April 2015

Political capital: budget changes focus yet more attention on sub £1m sector

While our own new client sign-up points to continued breadth and depth of demand for London property, there is understandable hesitancy among some buyers with budgets above £2m ahead of the general election. Heavily influenced by the desire to make political capital ahead of the election, UK Chancellor George Osborne’s March Budget contained several policy points of note for the UK property industry. In aggregate these measures are likely to drive increased attention on the sub £1m bracket which has continued to be the strongest area of the market since the change in stamp duty threshold rates in December.

For those seeking to begin their lives on the property ladder, the Chancellor developed the government’s popular Right to Buy scheme with new measures to help buyers put together the all-important deposit. The government will contribute an additional £50 for every £200 saved in the new Help to Buy Investment Savings Account up to a maximum of £3000. Couples can therefore receive a maximum of £6000 from the state.

For more senior UK citizens, the UK government had already announced its intention to end the compulsory purchase of annuities by retirees. Those changes take effect this April, freeing pensioners to cash in their pension pot and reinvest it. This year’s Budget broadened the new freedoms to existing annuity holders, who will be allowed to cash in their policies from next year. A number of market commentators have suggested that investment property is likely to prove an attractive home for many, potentially offering income levels superior to annuities at current rates as well as an asset to pass on to future generations. In a recent survey of those approaching retirement age in the UK, a third of respondents said they would consider investing in property as part of their pension.

We believe that pensioners need to tread carefully before plunging into the Buy-to-let market and making decisions that may prove costly in the long term. Not every property makes a good rental investment and understanding the precise needs of the investor, the market and what appeals to tenants is crucial for success. As with all investments, pensioners considering Buy-to-let should seek professional advice.

Sydney bubble, South African investment freedoms positive for London

In international news we note the significant increase from 4m rand to 10m rand in the annual foreign personal investment allowance announced by the National Treasury in South Africa in February. Including the 1m rand discretionary investment allowance married South African couples will be able to invest up to 22million (£1.2m) rand outside of their home country from April 1. Always a popular destination for South Africans, we believe London will benefit from these greater investment freedoms. Last month highlighted the bubble conditions of the property market in Sydney. The dangers of a sharp retracement was recently highlighted by the Australian Reserve Bank’s in its annual financial stability report. Australia’s central bank said that: “heightened level of investor activity and borrowing could amplify the housing price cycle and increase the risk of significant price falls later”.

Camilla Dell, Managing Partner of Black Brick says: “The likelihood of a price correction in Australia’s property market is increasing. The Reserve Bank’s report is a warning to investors not to take high property prices and current rental yields in Australia for granted. Black Brick is advising its clients – many of them investors from Asia – to look elsewhere for more sustainable and secure capital growth. In London, high-end property yields continue to grow at what we believe to be a sustainable rate. With the global macro-economic picture looking increasingly uncertain, it is important for property investors to be properly advised.”

Full of Eastern promise – why property bargain hunters are now looking East

Is the phrase ‘prime East London’ a contradiction in terms? Not any more. While those looking for better value away from the rarified prices per square foot of properties in core Prime Central London have previously focused their attention largely on South West London, there is a growing stream of smart money now heading East. The growing presence of high profile estate agents underlines the area’s increasing popularity. In February, Marsh & Parsons opened its 23rd London office in Shoreditch with Savills swiftly following suit. With a reputation for Bohemia and the acceptable face of Hackney, Shoreditch’s industrial heritage and warehouse conversions are already popular as office space for London’s fast growing media and technology sectors.

Five minutes walk from Liverpool Street station and the City, Shoreditch is just one of an increasing number of enclaves in Prime East London which are now the subject of long overdue interest from both domestic and overseas residential property buyers looking for value. Areas such as Bethnal Green, Clerkenwell, London Fields,  De Beauviour Square, Wapping and London Bridge may not be familiar to many of our overseas readers, but these areas offers buyers a diverse range of residential housing stock, settings and communities at prices that are significantly lower than other areas of Prime London. Black Brick is one of the few property search agents who not only covers Prime East London but who has long-term specialist expertise in the area.

Property acquisition of the Month: Value in De Beauvoir Square

Our British clients already lived in Islington and wanted to find a buy-to-let property with good potential for capital growth in the same area. They clearly knew the area well but despite their proximity couldn’t find anything that fit their remit for a premium property in the highly competitive sub £1m segment for under market value. We sourced them an immaculate upper maisonette with roof terrace on one of the most sought after addresses in De Beauvoir, a fabulous enclave of period housing just north of the City and in between Dalston and Hoxton. We entered into a competitive bid situation with one other buyer.

We initially lost out to the competing ‘cash’ buyer.  However, when the original buyer failed to act quickly enough our relationship with the agent and their full confidence that our client would complete allowed us to agree the sale at £925,000. This price equates to £762 per square foot, where apartments on inferior roads in De Beauvoir have traded hands at closer to £1,000 sq/ft. Please click here to view the full case study.

