Wealthy buyers in London are increasingly shunning luxury homes for cut-price dilapidated properties in the hopes of making a tidy profit.
Buying agency Black Brick, which identified the trend, said buyers are looking to find the best possible deal on their London home, enabling them to achieve better value for money and the potential of long-term capital growth.
The agency said wealthy individuals are currently reluctant to pay £4,000 to £5,000 per sq ft on a new luxurious property in prime central London. Instead, they are purchasing dilapidated properties – apartments and houses – which can be renovated, thereby minimising risk and increasing their value.
“We are seeing an increase in properties coming onto the market which are being sold because a family member has passed away or that have been in a family for 20-30 years and handed down to the next generation,” said Camilla Dell, managing partner at Black Brick.
“Although it is a buyers’ market at present, these properties have still gone up in value considerably since they were purchased many years ago and therefore sellers are willing to take a deal or reduced rate on their home.”
Black Brick recently completed a deal for a British client who purchased a property in Kensington for their growing family, which is in need of renovation.
The house was sold with planning permission to be almost doubled in size through a basement extension, developing the side and the rear of the ground floor level as well as a loft conversion.
Black Brick secured a 19% discount of £1.1 million for the property, with contracts exchanged at £4.85 million.
“There are some excellent deals to be had at the moment, particularly from vendors who are highly motivated to sell,” said Dell. “That’s why as buying agents, we always find out who the seller is, and what their reason for selling is. This enables us to negotiate far better discounts for our clients.”
She added that the agency is also seeing some large discounts being applied to new build properties which are due to complete in the next two or three months and the seller wants to flip it before completion.
“We are advising buyers that if the right deal can be sourced, now is a great time to be buying, but realistically given the costs of acquisition, investors need to be looking at holding onto to the property for a minimum of five to 10 years before they see significant growth in its capital value,” Dell said.
DealMakerz thinks it is a wise move to buy dilapidated properties in need of upgrading, as it’s possible to find some great deals. Buyers increasingly want to put their own stamp on their home, and renovating is one of the best ways of doing this.
Whether you are buying or selling, dealing with estate agents can be a trying experience — and, for sellers, an expensive one. Yet many agents are scrambling for business as the number of transactions falls: sales were 3.5% down last year, according to the latest figures from the Land Registry, and are predicted to drop again in 2018. So is now the time to negotiate down the fee?
Before you bullishly enter the fray, there are a few inconvenient truths worth noting. First, the lowest fee isn’t necessarily the top priority for sellers: fewer than 10% of homes are marketed via low-cost online agencies. Second, high-street agents have an incentive to charge a competitive commission rate — they earn their money by winning instructions and selling homes, so setting prices too high is counterproductive. Finally (and you may want to sit down for this), British estate agents offer good value, with an average commission rate of 1%-1.5%, compared with 4% in Canada, 3%-6% in Spain and 5% in the US.
Yet even a low percentage can lead to an eye-watering bill, simply because property prices in Britain are so high. The average home costs £220,962, according to the Halifax, despite a 3.1% drop in April. So, at 1%, the agent’s commission is more than £2,200, and at 1.5% it’s £3,314 — both excluding VAT, of course. If you’re selling a £1m home, which isn’t uncommon, it swells to as much as £15,000. A few high-end agents may ask fees of up to 2.5%, but these are rare.
How do I start negotiating?
Get at least three agents to provide valuations and their marketing strategies for your home. Check the small print in their contracts: if the charges are blank, they’re up for negotiation. Ask them to state the commission, but don’t commit before you’ve compared figures and strategies from other agents.
“While we occasionally see 0.75% commission, it’s actually more like 1.2% at the moment,” says Paula Higgins, co-founder of the consumer group Homeowners’ Alliance. Be sensible when trying to strike a bargain — remember, an agent needs motivation to sell, so an unrealistically low commission may mean your property won’t be their top priority.
What is included in the fee?
If you want real value for money, not just the lowest fee, check all aspects of an agent’s service, as well as their track record selling your type of property in your area. Most include preparing details and photos, placing them on portals such as Rightmove and Zoopla, and providing “For sale” boards within their standard fee.
What else should I watch for?
Find out if you will be charged extra for a premium listing on Rightmove (one that pushes your property towards the top of buyers’ searches). And ask whether your fee includes the cost of an open-house event and advertising in the local press — or, if you are flogging an estate, Country Life magazine.
Will I be free to switch agent if I’m unhappy?
Most sole agents have “lock-in” periods lasting 4-12 weeks — consumer groups say it’s unwise to accept longer terms, as it means you cannot easily switch agent if you’re unhappy.
Would it help to use an agent’s recommended services?
Agents typically get referral fees after telling clients about their partner mortgage or conveyancing firms, but compare rates and reviews before making a decision, and remember that you’re under no obligation to sign up. Declining to use these companies must not — by law — be an excuse for the agent to disadvantage your property sale or the purchase of your next home.
What if I instruct more than one agent?
“Rather than pay a multiple fee of 3% shared between them, no matter who finds the buyer, we adopt a winner-takes-all approach,” says Camilla Dell, managing partner of Black Brick buying agency and an arch negotiator with selling agents. She suggests saying up front that you’ll pay 2% or 2.5% to the agent who comes up trumps with a purchaser — and nothing to the ones who fail.
I’d like to incentivise my agent — am I allowed to?
You certainly are. So, if the agent would usually charge, say, 1.25% commission to sell your home with an asking price of £500,000, why not strike a deal saying you’ll pay 1% if they get a sale for less than £475,000, but 1.5% if they find a purchaser who’ll offer £525,000 or more? You can have these terms written into your contract.
How about using an online agency?
The savings can be large, but so can the losses. Most online firms charge about £1,000 if you pay upfront; in many cases, however, that’s lost if the agency fails to shift your home. Analysis by the investment consultancy Jefferies suggests some online agencies sell only 50% of the properties they list, and the unsuccessful vendors usually have to employ a traditional estate agent who charges commission — so they end up paying twice to achieve a sale.
The property, a detached villa in Holland Park, went on the market at around £13 million. That valued the unmodernised property at around £2,500/square foot – a respectable price for a house in a desirable area, backing onto attractive communal gardens.
A short bidding war and a round of sealed bids later, it sold for above £18 million, or some £3,500/square foot – if not a record for the area, then not far off.
This didn’t take place at the top of the market in 2014, but last month – in a prime property market down, on average, 15% from its peak, and where estate agents and property analysts are complaining of weak sentiment and low transaction volumes.
“It’s an incredibly polarised market at the moment,”says Caspar Harvard-Walls, a Partner atBlack Brick. “For really high quality, best in class properties, there is serious competition out there, partly because there are so few of them on the market. As with the Holland Park property, we’re seeing them change hands at record prices.
