of competition could be vendors who are unable to sell their homes if there is a downturn, and so may become accidental landlords.

But Mr Hall is bullish. “Last year we had eight applicants to every rental property listing,” he said. He does not anticipate that rental supply will outstrip demand.

So where will be the best places in the country to invest? Hartlepool in County Durham has the highest rental yield of any local authority in the country, according to Hamptons International, at 11.9pc. The average house price is £113,160. Meanwhile, Pendle in Lancashire has recorded the largest jump in yield growth in the last two years, up 1.6 percentage points to 10.1pc.

When it comes to investing, Mr Hall recommends new stock. “We agreed 27 tenancies last week and the majority were new-build,” he said. Tenants feel more comfortable moving into unoccupied properties, he added. Developers with cash flow problems might also be more open to negotiations on sale prices.

But perhaps the most important factor for investors in the wake of the lockdown will be local employment rates, said Aneisha Beveridge, head of research at Hamptons. These will underwrite rents during the coming months. While the biggest cities will be safer bets, the current winner is the local authority of Eden in Cumbria, which currently has an unemployment rate of 1.6pc. The average house price is £198,480, according to Hamptons.

Stamp Duty Holiday: Could It Stimulate Recovery Of The Housing Market?

By Gary Barker

The spread of the coronavirus (COVID-19) throughout the country has resulted in an almost complete standstill of the housing market as buying and selling property has effectively been put on ice. 

At the least we have the short-term implications of the current lockdown as the restrictions impose strict limitations on property transactions and on estate agents’ capabilities to perform critical functions at a time when there are contractual obligations to meet and chains face delay or upending. 

But in the long-term as we gaze ahead to the rest of the year and beyond, the economic damage looks to be significant, which has led the Royal Institute of Chartered Surveyors (RICS) to suggest that a stamp duty holiday could be a powerful financial relief vehicle to stimulate the economy at the critical moment when the lockdown is lifted and business and life as we know it can resume.

Such a suggestion from the usually conservative RICS follows the latest release of their March 2020 UK Residential Market Survey, which aggregated from its respondents that a net balance of buyer demand had dropped from +17% previously to a staggering -74%. Sales expectations for the next three months are equally bleak, with a net balance of -92% of respondents representing the weakest figure on record since the first RICS survey back in 1998.

Simon Rubinsohn, RICS Chief Economist, said: ‘The feedback from the survey does imply that further government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process supporting businesses and people back into work.’

Hew Edgar, RICS Head of Government Relations, added: ‘These are exceptional circumstances and the government will need to consider all avenues that could feasibly rebuild confidence, bridging the gap between uncertainty and recovery. RICS is not an organisation that would call for a stamp duty holiday on a whim, and indeed our view prior to COVID-19 was that it required a full-scale review.’

This is not the first time that a call for a review of stamp duty has come to the fore. House buyers and property agents have rightly been clamouring for it for years, myself included for various reasons, but particularly due to the heavy impediment it places on many transactions.

But these are unprecedented times and it is readily apparent that supporting the housing market will be essential to restarting the economy when the lockdown is lifted. A stamp duty holiday would go some way to boosting consumer confidence, and failure to act now could well lead to further difficulties in the housing market later this year.

The latest Residential Market Outlook from Knight Frank estimated that total housing sales for 2020 would sit at approximately 734,000–a decline of 38% on 2019’s total figure–and that whilst sales will resurge in 2021, climbing 18% above 2019’s total, it would not be sufficient to offset the drop this year.

Following the release of the forecast, Knight Frank added to the voices calling on the government to think about how to restart the housing market, beginning with stamp duty.

Tom Bill, Knight Frank Head of London Residential Research, said: “The government understands that moving house has enormous knock-on benefits for the wider economy. Anything it can do to kick-start the process once lockdown measures are relaxed will have ramifications far beyond the housing market. A material cut in stamp duty or an extended SDLT holiday should be central to these efforts.”

Savills in late March estimated that if transaction activity were to decline in the range of 20% and 40% by June, and hold as such until September, the total number of transactions for 2020 would be somewhere between 38% and 53% of the total number of transactions the agency forecast for 2020 in November last year. 

