{"id":6891,"date":"2022-06-30T11:31:46","date_gmt":"2022-06-30T11:31:46","guid":{"rendered":"https:\/\/www.black-brick.com\/?post_type=market-update&p=6891"},"modified":"2022-06-30T13:29:21","modified_gmt":"2022-06-30T13:29:21","slug":"july-2022","status":"publish","type":"market-update","link":"https:\/\/www.black-brick.com\/insights\/market-update\/july-2022\/","title":{"rendered":"July 2022"},"content":{"rendered":"

<\/a>\"\"<\/p>\n

London’s Market in Holiday Mode<\/h2>\n

Traditionally the summer holidays are a slow time for the capital\u2019s property market, with buyers and sellers more interested in packing suitcases than packing up all their possessions and moving house<\/p>\n

The pandemic changed that traditional summertime lull \u2013 with holidays on the back-burner and the race for space at its peak, the last couple of years bucked the seasonal slowdown trend.<\/p>\n

Quite how this summer\u2019s market will behave remains to be seen.<\/p>\n

Clearly the ongoing chaos at the airports may clip some holidaymakers\u2019 wings. But with buyers keen to complete deals before the start of the school holidays, plus strong pre-bookings for overseas breaks, all the indications are that buyers are getting back into the routine of taking a summer break from endless viewings and the time-consuming administration of buying and selling a property.<\/p>\n

<\/a>\"\"<\/p>\n

Old Money Fuels Superprime London<\/h2>\n

As schools started to break up so news broke that an ultra-high net worth Lebanese buyer had made what will be one of the landmark deals of the year, picking up a five bedroom house in Cadogan Gardens, Knightsbridge, for a cool \u00a319.75m.<\/p>\n

The deal is symbolic. Not only of a revival of buyer interest in prime central London, of which more later, but of the profile of super prime buyers.<\/p>\n

With cryptocurrencies crashing and world stock markets tumbling, so hedge funders, bankers, and tech entrepreneurs are finding themselves a little short on capital to splash on trophy homes.<\/p>\n

Cue the return of what Camilla Dell, managing partner of Black Brick, describes as \u201cold wealth\u201d \u2013 buyers whose finances are tied up in oil and gas, and who are amongst the few beneficiaries of the current cost of living squeeze, as well as those whose income is paid in USD($) who are seeing their spending power increase as the value of GBP (\u00a3) continues to contract on the back of the UK\u2019s falling GDP and contracting economy.<\/p>\n

\u201cIt has reminded me of just before the last financial crash, where people were very nervous about buying into the financial markets, but were very, very happy to invest in bricks and mortar,\u201d said Dell, whose firm has just been named best property adviser in the prestigious Wealth Adviser awards.<\/p>\n

\u201cMissing from the market are private equity and hedge fund buyers, as well as tech buyers, but they have been replaced by old fashioned money.\u201d<\/p>\n

<\/a>\"\"<\/p>\n

Behind Closed Doors<\/h2>\n

The number of homes changing hands without anything so vulgar as an advertisement has hit record highs. According to new research by London property analyst LonRes, almost a quarter (23 per cent) of deals agreed in London this year were carried out off-market, while nationally the figure rose to one in ten.<\/p>\n

\u201cBuyers are increasingly willing to pay a premium for a home before it hits the market, to fend off the competition,\u201d concluded LonRes. \u201cOff-market sellers achieved record prices on the back of buyers looking to secure deals in stock-starved markets.\u201d<\/p>\n

Half of Black Brick\u2019s transactions so far this year were conducted off-market \u2013 a record number, up from 42 per cent in 2021.<\/p>\n

And off-market no longer only applies to the sale of super homes with \u00a320m+ price tags.<\/p>\n

\u201cIt used to be something you only really saw with very high value properties where the owners had confidentiality concerns about the value of their home or its contents,\u201d said Dell. \u201cNow it applies to quite mainstream homes too.\u201d<\/p>\n

The reason why owners have opened their eyes to the benefits of off plan selling is simple: overpriced or blighted properties don\u2019t end up languishing, publicly, on the market for months while the owners cut their price back in search of a buyer. \u201cIt is a free shot at the market,\u201d said Caspar Harvard-Walls, a partner at Black Brick.<\/p>\n

\u201cIf they get the price wrong and it doesn\u2019t sell it doesn\u2019t matter because it is not all over the internet.\u201d<\/p>\n

<\/a>\"\"<\/p>\n

Buyers Beware<\/h2>\n

While off market works well for owners, it is not such great news for house hunters.<\/p>\n

They have to bid for a property without knowing what other buyers would pay for it, as they might if it was listed on the property portals. And they have to find out about it in the first place.<\/p>\n

\u201cThere are lots and lots of estate agents who never, ever advertise,\u201d said Harvard-Walls. \u201cSo you can\u2019t be sure if they are telling you about everything they have got for sale.\u201d<\/p>\n

