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How Greece’s troubles affect British firms – not all badly

“I don’t think anyone should underestimate the impact that a Greek exit from the euro would have on the European economy – and the knock-on effects on us.”

So said the Chancellor, George Osborne, who called the Greek crisis “one of the biggest external economic risks to the British economy”.

So which companies are feeling the worst of this knock-on effect?

The travel sector is the most obvious example, with Greece a top destination for sun-seekers. Credit Suisse analysts reckon the sun-soaked Mediterranean nation accounts for about 10 per cent – and 15 per cent in the summer – of bookings for the main two tour operators, FTSE 100 operator Tui, the group behind the Thomson and First Choice brands, and Thomas Cook.

They predict recent events in Greece, as well as the shootings in Tunisia, will hit the tour operators over the summer.

They have cut their earnings forecasts for this year by 8 per cent for Thomas Cook and by 3 per cent for Tui on the basis the pair will have to drop prices to attract customers back to Greece. Shares in both firms crashed this week.

Tui’s 40 to 50 Greek hotels make up around 17 per cent of its hotels business. The company’s own guidance says that every 1 per cent change in occupancy in Greece adds €6m (£4.25m) to underlying earnings.

On that basis, a 5 per cent fall in hotel bookings in Greece could cost it €5m.

However, Gert Zonneveld, a top leisure analyst at Panmure Gordon, said that while the travel companies will be hit in the short-term, a “Grexit” could even benefit them further down the line.

“If Greece ends up leaving the euro and reinstates the drachma, it might actually increase demand for trips to Greece, depending on how much the drachma would devalue relative to the euro or sterling,” Mr Zonneveld told The Independent.

“I can’t see how routes to and from Greece would be significantly negatively affected over the medium and longer-term,” he added. Shares in the British Airways owner IAG and rival EasyJet have also suffered on the prospect of fewer bookings to Greece, while Ryanair’s stock has just about held firm.

But Mr Zonneveld estimates that the Irish carrier makes 5 per cent of sales from flights to Greece compared with EasyJet’s 3.5 per cent.

June was the FTSE 100’s worst monthly performance in three years as it tumbled 6.6 per cent, thanks largely to fears over Greece.

The exodus from equities, which often happens during times of uncertainty, means lower volumes of trading for fund supermarkets such as Hargreaves Lansdown, whose shares have fallen 8 per cent over the month.

Dixons Carphone, the UK company behind PC World, Currys andCarphone Warehouse, has a Greek electricals business called Kotsovolos. Shares in the retail giant fell 3 per cent on Monday on fears capital controls imposed by Greece, restricting the amount of cash that can be withdrawn from banks, will prevent consumers buying pricey electrical goods at the chain.

The retail analyst Nick Bubb said: “It’s hard to see their stores doing much business this week, with the banking crisis intensifying.” Meanwhile, analysts at Barclays suggested it could reduce store hours or even close down, depending on demand.

Elsewhere, shares in Marks & Spencer, which has 28 stores in Greece, have fallen from 570p to 545p in a week, while investors in Greece-based but London-listed coke bottling company Coca-Cola HBC have also suffered.

Banking giant HSBC has been “monitoring the developments” in Greece. It has $6bn of Greek assets, around 3.7 per cent of its total net asset value, which is the most among European banks.

“Like all banks, HSBC has been working to prepare for such events and to take the necessary steps to meet relevant requirements,” HSBC said on Monday.

Banknote printer De La Rue has also watched its shares fall, along with lesser-known property investors Dolphin Capital, which has two resorts in Greece.

Vodafone also has a Greek arm. It recently admitted sales had suffered due to the crisis. “In Greece, the steady recovery in revenue trends through the year stalled in Q4 as a result of the worsening macroeconomic conditions,” Vodafone said.

Its sales in Greece fell to £576m last year, making up around 1.4 per cent of the group’s overall revenues. So while the numbers sound big, the relative impact on the mobile giant is small.

Imperial Leather soap maker PZ Cussons has a Greek food business called Minerva, behind the low-cholesterol cheeses and spreads line Benecol. But it also only makes up a small percentage of sales and the group’s shares have been impervious to the Greek debacle as a result.