Furthermore, the agency projected that the Treasury stands to lose almost £5 billion in stamp duty revenue. On a positive front, the suppressed demand will likely lead to a demand build-up and support house price growth. 

Lucian Cook, Savills Head of Residential Research, said: “Assuming long term damage to the economy is contained, we expect the five year outlook for prices to remain similar to our November 2019 forecasts but with a different distribution of growth year to year.”

Nevertheless, a silver lining to a stamp duty holiday, or even merely a cut to the levy, is that it will further encourage both upsizing and downsizing from parties formerly reluctant due to cost. 

It would also be hugely beneficial to the construction industry–which in February had its worst month since 2009–as builders would be able to increase supply knowing they could add an additional 1-3% to the property price. 

There is no doubt the fear among many that the government will attempt to raise the stamp duty levy to recoup taxes from their coronavirus spending. But this is unlikely, as Camilla Dell, Black Brick Managing Partner, comments: “If you look at past recessions and the speed of the property market recovery, we can predict that the Treasury will most likely not raise stamp duty to make up for this until a year or so down the line, once property prices and transactions have risen again.”

Yes, at a time when the government is spending billions to support the economy, a stamp duty holiday would hurt incoming tax revenue. And with all the pent-up demand I suspect the government may have difficulties implementing it given all the existing spending. But in the long run such receipts can be recovered, and I would argue that firm, stimulative actions now, such as a stamp duty holiday, would pay dividends for the recovery of the housing market and economic growth in the long term.

Calls grow louder for full-scale overhaul of UK property tax

Stamp duty has been fiscal weapon but whole regime deemed too complicated

By James Pickford

Stamp duty has become the UK government’s “fiscal weapon of choice” in the housing market but calls for a full-scale overhaul of the property tax are growing as new surcharges and reliefs spark criticism of an increasingly unwieldy regime.

The charge, paid by buyers on property purchases above £125,000, has been subject to a string of tweaks and accretions in the past six years, as ministers have used it to favour some purchasers, such as first-time buyers, with reliefs and discourage others, such as buy-to-let landlords, with extra rates.

The next group set to find itself paying more is non-UK-resident buyers, after Whitehall officials told the FT this week that a stamp duty surcharge of up to 3 percentage points on overseas purchasers of UK property was expected to be included in the Budget on March 11. Receipts from the additional tax are to be used to tackle rough sleeping.

The measure comes after a 3 per cent surcharge was introduced in 2016 for those buying second and buy-to-let homes, in a move aimed at dousing activity among landlord investors. If the new surcharge on non-residents is confirmed at levels close to 3 per cent, overseas buyers who already own a home could end up paying up to 18 per cent in stamp duty on the portion of the purchase price over £1.5m.

Camilla Dell, managing partner of buying agent Black Brick, said the 2016 surcharge, particularly for those whose house sale falls through leaving them with two properties, had created new administrative difficulties. “The whole property tax regime has just become too complicated. It’s a headache,” she said.

The latest fiscal salvo targeting overseas buyers sent a curious message under a post-Brexit government with bold international ambitions, she added. “I don’t believe foreign buyers are the root cause of problems in the housing market. I think they’re an easy target for the government because they don’t vote.”

In the 2017 Budget, then chancellor Philip Hammond unveiled stamp duty relief for first-time buyers of homes worth less than £500,000. This followed another major change in 2014 — one broadly welcomed by the market — when his predecessor George Osborne did away with the old “slab” system of stamp duty, under which a single rate was charged on the entire value of the property.

It was replaced with a “slice” arrangement where higher rates only apply to the portion of the value above certain thresholds.

Even so, the “bolt-on” approach to stamp duty changes has drawn many detractors, far beyond the estate agents who habitually complain of its chilling effects on sentiment. Transaction taxes are anathema to economists and housing market experts who say they benefit those who stay put and penalise those who move. Neal Hudson, director at housing market research firm Residential Analysts, said: “It’s a stupid tax and not how you would go about taxing property if you were to start from scratch.”