Dell agrees. \u201cThere has been a massive fragmentation of the estate agent model particularly in London,\u201d she said. \u201cFifteen years ago if we were doing a search for a client it would mean contacting half a dozen agents. Now there are 20 or 30 to talk to because all the senior agents from the big firms have left and set up their own little independent agencies. It is all very convoluted, and time consuming to navigate.\u201d<\/p>\n

<\/a>\"\"<\/p>\n

The Time has come for Prime<\/h2>\n

It has been a rough few years for prime central London, what with tax rises, political and economic uncertainty, Brexit, and the pandemic. But prices \u2013 and sales volumes \u2013 are finally starting to pick up in this most rarefied of markets.<\/p>\n

According to Knight Frank the number of new instructions in May was the sixth-highest figure in a decade, indicating the supply chain is opening up. Meanwhile the number of new prospective buyers registered by the firm, as well as the number of offers accepted, was the third-highest figure in a decade.<\/p>\n

Almost inevitably increased activity is starting to be reflected in price growth.<\/p>\n

Data from London Central Portfolio, the investment expert, found that prices in prime central London today are 1.2 per cent higher than they were in the early days of the pandemic (May 2020), although they are still 7.9% below average prices at the peak of the market in 2015<\/p>\n

\u201cThere has definitely been a resurgence in clients buying central London apartments,\u201d said Dell. \u201cTypically, they are North American, Australian, African, and Middle Eastern buyers, and they are looking for a second home or holiday home, often however with an extra factor like work, business, or education.\u201d<\/p>\n

These buyers have healthy budgets \u2013 circa \u00a32m to \u00a310m \u2013 and what they want is an old school prime central location encircling Hyde Park. \u201cIt has been a really big change,\u201d said Dell. \u201cEighteen months ago this market was like tumbleweed. At least half of our buyers at the moment are looking for prime central London flats. At the start of the pandemic nobody wanted one.\u201d<\/p>\n

<\/a>\"\"<\/p>\n

Half Time Score<\/h2>\n

With 2022 already halfway through it is a good time to take stock of what the next six months have in store for the capital\u2019s property market.<\/p>\n

It is fair to say that the first half has been rather bumpy, with global shocks and economic headwinds.<\/p>\n

And Dell and Harvard-Walls suspect that the market will become increasingly polarised as the year continues.<\/p>\n

\u201cI think that the really super prime end of the market will do really well,\u201d said Harvard-Walls. \u201cThere is a real lack of supply, particularly of flats in portered blocks, and the pound is really weak and that will draw in international buyers.\u201d<\/p>\n

Dell believes the market for family homes in prime suburbs will be equally hot. \u201cThere are so many people who have been looking for a substantial family house since the start of the pandemic, but still haven\u2019t found it,\u201d she said.<\/p>\n

Sub-prime stock \u2013 whether it be in a less than sought after location, or lacking outside space \u2013 will, however, start to flounder.<\/p>\n

\u201cIf it is in some way compromised it will really struggle,\u201d said Dell.<\/p>\n

Rapidly increasing building costs could also play a part in how the 2022 market evolves. The cost of upgrading and extending property has shot up in the past two years. According to
\nresearch by Rated People, for example, the cost of a loft conversion has increased by 25 per cent more in the past two years, while the cost of adding a new bathroom is up 40 per cent.<\/p>\n

\u201cThe cost of work is so ridiculous that people just don\u2019t want to do it,\u201d said Harvard-Walls. \u201cI think people will be willing to pay a premium so that they don\u2019t have to get involved in the crazy, crazy cost of work.\u201d<\/p>\n

<\/a>\"\"<\/a><\/p>\n

Acquisition of the Month: Raymond Road, Wimbledon, SW19 – \u00a32,800,000<\/h2>\n

Our clients had been looking for a detached family house<\/a> in south west London with at least four bedrooms plus off street parking.<\/p>\n

But in an overheated market for family homes this couple, who work long hours and travel frequently, were struggling to find the time to view or negotiate for homes; to their dismay every time they liked the look of a property it was snapped up before they had time to get into gear.<\/p>\n

We took over the legwork of their property search and found a perfectly-located house within walking distance of Wimbledon Broadway and Wimbledon Village which matched up to their wish list and budget.<\/p>\n

The house went to best and final offers and our clients were initially outbid. But when that deal did not proceed Black Brick was able to step in and agree a sale, and at less than the clients\u2019 original offer.<\/p>\n","protected":false},"excerpt":{"rendered":"

Traditionally the summer holidays are a slow time for the capital\u2019s property market, with buyers and sellers more interested in packing suitcases than packing up all their possessions and moving house.<\/p>\n","protected":false},"featured_media":6914,"template":"","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","inline_featured_image":false,"ghostkit_customizer_options":"","ghostkit_custom_css":"","ghostkit_custom_js_head":"","ghostkit_custom_js_foot":"","ghostkit_typography":""},"tags":[],"class_list":["post-6891","market-update","type-market-update","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nJuly 2022 | Property Market Update | Buying Agents | Black Brick<\/title>\n<meta name=\"description\" content=\"Check out our market report for July 2022 featuring industry news, advice and 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