Car dealer Inchcape enjoyed a return to growth last year from Greece, where it is the distributor of Toyota and Lexus vehicles, owns five retail centres and runs another 42 which are independently owned. The FTSE 250 firm said the Greek market continued its recovery, claiming the overall Greek car market grew 22.5 per cent last year.

Inchcape said: “The Greek market is expected to continue its recovery after six years of decline prior to 2013.” The latest figures on the Greek car market showed car sales jumped 47 per cent in April.

Moving money out of banks and spending it on hard assets such as cars is a classic sign of a country in the midst of a financial meltdown.

People would rather own physical assets than lose control of their earnings or lose them altogether through insolvency – much in the same way investors rush to buy gold in economically or politically unstable times.

It was a similar story last year for Russia, where car registrations soared as the rouble crashed. So Inchcape may well be profiting from the Greeks’ financial distress.

The property buying agency Black Brick, which covers London and the Home Counties, reported an increase in Greek clients looking to invest in London as the economic instability takes hold in their homeland.

Managing partner Camilla Dell said: “Greece’s super-rich have long been a feature of the top end of London’s property market, but the country’s recent woes have seen a different type of buyer arrive from Athens.

“Middle-class Greeks are looking to acquire London property as a hedge against the effects that a return to the drachma would have on pensions and similar investments they hold in Greece.”

London property agencies see ‘sales surge’ after UK election result

David Cameron is not the only big winner in the UK election, the overseas property sector is also set to benefit, with surging sales anticipated by some industry figures.

The Conservative leader is back for another five years as UK Prime Minister with a surprising overall majority, after pre-election polls had put the party neck-and-neck with Labour. Ed Miliband, who resigned as Labour leader today (Friday 8 May) after the result, had proposed a Mansion Tax on London homes worth more than £2million and take away Non-Dom tax status for some wealthy UK residents that limits the tax paid on overseas earnings.

Property professionals say the UK election result will end uncertainty and reignite the markets and boost overseas demand, particularly in London – and independent property buying agency, Black Brick, has already closed multi-million prime central London property details today.

Camilla Dell, Managing Partner of Black Brick, says, “A lot of people have been holding off from making decisions but, overnight, an enormous amount of uncertainty has been removed from the market. “We’ve already had deals exchange this morning and we’re now moving forward with a potential £22 million transaction. We expect this trend to continue as buyers look to move quickly to avoid potential price rises now confidence has returned and we expect conditions to return to a much more fluid, normal market, particularly in the £2m plus bracket where both buyers and sellers will return.”

As well as providing reassurance to potential Prime Central London buyers, the election outcome will have been welcomed by top-end developers. “This morning a lot of Prime London property developers will be breathing a sigh of relief, luxury developers had a great deal at stake.” However, colleague, Partner Caspar Harvard-Walls, sounds a note of caution. “A lot of our clients are dollar-based, so any rally in the pound will impact London’s value. In addition, the Conservatives have promised a referendum on Britain’s EU membership, while we would expect the UK will vote to stay in, the run-up to the referendum would, again, introduce a dose of uncertainty to London’s property market.”

Andrew Langton, Chairman, of Prime London agent, Aylesford International , says it anticipates a surge in sales over the next few days and calls the result “a memorial day in the English property calendar.” “Thank goodness common sense has prevailed and David Cameron has been totally vindicated. It would appear the Conservatives will now have a well-deserved majority to run this country without the confines of a coalition government for the next five years – alleluia! “We anticipate Sterling will strengthen and UK Ltd will continue to grow with increased employment resulting in an economic recovery which has been a leviathan effort on behalf of George Osborne to date.

The London residential market, which has been the target of so much taxation, will now revert back to stability and we predict a massive surge in activity with at least twelve transactions proceeding over the next few days that were holding back pending this result.

Our prediction is stability after a year of instability and indecision. “The envy taxes planned by Labour of a Mansion tax, the rent cap and the tearing up of non-domicile benefits are hopefully in the bin, and the residential property sector can at last breathe a massive sigh of relief after all the hike in stamp duty, the envelope tax and capital gains tax that has been introduced over the last five years. “Singaporean investors should take huge comfort in the Conservative win particularly where they may have invested in residential property and specifically in the buy-to-let sector. “Cameron is committed to a referendum on the EU which many feel has to be reformed particularly on immigration.