“Lower quality properties, on the other hand, aren’t moving and, in fact, many aren’t coming to the market at all. If vendors don’t need to sell, they’re renting them out instead.”
This poses particular challenges for buyers, Harvard-Walls continues. “It is very hard to work out where value is. Getting a sense of when a property is going to go off like a rocket is extremely difficult in this market. Pricing is all over the place.”
And those properties that do see intense competition pose their own set of challenges for buyers. “It’s very important that, when buyers get into a competitive bidding situation, they act rationally and calmly. It’s very easy to get massively carried away, and overpay for a property.
“What’s needed in the current market is deep knowledge, a laser focus on value, and a cool head,” he adds.
With experts pointing towards a market about to bottom out, those prepared to hold onto their investments could benefit
By Liz Lucking
London’s luxury market, long home to aristocrats, wealthy Middle Easterners and Russian oligarchs, has been more aptly known lately as the home of plummeting real estate prices.
A series of tax bumps on top-tier properties, penalties for second-home buyers and Brexit-related uncertainty, have made the city’s real estate outlook gloomy since 2014.
But now, as prices appear to have mostly plateaued, according to experts, central London’s prime market looks poised to bottom out, appealing to buyers once more. And as long as they’re prepared to play the long game and hold on to their investments, a stake in London luxury can again be a good bet, experts say.
“For the central London market, it seems we’ve seen the falls we’re going to,” said Marcus Dixon, head of research at LonRes, a real estate data firm. “The feeling that I get is that we’re bumping along the bottom.”
The central London market “is always going to be where people want to invest, but people have to look at it as a much longer investment,” Mr. Dixon said. “People aren’t going to cover their costs in three years anymore.”
Prices for prime real estate in central London are down 16.7% compared to September 2014, according to April’s first quarter report from U.K. real estate firm Savills. The rest of the U.K.’s prime market has performed far better in the same time frame: Prime properties in the urban areas of the wider South of England rose in value 10%; prime properties in the urban areas of the Midlands and North of England saw increases of 8.9%; and prices of prime urban Scottish properties rose 10.2%, according to Savills.
More recently, first quarter 2018 prices for prime central London properties were down 1.1% compared to the previous quarter, the report said. Quarterly declines have been hovering around the -1% mark since early 2017, after seeing larger falls in the latter half of 2016, when the third and fourth quarters logged price declines of 2.64% and 2.09% respectively.
The recent easing of quarterly declines is a sign prices are approaching the bottom of the trough, according to Lawrence Bowles, associate director of residential research at Savills.
But while price growth is not likely on the immediate horizon, Mr. Bowles said, Savills is expecting the property market to begin recovering in 2019, with the real bounce back coming in 2020.
Savills predicts house prices will rise 8% in central London during 2020; another 5.5% in 2021; and another 3.5% in 2022. Over the next five years, the real estate company is anticipating compound growth of 20.3%, further underlining that those buying will need to think long term about any real financial gains.
This isn’t unusual for London, a city that is used to seeing large peaks and troughs. Between the first quarter of 2008 and the first quarter of 2009—in the midst of the financial crisis—values in prime central London fell more than 20%. In the five years between the first quarter of 2009 and the same period in 2014, prices rose almost 80%, according to Savills data.
This time around though, such a rapid bounce back seems unlikely, according to Mr. Dixon, who predicts a slower return to growth, “which isn’t a bad thing,” he said. “You want a sustainable market.”
But that doesn’t rule out more drops being on the horizon, either.
“I would be cautious in saying we’ve reached the bottom,” said Camilla Dell, managing partner and founder of Black Brick Property Solutions, a London-based property consultant. “Do I see it dropping another 20%? No, but I could see another 1%, 2% or 5%.”
What went wrong
London’s shaky market can be blamed on a number of factors, beginning in 2014 when the government made changes to stamp duty, the U.K.’s tax on homebuyers. Though the 2014 changes reduced stamp duty for many, it was raised for those buying houses worth more than roughly £1 million (US$1.35 million), and the London market—laden with pricey homes—slowed as it became more expensive to buy.
Then in the last couple of years, an additional 3% surcharge on stamp duty was added to purchases of second, or additional, homes. And a recently passed tax incentive for first-time buyers only applies to properties priced at £500,000 (US$675,250) or below.
The upcoming removal of the U.K. from the European Union—the result of 2016’s referendum—only compounded the problem. The uncertainty brought a level of hesitancy to the housing market that is still to be resolved.
The Right Time to Buy?
“The fact that prices have dropped and don’t appear to be dropping much more will encourage more investors,” Mr. Dixon said.
And now, with an increasing number of sellers more realistic about what their homes are worth, there are some real opportunities in central London, he added.
More than half of London’s prime properties are changing hands for below the asking price, according to April’s prime property index from private bank and wealth manager Coutts. Buyers can now expect to have an average of 12.1% chopped from the asking price of the top-tier properties they’re purchasing.
For those willing to hold onto their investments, “you could argue that it might not get better than this and if you wait on the sidelines you might miss the opportunity,” Ms. Dell said.
“All of the forecasts over the next five years are positive,” Ms. Dell said. “We’re in the window where people buying now will get a good deal.”
Timing is also looking good for dollar-based investors, who can take advantage of both London’s lower prices and the dollar’s currently high value against the pound, according to Ms. Dell. Back in June 2014, $1 was equivalent to around £0.58, today $1 nets roughly £0.74.
A Safe Bet
London still has plenty of draws beyond its property price growth. Its strong educational system and top-notch universities, as well as its relative political stability, continue to be drivers of interest and purchases by international buyers.
But needs-driven buyers—those looking for primary homes rather than vacation homes—are really fueling the market now, according to Tom Bill, residential research associate at property consultancy Knight Frank.
“Pent-up demand has formed over the last couple of years, and there comes a point that people have to move,” Mr. Bill said. “So there’s an element of that that’s driving the market and helping prices rebase.”
“London is still an attractive place to be, Brexit doesn’t appear to be materially changing that,” he added.
A Full Recovery?
Though statistics and experts point to the market bottoming out, that’s not to say the market has fully recovered.
“It’s too soon to call it a recovery,” Ms. Dell said, adding that the market is still quite fragile.
And with Britain’s official departure date from E.U. scheduled for March 29, 2019, “it’s unlikely we’re going to see any significant growth before Brexit negotiations become clear,” Mr. Dixon said. “That’s what’s holding back the market most.”
No other city in the world has quite so many — and they never cease to astonish tourists, particularly Americans, who go all wobbly at the knees if they ever get to visit them.