The Institute for Fiscal Studies, a think-tank, has described it as a “dysfunctional” tax and has urged Rishi Sunak, chancellor, to reform council tax to increase charges on more valuable properties. The valuations on which council tax is based have not been updated since 1991.

The Royal Institution of Chartered Surveyors argues that the changes since 2014 have helped first time buyers but deterred existing homeowners from considering a move. “We therefore believe government should establish a review to address all fiscal measures which impact housing supply, the taxation of homeowners and landlords, and encourages innovation and improved infrastructure,” it said.

Even Sajid Javid, who resigned last month as chancellor, has spoken out against the current state of stamp duty, telling the Times last weekend that it was “too high”, “very distortive” and “needs significant change”.

But the political appeal of a root-and-branch overhaul is unclear, particularly when the government is absorbed in managing the coronavirus crisis. Stamp duty has become an increasingly important source of tax revenue in recent years, generating £8.37bn in tax receipts in 2018-19, according to provisional government figures. Much of this is accounted for by sales of homes in London and the south-east. Transactions in these two regions brought in £5.07bn, 61 per cent of the total for England and Northern Ireland.

In light of prime minister Boris Johnson’s repeated commitment to “level up” economic inequalities between regions, the political gains from forcing through radical changes to a tax that is largely paid by wealthier groups in the south of England are questionable.

Politicians last year flirted with the idea of switching stamp duty from a tax paid by the buyer to the seller, but economists argue that such a measure would simply raise prices. Longstanding alternatives in the shape of a land tax or reform of council tax, though backed by economists, remain unpalatable for Conservative MPs mindful of their constituents’ economic interests.

When the Daily Telegraph reported last month that stamp duty cuts were under discussion in government circles, it was notable that any reductions were said to be tied to the introduction of a “mansion tax”, said Lucian Cook, residential research director at estate agent Savills.

“That gives you a fairly strong clue as to the extent to which the government are going to be protective of their tax revenues. They were looking for a means by which they could make any changes revenue neutral.”

Mr Cook concluded that the prospects of a thoroughgoing revamp of Britain’s housing transaction tax are remote. “Stamp duty has become the government’s fiscal weapon of choice as far as housing is concerned. It is probably due an overhaul. The issue is whether anyone’s got the stomach to do it when it continues to be a significant cash generator for the Treasury.”

Is coronavirus having an impact on overseas tenant demand and investment?

By Matthew Lane.

Coronavirus – also known as Covid-19 – has had a dramatic impact on the world since the first reported cases in China at the backend of last year.

Since then, it has spread to almost every part of the world, with the lockdown of major cities, cancellation of sporting events and self-quarantining of people showcasing symptoms or returning from the worst-affected areas.

China has had by far the most cases, but Italy, South Korea and Iran have all struggled badly to contain the virus in recent weeks. In Britain, where 115 cases have so far been confirmed, the government recently released a six-point action plan to combat the spread of coronavirus, including calling the army in to help if civilian authorities are struggling to cope, closing schools and advising elderly people – who are most at risk of the virus – to stay away from large social gatherings.

Across the world, from hotels in Tenerife to cruise ships in Japan, the coronavirus has caused panic and consternation.

While the mortality rate is reassuringly low (around 1%), four in five people with the virus only show mild symptoms and those most at risk are the elderly and those with pre-existing health conditions, fears have been sparked about the possibility of a global pandemic as the number of cases has soared.

Stock markets have been swinging wildly, regional airline Flybe has collapsed, health bosses have raised concerns about the capacity of health systems to cope with a sudden spike in cases, and there has been talk of major global events such as the Olympics and Euro 2020 being postponed or cancelled to stem the virus.

At the same time, there has been an ongoing battle against disinformation – with myths and falsehoods spreading via social media quicker than public updates can be provided – as world leaders try and disseminate accurate information to their citizens ahead of the half-truths and fake news.

The health crisis has had a noticeable impact on all parts of life, with airlines grounding flights, Airbnb’s profits taking a hit, popular tourist attractions virtually empty and people cancelling holidays and business trips.

It’s affected the property world, too, with March’s flagship MIPIM conference being pushed back to June after a number of high-profile attendees pulled out.

But what impact is it having on tenant demand in the UK from China, the country worst affected by the virus with the bulk of cases and deaths found there?