We are staunch fans of many EU policies but as with an old car, it may now require a complete overhaul and even a new engine, but it will gradually increase in value following its overhaul and inevitably run more efficiently.”

Robert Bartlett, Group Chief Executive Officer of leading London-based international agency, Chestertons , says the result lifts the spectre of political uncertainty. “Labour and Lib-Dems both backed the introduction of a Mansion Tax on homes worth more than £2million, which would have disproportionally penalised Londoners, especially those with outstanding mortgages or those in retirement who had prudently invested in property as a nest egg. As a result, many people were holding their breath and waiting before making a decision to buy or sell.

“Likewise, Labour’s proposed new laws for the private rented sector would have seen compulsory registration schemes, direct rent controls, fixed-term tenancies and added overheads for private landlords shortening the supply of decent rented homes and ultimately pushing up rents.

“With these proposals off the table, and the spectre of political uncertainty finally lifted, we can now all move on. We are already predicting the next few weeks and months will be very busy indeed. “There are still issues to be addressed in the property sector in London, not least the need to boost housing supply, make the rental market more transparent and accessible, and unlocking opportunities for regeneration through a joined-up approach to planning and infrastructure delivery. We hope the new Government will continue to work with the property sector and consult properly on proposed changes so together we ensure that any new policies will work as they are intended and can help deliver the long-term sustainable growth and sensible innovations that our industry requires.”

Robert Haigh, Chestertons’ Director of Professional Services, adds that the result will boost foreign investment. “I think it is an excellent result for the stability of the market. People can now move forward and look to the future with certainty. “From a London point of view I think it means foreign investment and relocation to the city will now continue unabated due to the fact that the proposed abolition of non-dom status is no longer a threat.”

Mark Pollack, Director, of top London agency, Aston Chase , says the result is a great outcome for the property market across the UK and could see property prices rise by up to 10% in the next year. “The Conservative victory would seem to reflect a delayed reaction from the electorate to the former banking crisis and financial meltdown presided over by Labour. “Needless to say, with the immediate threat of Mansion tax removed and non-domiciles no longer ‘targeted’ this is inevitably going to result in a spike in the market at all price levels and particularly for the prime/super prime markets which have suffered over the last twelve months or so while international buyers sat on their hands awaiting the outcome of the General Election. I anticipate a surge in demand resulting in increased transactions and the potential for further 5-10% capital growth over the next 12 months.”

Mark Homer, from Progressive Property, says, “As business people and landlords I think we should be pleased. I think we now have a good foundation upon which we are able to weave our rich tapestry.”

Martin Bikhit, Managing Director at Central London sales and letting agent, Kay & Co , says, whatever happens in elections, London continues to thrive, although he admits the UK government faces tough choices. “The threat of Mansion tax, removal of non-dom status, three year rent freeze were policies that clearly didn’t resonate with the voters. An over regulated banking sector and increases in taxes for higher earners would have been bad for Britain as business and investors looked for a more favourable environment to do business. Since we first opened our doors, Kay & Co have witnessed seven general elections and watched six prime ministers come and go. We also know that London will continue to thrive. It’s our capital, the home of Monarchy, Government, Law and Finance. Global businesses will continue to be based here. London will continue as a centre of fashion, food, culture and commerce, making it a vibrant place for people to live.

“The Conservatives are a known quantity and a further five years, bringing more of the same is clearly seen as a positive. The voters think so and the money markets appear to agree. There are still tough decisions that could have an impact on business, the main one being an in/out referendum on membership of the EU. Not having free trade with our European neighbours is unthinkable and there will still be jitters over the threat this could cause.”

Simon Barnes, of London-based Simon Barnes Property Consultants , says the result has released a bottleneck for buyers and sellers. “Now this bottleneck will be released and for the next few months we are likely to see a growth in sales and increased prices before the market settles down to steady growth, hopefully for several years. “Biting the hand that feeds you has never been a good idea. Over the last nine months, the threat of further taxing rich investors and property owners risked cutting off a huge supply chain in London.