English Heritage says there are 600 garden squares in the capital, mostly in Kensington & Chelsea and Westminster, though there are others in less affluent areas such as Lambeth and Hackney.
Green space: Sussex Square is part of the Kemp Town Enclosures in Brighton
But beautiful communal gardens exist all around the country — and they come into their own at this time of year.
Buying agency Black Brick has calculated that premiums for homes with access to such spaces range from 20 per cent to more than 40 per cent.
Many of the best-known gardens (and not only those in London) are surrounded by period buildings, typically Georgian and Victorian properties built when relatively low-density housing and leafy open spaces were part and parcel of urban living.
Buildings were often constructed in crescents, terraces and squares, but inevitably not every home could have a southerly aspect — so a communal area gave residents a chance to enjoy the sun.
In Bristol, for example, Georgian terraces at Clifton Village have communal gardens located in between them and it’s the same in Edinburgh, where several garden squares and communal gardens are privately run, and securely gated.
Keys can be bought by residents for about £100 a year.
In Brighton, the Kemp Town Enclosures provide six acres of landscaped gardens with an extra perk — a private tunnel under the main road leading straight on to the beach.
Sussex Square forms part of the Enclosures, where a three-bedroom flat is listed at £595,000 with Winkworth.
‘Most of the grand houses around it are now converted into apartments and they sell for at least 15 per cent more than other similar properties nearby,’ according to Alexandra Hearn, from estate agency Mishon Mackay.
It’s a similar story in Cambridge, though many of its green spaces are owned by the university, with passes available for local residents to buy.
Terrace life: You have a private terrace and courtyard garden as well as access to communal gardens with this four-bedroom flat in Clifton Village
‘The city’s densely packed in the centre, so developments with a private communal green space are rare,’ says Oliver Rivers, in the local branch of agency Strutt & Parker.
‘Buyers see them as a huge benefit.’
In Bath, there are several communal gardens like the one in St James’s Square, close to the famous Royal Crescent.
‘While five-storey Georgian townhouses have their own city gardens, there’s no doubt the central garden square is a particular draw to buyers,’ says David Mackenzie, of Carter Jonas.
Then there are London’s communal gardens with addresses such as Eaton Square, Chester Square, Cadogan Square and Belgrave Square — all among the most sought after and expensive addresses in the capital.
One reason why so many communal gardens still exist here, despite the pressure to build, is that more than 400 are protected in the London Squares Preservation Act of 1931, which prevented the capital going the same way as other town and city centres when planners championed tower blocks in the Sixties.
Coastal abode: This five-bedroom Regency house comes with three self-contained apartments. All have sea views and access to private gardens
Now some modern house builders are trying to create 21st-century versions.
The results are mixed. Some high-end developments, such as Wycombe Square in London’s Holland Park and the new Chelsea Barracks scheme, have spacious communal gardens.
Other new developments are less tempting — for example, Debbie Foenander from the Mullucks Wells estate agency in the Home Counties knows of one commuter town where modern flats directly open on to communal gardens.
‘There would be nothing to stop another owner putting their deckchair immediately outside your door,’ she cautions.
Unsurprisingly, modern homes with communal gardens tend not to have the kudos of traditional homes.
‘New developments can never really replace the prestigious garden squares, which will always command a premium for their exclusivity,’ says Camilla Dell, of Black Brick.
However, even period properties with communal gardens can have their downsides.
First, the service charge to maintain the gardens is typically in the control of the freeholder or the firm responsible for the open space, so could, in theory, rise considerably.
Second, there can be strict rules over usage — many do not allow barbecues, for example, or have to be closed relatively early even on summer evenings.
A few forbid alcohol, while most are overlooked.
Some are let out for private parties, too, which can be irritating.
Such quibbles have done nothing to deter our enthusiasm.
Even in today’s sticky housing market, local agents insist sales of homes with communal gardens are strong.
Apartments housed in developments dubbed ‘posh ghost towers’ struggle to sell
The estate agents LCP said developers were scaling back their ambitions after realising there was ‘a huge oversupply of over-commoditised new-build boxes’ in London. Photograph: Alamy Stock Photo
Construction of luxury flats in central London dropped by a quarter last year, with apartments housed in developments dubbed “posh ghost towers” struggling to sell.
New-build starts in the capital in 2017 dropped by 25.4% compared with 2016, according to a report by London Residential Research and the luxury estate agents London Central Portfolio (LCP).
The number of new-build starts fell in seven of the 11 inner London boroughs featured in the study, with a 62% decline in Southwark (where there has been significant development around Elephant and Castle) and 42% falls in Wandsworth (which includes the developments along the Thames in Battersea and Nine Elms) and Westminster. In total, new-build starts in the inner boroughs fell by 3,810 units.
Naomi Heaton, the chief executive of LCP, said developers were scaling back their ambitions after realising there was “a huge oversupply of over-commoditised new-build boxes” in London.
“An awful lot of what was built was generic and overpriced and they struggled to sell it,” she said. “Historically, a lot of properties would have been bought by overseas investors in the assumption that they could flip it and sell it on at a huge profit, but now there is huge nervousness following increases in stamp duty and the the impact of Brexit.”
In January the Guardian revealed that more than half of the 1,900 ultra-luxury £1m-plus apartments built in London last year failed to sell. One property buying agent in the luxury sector, Henry Pryor, warned at the time that the city would be left with a legacy of “part-built posh ghost towers”.
Builders have delayed work on an additional 13,800 units they had planned to build, according to the research.
Developers have slashed prices to shift stock: the average cost of luxury London properties has fallen by 14% from its 2014 peak. The number of £1m-plus sales has fallen by 24%, according to the bank Coutts.
It said 53% of prime property on the market was being sold below asking price, compared with 42% last year. Prime-property buyers can now expect to achieve an average of 12.1% off the asking price, which works out at £300,000 off a 2,000 sq ft property.
The number of 20-storey or higher blocks under construction in London has fallen by 32%, from 46 in 2016 to 32 in 2017. The total number of flats in new tower blocks has fallen from 8,200 to 5,500.
The estate agent Strutt & Parker has said prime-property prices in central London could fall 5% this year. Guy Robinson, the head of residential at the agency, said: “In a climate of fast property price growth and low stamp duty, the cost of moving previously seemed relatively inconsequential, but now, with higher stamp duty and lower house price growth, moving costs are extremely material in the whole event, and has had an impact.
“People have come to terms with Brexit, and sellers should be preparing to act on plans put back from last year. As we move into summer, we are hopeful that a lift in confidence will see an increase in supply to meet current buyer demand.”
Camilla Dell, a managing partner at the property buying agent Black Brick, said: “We are seeing continued interest from Middle Eastern buyers, with Saudi clients particularly active. Brexit notwithstanding, the UK offers political, economic and legal stability.