Megan Wang, Asia Desk Lead at Build to Rent referrals platform Houzen, said: “I deal mostly with Chinese student tenants and applicants, as well as Chinese investors in UK properties, on a daily basis. In the last 2-3 weeks, any kind of processes related to bringing new tenants to the UK are being severely delayed.”

She said people in China are not willing to travel internationally, and many of them have delayed their arrival to the UK to September/October-time, instead of the common summer season.

“There’s still a high demand for property viewings, however we switched in 70% of cases to virtual viewings, by video call and WeChat. Most of the applicants don’t have a problem viewing a property this way and are comfortable making their decision just based on that. In terms of how many people might actually arrive in the UK later in the year, I see a potential for a spike in the number of international students moving to the UK.”

She added: “Some universities lowered their required grades for Chinese applicants, so if the situation with coronavirus gets better soon, we might see an even higher number of incoming students later on. In terms of property sales – it doesn’t look like the usual market is affected yet. However, I did hear about some buyers looking for properties to buy outside of mainland China as a ‘safety home’ in case the situation gets more serious. This is just a very rare comment for now, though.”

Terry Mason, group operations director at rent guarantor service Housing Hand, said the coronavirus remains a worry to all in the lettings market. “At present we have seen very little effect – however, it has the potential to be devastating,” he explained.  

“If the virus spreads and becomes a pandemic around the world, then people coming to the UK needing to rent property will drop dramatically. On the other hand, those from abroad who are already here may not be able to (or wish to) return home – but will they have the means to pay their rent?”

He added: “In the short-term, I think it’s business as usual, with everyone watching the economy for any change in their business income, essential for paying wages. If the virus spreads, we could see businesses unable to pay staff and redundancies leading to many tenants being unable to pay their rent.”

Mason said that, if companies are not hiring or students decide not to travel to the UK for university courses, ‘we would have a huge oversupply of available lets and a whole year of letting upset’.

“I think we are in the balance now; the outcome depends on containment,” Mason concluded. “Currently, the numbers here are extremely low, as is the risk of catching the virus, let alone dying from it, but looking at the worst-case scenario should help people take the necessary steps to help containment.” 

What about overseas investment?

Camilla Dell, managing partner at buying agents Black Brick, said the impact on Prime Central London – where many overseas investors, especially from South East Asia, purchase property – had so far been minimal. 

“Although a fair proportion of PCL homes are bought by HNW international buyers, we haven’t yet had many clients talking to us about the coronavirus,” she said.

“However, with some employers asking staff to self-isolate and work from home, we can predict that home offices will become more popular.”

She added: “We’ve seen a variety of buyers interested in properties with large studies, or serviced executive suites within luxury developments; and this is part of an ongoing trend for people to work more flexibly, aided by increasingly agile technology within the home.”

Hannah Aykroyd, managing director of boutique property advisory firm Aykroyd & Co, said stock markets have dropped (and since slightly recovered) in response to news about the coronavirus, and ‘in general, investors around the world are slightly holding their breath to see how things unfold’.

“At Aykroyd & Co, we have had two foreign buyers ask us to put their searches on hold temporarily due to travel restrictions or concerns about travel restrictions,” she continued. “However, in one case, we solved the problem with a creative approach and carried out a remote purchase.”

“Equally, we have two separate clients in town from Hong Kong who have been here since the news first broke and are using the time to focus on property investment in London. As a result, we are advising on building out a property investment portfolio which we would both acquire and manage for the long-term.”

Aykroyd said it was important to note that ‘neither we nor our clients are worried about the long-term resilience of the London property market, particularly at the top end’.

She claimed PCL residential property has been the best-performing asset class in the world over the past 25 years – through all kinds of crises.

“We are currently in a buying opportunity and this will not change with the outbreak of coronavirus. Savvy investors are well-aware of this.” 

 

Why London’s imminent property boom is not all that it seems

Why London’s imminent property boom is not all that it seems 

By Melissa Lawford

Typically, after the Christmas break, the housing market in London is “an absolute desert,” says Simon Barry of Harrods Estates. This year is a different story, he says. In the wake of the Tory election victory, estate agents seem instead to find themselves in an oasis.