Regeneration projects, new building and associated infrastructure all require the confidence of businesses, investors and developers.

The election outcome will provide that confidence, ensuring that London continues to thrive and grow.” Founder and CEO of eMoov.co.uk, Russell Quirk, says the result will lift prime sales. “Those at the top end of the UK property market will be breathing a sigh of relief having avoided a hefty, Labour lead, Mansion Tax.”

Alex Newall, Managing Director, of London and UK agent, Hanover Private Office adds, “Britain is open for business and this is good news for the property market. The Conservatives are safeguarding the UK economy and the impact on the property market will be significantly positive. “At the higher end of the property market all those house buyers both UK and international, who have held off investing in the UK pending the result of the election will be returning to the market. Uncertainty over taxation has cleared. “International interest in the UK as a safe place to invest, will continue. London has always been a great place to live, and the sign is firmly above our door – Britain is open for business and open for a stable and growing property market.”

Focus on Clerkenwell: Prices soar on the City’s edge.

While the Square Mile is London’s historical home of trade and finance, Clerkenwell on its northern edge is clearly the design equivalent. Since the Industrial Revolution, the area has housed craft workshops, printers, clockmakers and jewellers.

The area is celebrating its rich design heritage this month with the sixth annual Clerkenwell Design Week from 19 to 21 May. Today also sees the end of Made in Clerkenwell, an event which saw 100 artists descend on two Victorian studios to show off their handmade crafts. The brutalist architecture of the Barbican Arts Centre Festivals aside, the area remains a popular place to live for architects, graphic designers and artists, which could be down to the abundance of studio space and industrial warehouses – a trait it shares with its eastern neighbour Shoreditch.

Another similarity is the fact it gentrified around the same time in the mid-90s and has held on to its creative businesses. “Thanks to its wealth of advertising agencies, publicists and recording studios, Clerkenwell still attracts the creative crowd,” says Alex Taniewski-Elliott, manager at estate agent Fyfe McDade. “They now rub shoulders with the new wave of City workers wanting to live and play in a vibrant area with soul, character and the added benefit of being able to walk to work.”

Developers and landlords have also been zoning in on the area in the past five years. This is due to a number of factors; house price value rises around the City fringes; upcoming projects like the rejuvenation of Smithfield Market, Exmouth Market and Barts Square near London Wall; and the arrival of Crossrail at nearby Farringdon, which will be the only station with access to Thameslink, London Underground and the new high-speed east to west train service when it’s completed in 2018.

Property search agency Sourcing Property also pinpoints the area as “especially popular with our buy-to-let investor clients” as it’s constantly in demand with renters, too. “The investment properties we’ve bought have all let extremely well and quickly,” says managing director, Jo Eccles, “typically to finance, tech or media tenants, with an average gross rental yield of around 3.6 per cent.”

Current prices range between £1,000 psq ft to £1,400 psq ft, according to Jamie Burnhope, a buying consultant at Black Brick, but he foresees this number rocketing skywards in the next five to ten years. “With all the new developments in Clerkenwell,” he says, “I see no reason why prices could not catch up with those in Soho.” FIVE REASONS TO MOVE TO THE AREA There’s loads of great architecture. From high-ceilinged loft living to listed Victorian period houses, there are plenty of unique homes

Young professionals eye London’s tough neighbourhoods

The dangerous streets where a serial killer stalked his prey, a neighborhood synonymous with race rioting and an obscure working-class suburb. As potential hot spots for London’s young hipsters, these neighborhoods might seem unlikely choices. But soaring house prices are forcing Generation Y to look to areas their parents would almost certainly have bypassed.

The latest research by real-estate firm Savills, based on U.K. census data from 2011, has pinpointed 20 areas where wealthy professionals under 35 are most likely to live, and where they outnumber baby boomers by a 3-to-1 ratio.

“Even the most affluent under-35s have been priced out of traditional locations,” explained Lucian Cook, director of residential research at Savills and author of the study. “They are having to pioneer new areas.”