“Saudi buyers tend to value confidentiality and favour trophy properties. In the current market, few of those are marketed publicly. Around a third of the properties we bought for clients last year were sold off-market.”
London has become a popular place for the wealth to divorceCredit: Peter MacDiarmid
By Rhiannon Curry
Estate agency Black Brick has launched a specialist service to cater for divorcing couples as an increasing number of the super-rich seek to untie the knot in London.
It also advises clients on what it costs to run a home in a particular area so they can use the information as part of a claim against their spouse, and finds short-term accommodation for those going through the divorce process.
London has become increasingly popular location for those looking to instigate divorce proceedings because of the more generous terms that can be negotiated for the financially weaker spouse. Unlike in other countries, property owned before the marriage and wealth that has been inherited can be included in a potential settlement, resulting in higher payouts.
Black Brick said such is the demand from wealthy individuals looking to value properties for the purposes of a divorce that the new division is needed to provide information to courts. In 2017, around 10pc of the transactions conducted by Black Brick were for people getting divorced.
The proliferation of high-value divorces has spawned its own industry elsewhere: personal security company Umbra International has also reported a marked rise in the number of individuals, particularly women, seeking protection from bodyguards or cyber security experts before, during and after divorces.
Meanwhile, Swiss private bank Julius Baer has also begun offering a service that allows clients can borrow money in order to fund a divorce process if their cash is tied up in jointly-owned assets such as property.
She said she needed £39.3m to purchase a home in England as a result of the marriage breakdown, as well as £27.9m to buy a property abroad. She claimed she needed £5.4m a year to live on.
When the Norman Foster-designed HSBC building in Hong Kong was completed in December 1985, it was the most expensive building in the world ever to have been constructed.
While designed – much like earlier colonial-era structures on the island – with a trained feng shui geomancer, it did not anticipate the arrival, just a few years later, of the Bank of China building, with its knife-like edges, next door.
Shortly after it was built, the governor of Hong Kong died and there was a downturn in the city’s economy; it didn’t take long for fingers to be pointed at the new building. Feng shui masters were consulted and two cannon-shaped structures were mounted on the roof of HSBC’s building to dispel incoming negative energy from its neighbour.
Such is the power of the ancient practice of aligning buildings and objects, in order to attract good luck and ward off misfortune, that entire apartment buildings in Hong Kong have been built with holes through the middle. This is to allow dragons – traditional symbols of wealth and prosperity – to reach the harbour. Blocking the dragons’ path is thought to bring bad luck to residents.
While this may be a step too far for London developers, many are all too aware of its importance, and factor in a feng shui consultant if they wish to attract the lucrative Chinese market.
That means changing addresses if they feature the number four, which is considered inauspicious in China because it sounds similar to the words for “death”. Property developer Ballymore also commissioned a feng shui audit report for its Embassy Gardens project at Nine Elms in south London. The number eight is lucky, and Chinese buyers will often make offers on apartments with eight in the number or floor, explains Merlin Dormer, of buying agent Heaton & Partners.
“We also receive offers with eights in them from Chinese buyers,” adds Bertie Hare, from Strutt & Parker’s Knightsbridge office. “On the seller side, someone might decline a higher offer like £900,000 if a lower offer includes more lucky numbers, like £888,888.”
Mayfair and Marylebone-based agent Martin Kay, of Kay & Co, says that Chinese clients looking at high-end property will sometimes bring their feng shui consultant with them on viewings. “It’s nerve-racking as it can end a deal immediately if something’s not right, particularly if one of the couple is more superstitious than the other.”
In one example, an enterprising (and not superstitious) wife managed to persuade her husband to buy a flat on the edge of Regent’s Park by convincing him it was on the fifth floor rather than the fourth. “She just counted from the ground floor up instead,” says Kay.
These days in London, feng shui requirements compete with another Eastern system of beliefs, vastu shastra, which is important to some Indian buyers, says Camilla Dell, of Black Brick, a buying agent. “One of the main requirements of vastu is that the front door should face south, which, in theory, sounds relatively simple but in London it can rule out whole parts of the city where the streets simply face the wrong way.”
Earlier this year, developer One Point Six took the unusual step of designing a luxury apartment on Pont Street in Knightsbridge according to vastu shastra before putting it on the market. While this remains a niche approach, agents have to find other solutions to remedy such concerns.
For one of Dell’s clients buying in a new development, this involved purchasing two flats opposite each other as well as the corridor space in between. By linking them together they were able to create a south-facing front door and the deal went ahead.
“With off-plan developments, we can try and find a way around these problems. But with some Indian clients, it’s likely that their vastu consultant will be the first to see the floor plans,” says Dell. “If something’s not right, the property is simply ruled out before anyone has been to take a look.”
Astrological concerns have also been known to delay a sale. “I was bidding on a property for a client, and we were all ready to exchange when she called a temporary halt because the planet Mercury was moving in the wrong direction,” says Guy Meacock, of Prime Purchase.
“While the planet was in retrograde she was of the belief that she shouldn’t sign the contract. I had to tell the selling agent we’d need to wait until it started moving in the right direction, which took several weeks.”
As international buyers increasingly enter the top end of the country house market, concerns regarding feng shui are having an impact here, too, says Rupert Sweeting, head of country house sales for Knight Frank.
“Many Chinese buyers hate having a well in a house. So if a rural property has its own well in the grounds, they often won’t progress to offer stage,” he explains.
Buyers who believe in the paranormal can also affect how successful a viewing is, adds Sweeting. If there’s any hint of a problem, his advice to vendors is to get the house cleared of any such ghouls by “employing a ‘ghostbuster’ or a priest to exorcise the house”.
Salisbury-based solicitor Marcus Thorpe, of Trethowans, says it’s important to be honest about any activity in the house. “While questions about the paranormal don’t form part of the standard buyer’s questionnaire, and perhaps it’s unique to the country house sector, a good solicitor might ask the question.”
For astrologer Shelley von Strunckel, who writes horoscopes in The Sunday Times and London Evening Standard, interest in the “mystical” is increasing. “There’s a big buzz about it now and a growing interest in the more subtle elements in life.”
Concern regarding the alignment of buildings is not a new concept on British shores, as demonstrated by Stonehenge. According to von Strunckel, even the least mindful buyer of a property will be aware of the energy of a place when they walk into it – they just might not know how to articulate it.
“As an astrologer, we talk about cycles. For a long time, we’ve been in one that’s been very focused on the intellectual – what you can see and measure – to the exclusion of the internal and reflective. That’s beginning to change,” she says.
