Prime London property transactions on the up

Prime London property transactions are on the up at the start of 2017.

According to Strutt & Parker’s Residential Quarterly report for Q1, transactions have increased across Prime Central London (PCL) for the past three quarters.
London has historically been the primary driver of national house price growth, but in 2016, the region was outperformed by the Outer South East, East Anglia and the South West regions.

Vanessa Hale, Partner in Research at Strutt & Parker, said: “UK house prices grew 4.1 per cent year on year to Q1 2017 but in PCL it was a very different story and prices fell by approximately 7 per cent in 2016, leaving values around 13 per cent down from the 2014 peak. The first quarter of 2017 has however seen a slight upturn in purchaser activity and realistically priced, good quality stock is selling reasonably well.”

In PCL, transactions in the sub £2m market in PCL saw a decline of 32 per cent when comparing Q1 2017 to Q1 2016, however the entire PCL market at all price levels is down 27 per cent for the same time period and follows three consecutive quarters of increased transactions. It is believed that the market may have already experienced the bulk of price falls. In addition, the recent weakness in sterling has played a part in attracting overseas purchasers and given a spur to higher value market sector activity. However, we continue to see the dominance of UK domestic buyers in PCL, with UK expat money seeking homes in the country over £2m, likely taking advantage of the US dollar strength against the UK pound.

Charlie Willis, Head of London Residential Agency, says: “We have seen a positive change in buyer sentiment and an uplift in transaction levels in the first quarter of 2017 compared to the end of last year. Values have now softened by up to 10% and buyers realised there are good opportunities out there. Meanwhile sellers are beginning to understand the importance of realistic pricing. Stamp Duty which was a concern for many buyers last year, is no longer causing such an issue and the market has absorbed this extra taxation.”


Prime London property bounces back in 2017

21st April 2017

The Prime London property market is already bouncing back this year, according to one developer, which has sold over £50m of real estate this year.

Amazon Property, an estate owner and developer, has sold £50 million worth of units in the last eight weeks. These have been primarily fuelled by its new flagship project, The Park Cresscent, and the firm’s West End portfolio in general. The luxury apartments bought by wealthy investors are located in Regents Park, Mayfair, St James’ Water and Bayswater.

Not many sales were needed to rich that figure, with the prices of luxury units ranging from £5 million to as high £10 million. Two-thirds (65 per cent) of sales have gone to UK buyers and European purchases, with the other third made up of buyers trading in dollars, including those from the USA, Middle East and Asia.

Families and couples have been driving demand, notes Amazon, as people seek somewhere to live as they work in the private equity, coporrate or media sectors within the UK capital.

Charles Gourgey, CEO at Amazon Property says: “The Prime London residential market has bounced back significantly since the start of 2017 and we have witnessed a rise in both enquiries and sales. Buyers have been attracted by the exceptional quality of the locations and developments within our West End portfolio and the fact that they are buying turn-key homes which they can move into immediately.”

London Loves Business

London property market stabilises at start of 2017

7th April 2017

The London property market is showing signs of stabilising at the start of 2017.

The UK’s capital was weighed down by uncertainty surrounding the vote to leave the European Union last year, not to mention the revised Stamp Duty charges. Nonetheless, despite “some of the most challenging conditions since the Great Recession of 2008”, Cluttons reports that the market is stabilising.

“While capital values continued to recede throughout 2016 and transaction levels slipped to levels not seen since 2012, the final quarter of 2016 appeared to emerge as a relatively stable quarter for the most desirable postcodes across prime Central London,” say the firm’s report, “with values decreasing by a marginal 0.4 per cent on average.”

A “slightly more normal amount” of activity is now detectable, according to the report, with buyers and vendors returning after a brief hiatus.

“While some international buyer segments are still benefiting from sterling’s weakness, it is unlikely that this cohort will make up for the shortfall in domestic buyer activity. Affordability constraints still linger, as does the availability of appropriate stock,” comments Cluttons.

The firm predicts a turnaround in capital value growth in 2018, which is predicated on clarity emerging as the UK reaches the end of its two-year Brexit negotiation window.


Competitive bidding returns to London’s prime property market

13th March 2017

Competitive bidding is returning to London’s prime property market, as activity picks up at the start of 2017.

Property buying agency Black Brick says pent-up demand, the effects of sterling’s fall, and more realistic asking prices are bringing wealthy buyers back to the UK capital.

Camilla Dell, Managing Partner of Black Brick, comments: “We are seeing a return of competitive bidding across the spectrum, particularly on property that is priced correctly and in line with the current market. For example, a flat in Queen’s Park came on the market for £750,000. There were other flats in the area of the same size but these were over-priced, so attracted little interest. With a realistic price, the flat sold within four days for £785,000 – there were four competitive bidders, all of whom offered over the asking price.”

“Not only is some property attracting competition, but we have also seen a return of gazumping,” she adds. “We recently secured a flat in Canary Wharf for a client at £1.48m, our initial offer of £1.44m was accepted but we were gazumped by another buyer who offered £1.5m. Luckily, we managed to re-agree the sale at the original asking price as our client was a cash buyer.”


Trump border confusion to boost UK appeal?

10th February 2017

UK property may benefit from the debate currently surrounding Donald Trump’s controversial border controls, say agents, as wealthy investors could turn elsewhere.