Best in class – British schools in the spotlight

At Black Brick we have long been aware of how many of our clients are attracted to the UK in the first place by the choice and quality of education on offer. According to a recent report in the Financial Times newspaper, 32% of boarders at UK private schools are now children of non-UK nationals. Since 2007, the number of Chinese pupils at British private schools has doubled, while the number of Russian pupils has trebled, attracted by what the FT describes as British “boarding schools’ image as purveyors of a gold standard of education”. But school websites and reported academic results only tell part of the story, so how do overseas families know which school is right for their children? What are the strengths and weaknesses of each school? At Black Brick our links to the very best school advisers is becoming ever more important. It’s all part of the Black Brick service – making our clients’ lives easier, and any move to the UK as stress free as possible. As well as school advisers, all clients of Black Brick get access to our valuable Black Brick “Black Book” – our directory of the best architects, interior designers, landscape gardeners, insurance brokers, tax advisors, concierge services and private banks among others.

Essential Services – client feedback on our Vacant Care and Property Management Services

Our Vacant Care and Property Management offerings have grown quickly in recent years. We believe this reflects both the time pressures on our client base and an unwavering commitment to the very highest levels of service. But don’t just take our word for it. Here are just a few of the positive comments our services have received recently; “I switched to Black Brick because of the disappointing service I was experiencing through my high street letting agent’s property management services. It has been an excellent decision. Their responsiveness and thoroughness has made my life as an overseas land lord much easier.” An Investor, Hong Kong

“On behalf of my family , I want to tell you how much we appreciate the endless effort and care of service you dedicated to getting Albion Gate to its optimum condition, in both cleaning and maintaining. We all admired your ingenuity in creating that outstanding follow up and Vacant Care service to us. I was personally impressed with the way you kept your self-motivated and focused as if you are the apartment owner, even in the face of several obstacles, you managed through with great determination.” A Buyer, Kuwait.

“Being a Black Brick customer for more than one year, I feel very satisfied with the service. My manager Sophie is always prompt, kind and responsive which gives me the knowledge that my property in Thackeray House is in good hands.” An investor, Russia.

“As a non-resident, I am very pleased I could find Black Brick Vacant Care Service to help us manage our property on John Street in London. They bring a real trouble free service, and help us to solve the administrative and practical details. They were also very helpfull for the decoration and the furniture of the flat. Sophie is always available and very effective. I am very satisfied with the Vacant Care Service and would highly recommend it.” A buyer. France.

“Having so many contacts in the UK property market provides our Company the choice of the very best the market has to offer with our preferred Property Agent List reflecting this. Black Brick Property Solutions LLP (“Black Brick”) is among the top of this list due to their continued professionalism, exceptional service, personal touch and fantastic results for our clients.” A Trust Manager, Channel Islands. 

“My wife and I used Black Brick’s buying service to acquire our property in Drayton Gardens in 2014 as a secondary residence.  We were very happy with the buying service so when it came to considering engaging someone to look after the property in our absence it made sense for us to consider Black Brick’s vacant care service. We have now used the service for 9 months and are as pleased with this service as we were with the buying service. Since we are based overseas it is important  to us to have someone on the ground in London who we are confident will maintain our property in an efficient and professional manner. Black Brick’s service, led by Sophie Amasha, has fully met our requirements. The weekly inspections and prompt addressing of any maintenance issues and pre arrival and  post departure services have meant that on our visits to London we have been able fully to enjoy the property rather than spend time trying to deal with property related issues ourselves.” A buyer, Cayman Islands. 

“We purchased our investment property, Viridian Apartments, with Black Brick as our buying agent. Upon completion, we had the task of redecorating the property and finding a tenant. After reviewing the proposals from other reputable agents with prominent offices in Battersea, we decided to strengthen our relationship with Black Brick and appointed them as our managing agents.

Though other agents were offering lower commissions, we decided that as overseas landlords, our property and our tenant would be better looked after by an agent who would be more personally involved. Sophie Amasha is extremely efficient, knowledgeable, hardworking and has a delightful personality. The redecoration and furnishing was completed in a timely manner and done efficiently and to a high standard, due to the great relationship that Black Brick and Sophie have with their service providers and the close supervision that they undertake.

Sophie’s guidance was invaluable in promptly finding a professional couple as our tenants, and negotiating the lease and rental. This was done in the week before Christmas, when everyone else would have been preoccupied with the festivities, and deferred the property to January’s listing! I am pleased to say that we made the right decision, and I believe that our tenants are extremely happy with the service that they receive whenever there is an issue with the property”. A buyer, Kenya.

For more information about these services, recent case studies and for additional client testimonials please go to www.black-brick.com or call us on +44 (0) 203 141 9861. We would be delighted to hear from you.