The energy of previous owners of a property can remain in the walls, she believes; in the case of a new build development, even that of the builders can be present long after they have finished.
Would-be buyers should, according to von Strunckel, stop and think about what they feel during a viewing, without being embarrassed.
Can negative energy immediately stop a sale? Not necessarily. “Regardless of any religious belief, you can always ask someone to come and clear the energy or bless the space,” says von Strunckel. “If in every other way the property works, it’s a lot easier to do that than fix physical problems like replacing small windows or bringing light into eternally dark rooms.”
Von Strunckel is hoping to leave some of her positive energy in her loft apartment in King’s Cross, north London, which is on the market for £2.85 million through Currell.
Bought nine years ago, the three-bedroom converted warehouse flat is flooded with light by its huge windows. It overlooks Battlebridge Basin and Regent’s Canal and comes with access to a 24-hour concierge.
“You get great views from here,” she says. “St Paul’s and the Shard in one direction, the London Eye in another and the arches of St Pancras to another,” explains von Strunckel. “It’s just time for me to move on. I’ll take my energy with me but hopefully some will be left for the new owners.”
Black Brick is heading to Hong Kong to capitalise on an international investment trend
Camilla Dell’s buying agency Black Brick is taking a team to Hong Kong after seeing “a surge in interest from Asians looking to invest in the central London property market”.
“A surge in leads” has come through in the last six months, reports the firm, mainly from India, Hong Kong and Saudi Arabia (but also from China, Oman, Lebanon and Singapore). The agency has also completed on ten international-buyer deals in the last 18 months, representing clients from Singapore, Oman, Saudi Arabia, Jordan, India and Lebanon.
Now Black Brick partner Caspar Harvard Walls (pictured) is heading to Hong Kong at the end of this month to charm private bankers, family offices and HNW expats living in Singapore and Hong Kong. “It is extremely difficult for those clients to conduct a London property search from so overseas,” notes Camilla Dell, “so using a buying agent makes sense.”
Camilla Dell, Managing Partner at Black Brick: “Asia has always been a key market for us and with a rise in interest from this region, we are keen to reach out to potential clients who need the services of a buying agent.
“Many Asian buyers can also often be confused by the sheer number of new build developments being advertised by London developers. Even for domestic buyers, it can be very confusing. We are able to help our clients to decide which development to buy above another and the nuances of the market. There are many pitfalls which overseas buyers can make when buying without advice such as overpaying, buying the wrong unit, buying in the wrong location and having the wrong advisors. For example, often developers will push buyers to use their own in-house solicitors and mortgage brokers who may not provide impartial advice.
“We are visiting Hong Kong to address this issue, and to meet with private banks, family offices and other professional intermediaries to spread the message that there is another way of buying. Paying for advice can more than pay for itself and avoid costly mistakes in the long run.”
Super-fast turnaround on Cresswell Place provides further proof that there is a market – when the price is right…
A turnkey mansion in Chelsea that took a well-publicised £16.5m price cut last month has been snapped up pretty sharpish.
The “one-off” behemoth on Cresswell Place came to market amid a blaze of publicity last summer at £37.5m, following a full-scale redevelopment programme at the hands of luxury specialist Albyns. A sale failed to materialise, however, and the property was put into receivership and relaunched just a couple of weeks ago at £20.95m – 44% below the original figure.
Last we heard, 50 viewings had already been booked in pre-launch, and we’re told a deal has already gone through (although the purchase price has yet to be confirmed).
The six-year project delivered an 11,046 square foot pile with bells and whistles aplenty; along with some glorious reception spaces and five bedroom suites, some “incredible” leisure facilities have been installed, including a 15m swimming pool, gym and spa. There’s also a car stacker for two large vehicles, a passenger lift to all floors, state-of-the-art tech throughout, and a separate staff area.
An unconfirmed report suggested an offer at £36m “fell away” last year.
Mayfair-based buying agency Black Brick recently flagged up a rise in the number of newly-developed properties going into receivership. The firm’s Camilla Dell said: “Sellers at every price point, including super-prime, are becoming more realistic. Understanding who you are buying from and their motivation for selling is crucial in order to get the best outcome on price. We have noticed an increase in the number of newly developed properties that were on the market for over inflated prices back in 2015/16/17 and which are now in receivership – in other words developers that got their timings wrong and are now suffering the consequences. Now could be an excellent time for buyers at the top end of the market to take advantage of sellers looking to close a deal and receivers looking to get their money back on un-sold properties.”
It’s not just PCL properties either. The remarkable Chalet Estate in Surrey has just reappeared on the open market on the instructions of LPA Receivers with an asking of £5m (a good £8m below the £13m it was originally launched at in 2016), with contents available by separate negotiation…
The North London area’s rough edges are slowly being smoothed out
By George Hammond
When describing Kentish Town in north-west London, estate agents like to use words such as “edgy” or “gritty”. Both would be desirable qualities in a piece of sandpaper, but not in a place where buyers might be looking for a family home — and certainly not in a place where the price of a family home frequently tops £2m.
Still, its “edginess” forms part of Kentish Town’s appeal, agents say. It’s perhaps why Taylor Swift chose to shoot part of her video for “End Game” there. The singer can be seen hanging out in Falkland Place and drinking in the upstairs bar at the Bull and Gate. She also reportedly filmed a segment in local kebab house Kentish Delight — though these scenes don’t seem to have made the final cut.
“There are some bits of [Kentish Town] that are still quite grotty,” says Camilla Dell, managing partner at buying agents Black Brick. Any buyer strolling past Kentish Delight on Kentish Town Road might be inclined to agree — agents admit the high street looks a little shabby. But move away from there — to the grid of streets north of Leighton Road or to one of the area’s highly Instagrammable multicoloured terraces — and the housing stock starts to look much smarter.
On the brightly painted Leverton Street, Chestertons is selling a two-bedroom house (in creamy yellow) for £1.1m. On Montpelier Gardens, the same agent is selling a large five-bedroom terrace for £2.7m. The area’s rough edges are slowly being smoothed out, says Gary Linton, founder of developer the Linton Group, which launched the Maple Building, a block of 57 apartments just north of Kentish Town station, in May 2016. The development is currently “about 75 per cent sold”, he says.
A chicken shop recently reopened as a sourdough pizzeria; and a subterranean public toilet reconfigured itself as a cocktail bar. “Gail’s [the bakery] is moving in where there was a tanning salon,” says Caroline Hill, chair of Kentish Town Road Action, “which I’m delighted about.”
A two-bedroom house on Leverton St, £1.1m
“It’s authentic London,” says Nina Coulter, director of residential development at Savills. “It hasn’t been over-gentrified and it hasn’t got loads of shopping centres: it’s somewhere to live.”