The border control, which was introduced shortly after the inauguration of the 45th US President, saw a temporary ban placed on citizens from seven countries entering the USA. Since then, though, a Seattle court has halted the order, effectively reopening the US borders to those seven nations. This week, the 9th US Circuit Court of Appeals ruled unanimously against the government’s appeal to reinstate the ban.

Some agents argue that the ongoing debate surrounding the issue may benefit the UK’s real estate market, as high-net-worth individuals and investors from the temporarily banned countries could turn elsewhere for a more welcoming destination.

Camilla Dell, Managing Partner of Black Brick, comments: “President Donald Trump has certainly begun his presidency as he promised – with a blizzard of activity that is doing much to up-end Washington and the established way of doing things. The UK offers residence and citizenship to entrepreneurs and investors who meet certain conditions, and 68 such visas were issued last year to citizens from the seven countries affected by the travel ban, namely Iran, Iraq, Somalia, Sudan, Syria and Yemen, (according to law firm Collyer Bristow).

“The UK in general, and London in particular, has long been an attractive destination for international investors, especially those from more volatile parts of the world, offering as it does, a stable political and legal system and a multicultural and tolerant environment. As Brexit looms, the UK will be redoubling its efforts to remain open to international investment and high-net-worth residency.”

Indeed, recent research confirms that the UK remains a popular destination for overseas buyers, with the weakened sterling in the wake of the country’s Brexit vote making UK property more affordable and attractive.

Foreign buyers dominate London prime property sales

9th February 2017

London’s prime property market has not lost its global appeal, according to one luxury residence management company.

New research from Rhodium Residence Management shows that overseas investors make up for over half of all prime sales in the UK capital. That share of market activity climbs even higher to 80 per cent when it comes to new build sales, as overseas buyers tend to be cash buyers – and that is “often the key to unlocking the viability of new developments”.

“Without buyers prepared to commit before construction, the supply of affordable homes would almost certainly be curtailed,” notes the firm, which has a £1.047 billion portfolio, with around a quarter made up of super-prime property in Prime Central London.

“London’s super-prime market is concentrated within the boroughs of Westminster and Kensington & Chelsea, where we estimate there are over 7,000 homes worth more than £5 million. This is over 49 per cent of London’s total and very high numbers of them are in Knightsbridge and Belgravia,” says the firm.

In 2016, only 6.9 per cent of all £5 million-plus sales in 2016 were new build, but 95 per cent of Rhodium’s property portfolio were built in the last five years, used as prime or second homes.

The data sounds dramatic, but UK buyers are far from absent: Rhodium’s portfolio show that British super prime owners are the most established presence, making up 24.4 per cent of sales. Russian buyers, once one of the biggest players, make up only 6.4 per cent. Interest from China, meanwhile, is on the increase. Indeed, with one billionaire in Asia created every three days in 2015, that influx of interest “looks set to boost UK economy”, says the report.

17.9 per cent are from the European Union and another 7.7 per cent elsewhere in Europe, 16.7 per cent from Asia, 15.4 per cent from the Middle East, 9 per cent from the Americas, and 2.6 per cent from the Pacific.

The figures confirm London’s ongoing appeal to global investors. Indeed, the city is home to more multi-millionaires than any other world city and receipts from super-prime residential investment accounted for 14 per cent of SDLT receipts in 2015/16.

Most occupiers of super-prime properties (42.3 per cent) are aged 40-49, with a third aged 30-39, 12.3 per cent under 30 and 11.5 per cent over 50. Residents from Europe are younger than those from Asia and the Middle East. Half of the EU owners are aged under 40, while two-thirds of those from Asia and the Middle East are over 40 years old.



London still number one for luxury real estate

23rd January 2017

London is still the number one city in the world for luxury real estate.

New research from Wealth-X, in collaboration with Warburg Realty and Barnes International Realty, maps out the current state of the global property market, and the UK capital comes out on top, proving the most popular city among ultra-high net worth (UHNW) investors – those with a net worth of $30 million or more.

10 per cent of UHNW individuals own five properties or more, cementing the ongoing popularity of bricks and mortar as a reliable, stable investment. London’s prime market, though, has faced numerous headwinds in the last year, from stamp duty changes that have hiked the cost of investing in luxury homes to the EU referendum, which has led to some doubts about the country’s relationship with Europe and the city’s future as a financial hub for major corporations. Nonetheless, London’s appeal shows no sign of waning, according to the Global Property Handbook, which the report attributes to its cultural and financial security.

“This report is the first-ever attempt at putting the global real estate market into perspective,” says Frederick Warburg Peters, CEO of Warburg Realty. “Using the resources of three companies, we’ve taken a deep dive into where the world’s highest earners are living, playing and investing – and explored the practical, emotional and financial factors involved in their buying decisions.”

Behind London in the Alpha Cities Index are New York, home to the largest ultra-wealthy population and scores of the top-class universities, Tokyo, a luxury shopping destination the wealth centre of Asia, Sydney, where a buoyant property market has maintained its value, and Paris, a haven for culture, entertainment, shopping, and finance that remains a magnet to wealthy property buyers.

“At a global level, the luxury property market is performing well, in what is a challenging environment. Looking ahead, international diversification of real estate will be particularly important, as there can always be local threats due to economic and political factors,” comments Thibault de Saint Vincent, President of Barnes International Realty.

Indeed, Cuba is also highlighted as the top emerging luxury destination for buyers. Beyond the central Alpha Cities, the report notes global capital cities including Lisbon, Portugal; Berlin, Germany; and Tel Aviv, Israel, as emerging hotspots.