Even the Russian buyers are coming back.

Sales of luxury homes have spiked in the capital, a market which has long been in the doldrums. In the month after the election, sales of £2 million-plus homes have jumped by 69 per cent year-on-year, according to analysis firm LonRes.

Everyone is waiting for the surge to translate into price rises. “It is happening, we can feel it happening on the ground,” says Caspar Harvard-Walls, a buying agent at Black Brick. “Straight away, sellers who would have maybe taken 5 or 10 per cent off their asking price now won’t budge.”

New listings are now being set a few percentage points higher than they would have been this time last year, he adds, so “we have to be a lot more aggressive in negotiation.” Soon, he says, “people will begin to think they have missed the bottom of the market.”

So is the London property market about to go bonkers?

The headline figures of the latest HMRC stamp duty receipt data are utterly boring. Overall, in the last three months of 2019, total sales volumes in the UK moved by less than half a per cent. 

But look closer: from October to December, the number of £1 million-plus sales jumped by 12.8 per cent on the same period in 2018 to a total of 5,300. “That is the highest number of £1 million-plus residential transactions for the last quarter of a year in at least the last decade,” says Lucian Cook, research director at Savills. 

The implications for the luxury sector of the London market are huge. The largest concentration of these properties is in London and the South East, says Cook, and the numbers likely reflect “the banked sales after the election”.

Rightmove reported that January was its busiest month ever, and said that agreed sales in London jumped by 26.4 per cent on last year’s total.

While the biggest jump is in the number of super-expensive prime London homes sold, the boost is not just in the glitzy heartlands. LonRes found that in January, sales of homes in “prime fringe” areas, such as Clapham and Southwark, were up by 28.4 per cent year-on-year.

But there is a major caveat: the number of homes sold might be up, but prices are still down. Prime London sales prices were 5.5 per cent lower in January than the year before, according to LonRes. This is a time to buy a bargain, and while some vendors may well be taking a punt at hiking their prices, but they are certainly not the ones who are currently making sales.

And if they do raise their asking prices, this will likely start to stall the market again. “A sustained pick-up in activity depends on sellers keeping price expectations in check,” says Cook.

Across London, “affordability will be a limit on price growth,” says Neal Hudson of research firm Residential Analysts. Demand might be up in the capital, but that does not change the purchasing power of buyers, particularly first-timers, who are limited by mortgage regulations and prices that are still sky-high compared to wages.

The election result was not necessarily the turning point that it has been hailed as. The HMRC figures suggest that the momentum currently taking over the market started over the summer, and continued through the rest of the year. Typically sales fall off after September.

Calling the recent rise in London sales a ‘bounce’ is a misnomer, says Barry. “The momentum has been building for months.” That shows that, certainly in the wider London market, the right pricing of a property matters more than political clarity.

Sellers should also note that the current pick-up in activity is nowhere near as big as it sounds. “Prime central London is recovering off a low base,” says Hudson. Both 2018 and 2017 had weak ends of the year. The numbers “in part simply reflect things being not as bad as they were,” he adds.

There are also some more hurdles on London’s horizon. Brexit trade negotiations will bring back the uncertainty the the election result temporarily pushed away, says Cook. 

There is also the government’s pledged introduction of a 3 per cent surcharge on overseas buyers. This is likely to “put buyers off at the lower end,” says Hudson. It will be the foreign investors buying one- and two-bedroom buy-to-let flats who will see their yields significantly hit by the extra tax. 

As for the multi-millionaires, they will simply refuse to pay the extra, says Barry. When stamp duty goes up, “it’s been vendors who pay most of it [by lowering prices],” says Barry. “We have seen the market fall from a great height since the 2014 stamp duty changes.” 

London is also part of a wider story of global prime real estate. “There are signs that prime markets across the world are struggling,” says Hudson. He notes the downturns in Vancouver and New York in particular. The rule of the old guard could simply have come to an end.

“We could see a stronger market for a number of months,” says Hudson. As there is a shortage of homes on the market and a low turnover of property, it doesn’t take much for transaction growth to filter into price rises. “But that trend for rampant growth that we saw from 2010 to 2014 is unlikely to return.”