Not everyone agrees. In 2015, when the Mamelon Tower pub was being developed into apartments, squatters put up a banner that read: “We don’t want your yuppie flats, we are happy with our rats.”
House prices in Kentish Town have almost doubled since 2007 — up 94 per cent, according to Land Registry data compiled by Savills. Last year, the average cost of a second-hand home reached £805,000. Prices for new-builds can be much higher, as developers such as Linton have been moving in — a sure sign that an area is “up and coming”, says Dell. Aside from the Maple Building — where a three-bedroom penthouse is on the market for £2.495m, through Savills — recent arrivals include the Furlong Collection, where a four-bedroom townhouse is on the market with Foxtons for £1.5m; and Founders House, a former pub converted into one and two-bedroom apartments.
The cooling market for prime central London homes seems to have spread to Kentish Town. In 2017, the price of a square foot in the area fell 7 per cent, according to LonRes — with more than 37 per cent of homes having their price reduced before selling. As confidence in the market recedes, the number of transactions has slumped too, down 33 per cent since their peak in 2014.
Over the road from the Founder Arms development is a Grade II-listed building with a sign on it that reads: “12 new homes, one cinema space, coming soon.” Developer Uplift Property took over the premises in 2015, but it’s still not clear when it will be complete. “Soon went past a long time ago,” says Hill.
Traditional houses on Patshull Road, Kentish Town
Buying guide
As well as affordability, buyers are drawn to good quality local schools, including the Collège Français Bilingue de Londres
A number of local streets are lined with pastel-painted houses, a convention initiated on Kelly Street, which is now a conservation area
The area is served by underground and overground railway lines, as well as direct trains to Luton airport
Properties around the historic piazza have been upgraded but sales have slowed
By George Hammond
February 2nd 2018 – The Financial Times
Stalls and shops in Covent garden market
Prime property added market stalls in London’s Covent Garden properties around the historic piazza have been upgraded but sales have slowed shops and stalls in Covent Garden market.
At various times the home of paupers, performers, prostitutes and the pious — it started life as a monks’ vegetable patch — Covent Garden’s identity has been haggled over and traded like produce at a hawker’s stall. Its latest reinvention is at the hand of developers, insistent that this one-time “touristville” is now a smart residential district in what developers and agents have dubbed London’s “Midtown”.
Since the developer Capital & Counties (Capco) purchased the market building and nearby properties for £421m in 2006, buyers and surging residential prices have given credence to that idea. But with values across prime London tanking — down 15.9 per cent since the 2014 peak, according to Savills — vendors in this former fruit and flower market are ready to barter.
Before Capco moved in “Covent Garden was a bit seedy”, says Nina Coulter, director of residential at Savills. “Some of the retail was a bit low-end.” Since Capco’s acquisition, though, “even the quality of the street performers has gone up”.
The developer’s influence is evident all around the piazza. Restaurants — including Balthazar and the Ivy Market Grill — and retailers have been brought in. Today, Capco boasts that Covent Garden is home to the “most beauty brands per square metre” anywhere in London. The most dramatic facelift, though, has been on the local housing stock.
“Because the perception of the area has improved and it’s been gentrified, the developers have moved in,” says Coulter. Aviva Investors recently converted a former jazz club into 14 apartments at The Colyer, where CBRE is listing a three-bedroom penthouse for £3.495m. Nearby in the newly-built 38 Southampton Street, prices for a one-bedroom flat start at £975,000. This year will also see the completion of Capco’s Floral Court development. As well as 45 homes, the project will include restaurants, shops and a courtyard. “We’ve not seen anything like it in Covent Garden,” says Lisa Hollands, executive director of CBRE residential.
The effect on house prices has been significant. In 2007, the average square foot of property in the Covent Garden area would have cost you around £1,000. A decade on, that figure had risen 60 per cent, to £1,600, according to LonRes. Prices for new-builds are much higher. The three-bedroom penthouse at the Colyer, at £3.495m, costs more than £2,400 per sq ft.
There are signs, however, that the surge is petering out. Last year, prices per square foot in the postcodes spanning Covent Garden fell 1.4 per cent from 2016, according to LonRes. Properties languished on the market for an average of 170 days, the longest period of the past five years. On Macklin Street, a two-bedroom apartment in a converted warehouse is for sale at £2.3m, with Knight Frank.
Sales of new-builds have slumped. Between January and September last year, LonRes recorded just two new-build sales, compared with 18 in 2016.
Three-bedroom penthouse at The Colyer, £3.495m
“A lot of the new boutique developments which were completed when the market was still up, have had to cut prices a lot in the last few years,” says Louisa Brodie, head of search and acquisitions at estate agents Banda Property. She puts the blame on stamp duty reforms in 2014 and 2016, which first raised the tax bill on all homes priced above £937,500 and then added a 3 per cent premium on second homes.
There may be more localised reasons behind the price falls, though. Agents say that much of Covent Garden’s recent ascent was built on its relative value. “One of the reasons people were buying four or five years ago is it looked great value compared to Mayfair or Kensington,” says Camilla Dell, managing partner at buying agent Black Brick. “But now the price per square foot is the same as Kensington on new-builds.”
Buyers may be reluctant to return to Covent Garden’s resale market. “Some of the older stock looks knackered,” says Jo Eccles, managing director of SP Property. “People are used to having pools, and all they have is a tatty water feature.”
That’s unlikely to play well with wealthy European and Far Eastern buyers. Overseas buyers comprise roughly half the local population. “Domestic buyers wouldn’t have thought of it before the gentrification,” says Peter Preedy, a director at JLL. They’d go to the theatre, but would they live there? God, no.”
Even now, agents concede that the bustle of Covent Garden can dissuade clients, with many preferring more residential neighbouring postcodes. “To buy in Covent Garden you have to love Covent Garden,” says Dell. Convincing buyers to see past the street performers and tourists might need more than the flashy new “Midtown” rebrand.
King Street, Covent Garden
Buying guide:
Covent Garden’s piazza, the surrounding houses and St Paul’s Church, on the piazza’s south-west side, were designed by 17th-century architect Inigo Jones
The Royal Opera House, just off the piazza, is the third entertainment venue built on the site. The Theatre Royal, built in the 1730s, burnt down in 1808. Its successor met the same fate in 1856
Covent Garden is less than 15 minutes from the City of London via the Tube
What you can buy for . . .
£1m A one-bedroom flat in a Grade-II listed building
Take a look at any model on the cover of a magazine these days and you assume the image has been airbrushed to remove any blemishes: sadly, digital trickery has become an acceptable fact of life in the world of publishing. Now, the manipulation of images has entered the world of property. In the US, estate agents — or realtors as they are known there — have been using digital technology to ‘improve’ photographs of properties for sale for some time, and, inevitably, this practice is now coming over here.
The process is simple — and controversial. Estate agents instruct photographers to take images of a property as they would normally. Then the digital images are sent to studios where they are ‘treated’.
How far this treatment can go is the subject of some debate but generally, for its proponents, the idea is that the doctored images should represent the potential of a property: what it could look like. This could often involve ‘dressing’ an empty flat but it could also extend to removing the furniture in the original photographs and replacing it with more tasteful items, or changing the colours and shades of a room. However, as the website of one US virtual staging company illustrates, it can do something as dramatic as add a swimming pool to a garden.
Changing the sheets: Stowhill Estates apply the technology to a bedroom
The photographs are sent back to the estate agents who upload them onto property portals, such as Rightmove and Zoopla, with a disclaimer stating something along the lines of ‘we have used digital technology to give an impression of the home’s potential. Actual furnishings may not be as they appear in some photographs.’
Stowhill Estates is one of the first British estate agents to adopt virtual staging here. Stowhill agent Lucy Joerin says they don’t use it on every property they market as many are properly presented already, with well furnished rooms and up-to-date décor but it’s a useful tool to have where there are time or budget restrictions to presenting the house in the best way. Virtual staging, she says, is a natural extension of dressing a home for sale.
‘Both physical and digital staging of homes is common practice in the US, where it is generally understood that the way you live in a home is very different to the way you sell a home,’ she says. ‘Most of the top real estate agents in the US will hire specialist staging companies who will come and remove all the existing furniture, and replace it with high end furnishings, in order to present the home in the best possible way − almost like dressing a shop window. Many owners even move out while their home is up for sale.
‘Here in the UK, where homes generally take much longer to sell (months rather than 30 days), it’s clearly not practical to move out and it’s prohibitively expensive to rent furniture for weeks or months. That’s where virtual staging can really benefit a seller who may not have the time, or budget, to hire in physical furniture.
‘We’ve used our virtual staging service on a number of different types of property, from an empty flat in Windsor to a three-bedroom home in Maidenhead where the owner needed to sell quickly but did not have the budget to clear out all her existing furniture or redecorate.
‘We’ve also used it in new-build homes, properties where there might be just one room that is unfinished, or where there are tenants in the property who don’t want their furniture and personal items to be photographed.
‘In any home that we virtually stage, we are extremely careful to only change decor and furnishings and never the actual structure or physical features of the home. You should certainly not move doorways, ceiling mouldings, window frames or bathtubs/showers, and we would never gloss over any structural faults such as cracks in the walls.
‘What we are trying to achieve is a visual image of how the property could look with different furniture or decor to give potential buyers a clear idea of the homes’ potential. We also always make it very clear which of our pictures have been digitally staged. Our clients have always responded very positively, as it enables them to see what could be possible.’
Caspar Harvard-Walls, a partner at London buying agent Black Brick, is concerned. ‘I understand why people are doing it. Normal “physical” staging — when you rent furniture to dress an empty flat is very expensive.
Just add water: This five-bed home located in New Haven, Connecticut, had a pool added by Why Not Homes to show potential buyers what could be done with the exterior space of the property.
‘It can cost about £450 a week to dress a two-bed flat with a minimum of a 12-week contract. And for some time developers have used CGIs for new build developments which are not completed. And I can see how that be extended for secondary marketing.
‘But it could lead to people being disappointed. Maybe they haven’t noticed the disclaimer. It should also be pointed out to sellers that sometimes the virtual staging can look appalling.’
Zach Calhoun, who runs one of the US studios offering virtual staging services — Why Not Homes — defends his service, which he has run from a studio in Houston, Texas since 2016. ‘It’s been around for years in the US but has only just started becoming popular internationally. We now have clients coming from the UK, Canada and New Zealand,’ he says.
Sky’s the limit: Why Not Homes says the technology shows a home’s potential.
‘I would say half the realtors in the US I speak with have heard of it and 15 per cent use it. It’s hard to tell how many properties have been virtually staged, but our group alone has staged more than 2,500 photos for more than 800 projects. My advice to our clients is: disclose everything, use both empty and virtually staged photos for the listing, do not hide anything or misrepresent anything.
‘Virtual staging is for people who see an empty room and have trouble visualising what’s possible. For example, my wife walks into an empty room and she sees possibility, I walk into an empty room and I look for cracks in the wall.
‘So the service needs to be used for selling possibility, not tricking people. Even though we do not have control of the use of our photos, we never advise hiding anything. But as a selling tool, it’s incredibly powerful to create foot traffic.
‘Once the buyer has seen the photos, walking into an empty property can be much more enjoyable and lead to faster offers. After all, you don’t buy a house’s furniture, you buy a home to make your own.’
With so much advice available, how should vendors decide who to listen to? We outline the factors to consider
By Francesca Steele
January 12 2018 – The Times
This five-bedroom house in Broadway, Worcestershire, is on the market for £1.9 million with Savills.
The old adage goes: “There is no such thing as a bad property, just a bad price.”
A sharp slowdown in house price growth last year, along with several reports of sellers dropping asking prices in central London, means that many homeowners may be wondering how to price their house sale correctly. Should you listen to your estate agent, or look at house price indices? How much more should you expect buyers to pay for your designer kitchen?
“The key is research,” says Caspar Harvard Walls, a partner at Black Brick, a buying agency. “There are some estate agents who are desperate for stock, and so will value a property high so that they can get it on their books. All too often the overpriced property is then used as a ‘lever’, whereby agents will show it alongside more accurately priced alternatives in a bid to make them look cheap. This does not help the owner, and they will have to bring their price down.” We answer your pricing questions.
What do the house price indices say? Research from Nationwide shows that house prices rose by 2.6 per cent last year, compared with growth of 4.5 per cent in 2016. London was the worst-performing region, with house prices falling 0.5 per cent last year. Meanwhile, prices in the West Midlands grew by 5.2 per cent, and in the East Midlands by 4.6 per cent.
In Chelsea, west London, this five-bedroom home is on sale for £27.5 million.
Regional disparities could also be significant this year. Savills forecasts a further house price fall of 2 per cent in London this year, and growth of only 0.5 per cent in the southeast and east of England. Over the next five years the estate agency predicts growth of 7.1 per cent for London, compared with a rise of 18.1 per cent for the northwest and 14.8 per cent for the West Midlands.
How can I tell how much my house is worth?