Home sales slide in Battersea Nine Elms

‘Disjointed feel’ of the huge regeneration project blamed for putting off buyers

Less than 24 hours after the Conservative party victory in December’s general election, interest in south London’s prime property market was already picking up. “I had a businessman from the United Arab Emirates, who had been sitting on the fence for months, call me up and say: ‘Let’s move,’” says Marc von Grundherr, a director of estate agency Benham & Reeves. Later that day, they were finalising a deal worth £1.7m for a three-bedroom apartment in Battersea Power Station, the much-loved industrial building being converted into high-end homes on the south bank of the Thames. Developers in the wider Nine Elms area — the vast regeneration project surrounding the power station — will be hoping post-election optimism will ripple outwards. Parts of the area, which will eventually see the completion of 20,000 new homes, as well as landmark new office projects, still resemble a building site. And home sales have slipped recently.

In 2017, the year several of the residential projects were completed, 1,219 sales in Nine Elms were recorded on the Land Registry — though many would have taken place beforehand, while construction was still ongoing. In 2018, 479 homes were sold in the area; in the first nine months of last year, just 284 sales were recorded. Some investors bought homes in Nine Elms before they were completed, hoping to flip them for a profit on the resale market. Instead, an increasing number have had to slash prices. According to Zoopla, a few Nine Elms homes have had their prices cut by more than 25 per cent since being relisted for sale.

“We’ve had Middle Eastern conglomerates call us up and say: ‘Look, we bought 45 properties in a development that’s right next to the power station, right next to Chelsea: why aren’t they selling?’” says Mayow Short, head of Savills’ Battersea office. (Anyone who bought in Nine Elms thinking their new home was “right next to Chelsea” might be disappointed — Sloane Square is on the other side of the river.) “Plenty of [investors] were buying from hotel suites in far-flung parts of south-east Asia, without having scrutinised the plans, the layout or the market outlook,” says Roarie Scarisbrick, a buying agent at Property Vision.

Some might have thought they were getting something by the river but ended up in “an armpit of a corner” with a view of the railway and eight lanes of traffic, he adds. “A lot of people got caught up in a frenzy,” says Camilla Dell, a buying agent at Black Brick.

While the redevelopment of the power station has been carried through according to a well-worked master plan, says Scarisbrick, he thinks the rest of Nine Elms has a “disjointed feel” and that it is the result of multiple developers all pulling in different directions. Still, many think the long-term prospects for Nine Elms look much brighter. Aside from it being home to the new US embassy — which opened in Nine Elms in 2018 — a new Apple HQ is due to open there next year, as are two new Tube stops on an extension of the Northern Line.

Next to the US embassy, a new development by Ballymore called Embassy Gardens is gearing up for the launch of its “Sky Pool” this summer. The transparent, 25-metre pool will be suspended 35m off the ground between two blocks of flats. Ballymore declined to reveal the price of the project when contacted by the Financial Times.

Some Battersea residents think the Nine Elms site feels cut off from their neighbourhood. “I get the feeling that the people moving to the riverfront are almost turning their backs on the rest of Battersea,” says Jeanne Rathbone, who has lived in the area since 1962 and affectionately refers to the power station — which is one of the world’s largest brick buildings — as “the Taj Mahal of south London”.

New-builds nearly always carry a premium over existing stock, and homes in Nine Elms are no exception. The average sale price of an apartment there is 48 per cent higher than the average in Battersea, according to LonRes using Land Registry data.

In any case, families often opt for the Victorian terraces near Battersea Park. On Octavia Street, Savills is selling a five-bedroom house for £1.995m. A two-bedroom flat on Prince of Wales Drive is on sale for £750,000, though John D Wood & Co.

“People are quick to bash Nine Elms and that part of Battersea,” says Dell, “but that’s oversimplifying things.” In five or so years’ time, the clatter of power tools will hopefully no longer fill the air and the wind-tunnel streets around the US embassy will have been transformed into the thriving community spaces that developers have promised. Because of its potential, Battersea is an area “worth considering”, she says.