Don’t look solely at property portals, as these will tell you the prices that sellers are asking, not what they are achieving. “Get the opinion of three local agents,” says Christian Warman, a director of Tedworth Property. “Often people opt for the middle valuation. There is logic to this, but also ask each agent to demonstrate how and why they’ve come up with the price they have given. If they can’t justify it, alarm bells should be ringing.” Compare the agents’ valuations with sold price data on Rightmove, which shows the latest Land Registry figures. David Lee, the head of sales at Pastor Real Estate, says: “Do some research into what has sold in your area and a radius of five streets within the past six months.” Alex Newall, the founder of Barnes Private Office, says: “Don’t look at Rightmove or Zoopla’s approximate pricing of your house. They are mostly incorrect.”
Should I under price?
It depends. Round numbers pick up people searching online for different price brackets. “Gone are the days of pricing just under or over a price point — say, at £499,950 in favour of getting £500,000,” says Tim Simmons, the head of residential sales at Humberts. “Vendors will render themselves invisible to those looking in the £500,000 to 550,000 price point.” Vendors keen to sell quickly are often advised to drop down a price bracket and add “offers in excess of”.
Should I factor in higher stamp duty?
Absolutely, says Alexander Lewis of Knight Frank. “Anything above £1 million is being down-valued because of higher stamp duty [since it went up in 2014]. Buyers expect sellers to factor at least 50 per cent of [the loss] into their pricing.”
Does my location matter?
Yes. Lewis says: “Not only should you think about what is selling in your neighbourhood, but what makes your house worth more than the neighbourhoods near by.”
Prime southwest London properties have experienced a decline in prices over the past year, according to Savills. Property prices in Battersea, Clapham, Fulham, Wandsworth, Barnes and Richmond fell by an average of 4.2 per cent last year, making it London’s weakest prime market. Regional city markets are likely to hold their value, but check out the competition.
So what is likely to alter the value of my house?
Transport links are key (including imminent ones, such as Crossrail), as are good local schools. Agents say that buyers are happy to pay more for completed works that add structural value, such as a loft conversion or extension, but not for expensive cosmetic changes such as a new kitchen. “If something has been on the market for six months or more, even if you are getting lots of viewings, you may want to reconsider the price,” Lewis says.
Knightsbridge isn’t usually somewhere to shop on a budget but this year one lucky home hunter might pick up a three-bedroom apartment on Walton Street — valued at more than £3m — for £10.
All he or she need do is beat a few hundred thousand other hopefuls in a cricketing “spot-the-ball” competition. As well as a share of the freehold, the winner of the property will have stamp duty paid and receive a matte-black Jeep.
“It’s a sexy house,” says Santa Agolli, founder of Your Laddr, which is organising the competition. “It’s next to Harrods, it’s a dream lifestyle.” This property event is launching her business: Your Laddr will eventually offer a range of homes through the same form of competition.
“For 10 quid, why not have a go?” asks Noel De Keyzer, director of Savills’ local office. The average sale price of Knightsbridge flats in 2017 was just over £3m, with houses close to £5m, according to data from LonRes. The 1 in 380,000 chance offered by Your Laddr might be more appealing than ponying up the actual costs.
“So long as the scheme involves a sufficient element of skill, judgment or knowledge, ‘spot-the-ball’ competitions can operate lawfully in the UK without the need for an operating licence,” says David Copping at Farrer & Co, the law firm. He adds, however, that if prizes can be awarded on the basis of pure luck or guesswork, the competition is likely to be subject to regulation by the Gambling Commission.
Local agents describe the competition as a gimmick, but vendors may be open to new ideas. Prices are down 15 per cent since 2014, according to LonRes, and homes that did sell last year spent an average of 157 days on the market, with 45 per cent having their prices cut.
Like other affluent London neighbourhoods, Knightsbridge has been hit by what De Keyzer calls “Osborne’s changes” — the stamp duty reforms introduced by the former chancellor, which first raised the bill on properties costing more than £937,500 and then added a 3 per cent premium to all second homes. “People have not adjusted to the changes we’ve seen over the past 18 months,” he says. “[The vendors] might not have been able to shift the apartment the conventional way.”
“As a buyer you can’t afford to make a mistake if you’re paying 10-15 per cent in stamp duty,” says Harry Dawes, head of Knight Frank’s Knightsbridge office. The caution has been palpable among Knight Frank’s customers: “At the peak of 2014 we were averaging 18 viewings per offer, now it’s around 45,” says Dawes.
“Our register in the Knightsbridge office has never been so low,” says De Keyzer. “We’ve seen transaction numbers at the top end [on properties valued at £5m and above] down by 40 to 50 per cent.”
Discretionary buyers have been discouraged by the stuttering market and many have become renters until confidence returns. Buying agent Camilla Dell has an alternative explanation: “Knightsbridge is not the desirable postcode it once was,” she says. “A lot of my clients say Knightsbridge has lost a lot of its gloss.” Even Middle Eastern buyers — so established in the area that Harrods is now an asset of the Qatari state — are venturing to the garden squares of Belgravia and Mayfair, she says.
Before the downturn, Knightsbridge had been on a streak. The area straddles Kensington & Chelsea and the City of Westminster — the two best-performing markets in the UK from 2005-2015, according to Savills Residential Research. During that decade, prices there rose 80 per cent or more.
One reason for the boom was a series of super-prime developments, such as The Knightsbridge, 201 residences near Hyde Park. Today, a one-bedroom flat in the development is on sale for £3.495m — more than £4,000 per square foot — with Harrods Estates.
The Knightsbridge was followed in 2011 by One Hyde Park, a Candy brothers development which launched at a headline-grabbing £6,000 per sq ft. “The reputation of One Hyde Park is still head and shoulders above anything else,” says Simon Barry, head of New Residential Developments at Harrods Estates. Dell is less flattering, describing it as “a goldfish bowl”.
The address certainly commands a premium, with a five-bedroom apartment marketed for £50m by Knight Frank. A number of apartments in the development are owned by offshore companies — at last count, it was reported that 20 have purchased homes there in excess of £20m.
Transaction volumes in Knightsbridge have fallen 36 per cent from 2014 levels, according to LonRes, and even a small bounce back last year, when some 26 more homes were sold than in the year before, has done little to raise morale among local agents. For now, finding a ball might be easier than finding a buyer.
Buying guide
Transaction volumes in Knightsbridge have fallen 36 per cent from 2014 levels, when 318 homes were sold, according to LonRes. In 2017, just 202 changed hands
Two-thirds of students at Imperial College in Knightsbridge are from overseas. Agents report an increase in buyers — particularly from China — looking for high-end student accommodation
Hyde Park barracks, home of the Household Cavalry, was earmarked for development, but failure to find a home for the mounted regiment stalled plans
What you can buy for . . .
£1m A one-bedroom flat opposite Harrods
£7.5m A five-bedroom penthouse in a listed building