The No. 1 spot is Whitechapel, the East London neighborhood where Jack the Ripper killed at least five women in 1888. Bombed heavily during World War II and rebuilt with sprawling concrete high-rise buildings in the 1960s and ’70s, it isn’t immediately recognizable as the kind of neighborhood where hipsters hang out. “It is a bit of a compromise,” acknowledged Jamie Burnhope, a consultant at buying agency Black Brick. “Anyone who is used to pretty streets might have their hearts in their mouths walking around all this rather aggressive architecture.”

But what it lacks in aesthetics, it makes up for in location and value. The average property price in the area is £465,514, or about $690,000, which by Central London standards is an absolute steal. The average price in Kensington and Chelsea, the heartland of prime Central London, is currently more than $1.94 million, according to the Land Registry, the U.K.’s official home-price monitor.

Oliver Knight, an executive in the residential research department of Knight Frank, says value isn’t the only attraction: Although the area is peppered with postwar projects, it also contains some lovely homes. “The area benefits from existing high-quality property stock, including Georgian terraces as well as period commercial buildings—some of which have already lent themselves to conversion into large-scale, open-plan residential buildings not dissimilar to Tribeca in New York,” he said.

One such terraced property, a 1,287-square-foot 119-square-meter three-bedroom townhouse that’s been modernized with an open-plan kitchen and living room, is on the market for £1.1 million, or about $1.6 million.

Beyond East London, which accounts for 12 of the top 20 neighborhoods in the Savills study, the most popular address is Brixton in south London.

Brixton is a classic example of how London neighborhoods are in constant flux. It was a middle class area before World War II, but in the postwar era its fortunes waned. Projects were built and largely populated by Afro-Caribbean immigrants who suffered from high rates of unemployment. In 1981, tensions over police “stop and search” practices erupted into bloody riots. The neighborhood was hit by riots again in 1985 and 1995.

Despite this, by the end of the 1990s, middle-class buyers were starting to discover Brixton’s Victorian townhouses and excellent public-transport links. Jimmy Carr, sales manager at Kinleigh Folkard & Hayward estate agents, estimates that a four-bedroom house would today be priced at over $1.5 million. A recently refurbished three-bedroom row house with a private garden near Brixton Hill is being offered for around $1.3 million.

“It is a trendy place to live,” Mr. Carr said, adding that his buyers tend to be 30-somethings working in media or advertising. “But there are still areas which are slightly intimidating, which gives it a little bit of edginess.”

While most popular hipster locations are gritty, urban neighborhoods with a vibrant night life, Earlsfield is a notable exception. Seven miles southwest of the city center, the neighborhood has more cafes than nightclubs. But its selling points include its green space, good schools and affordable family homes.

“Earlsfield has come on leaps and bounds in the last five years,” said Jonathan Mount, a partner at the Buying Solution who liked the area so much that he moved there himself last year. “People who would once have aspired to middle-class southwest London neighborhoods like Clapham and Wimbledon have been priced out, and there has been a classic ripple effect.”

That ripple has changed the feel of the once working-class area—its thrift stores now replaced by delis and bars—and buyers now pay around $1.3 million for a three- to four-bedroom townhouse. One recently redone 1,417-square-foot period home in the area with a small studio in the back garden is asking around $1.8 million.

While Generation Y’s parents would likely have felt that a home in Earlsfield—or Brixton or Whitechapel—was a comedown, financial constraints have made them attractive. Over the past three or four decades, British home prices have risen at a far stronger rate than wages, and mortgage lending is now dependent on hefty down payments—around 25% is the norm—that few young buyers can afford.

There is, of course, another reason why Generation Y is plowing a new property furrow. “It is not just a financial issue,” said Savills’ Mr. Cook. “They probably don’t even want to live in areas their parents would like.”

An Elegant Townhouse in a Revived Corner of London

London — A gracious five-bedroom Victorian townhouse in a part of southwest London once associated with a faded shabbiness has benefited from the area’s considerable gentrification in recent years.

The four-story home, which has been in the same family for 50 years, is in Earls Court, where its spotless white stucco reflects the neighborhood’s growing prosperity: The 2,443-square-foot home is on the market with Farrar & Co., a London real estate agency, for 3.5 million pounds, or about $5.4 million.

On the lower ground floor, a somewhat dated kitchen looks out on a south-facing garden and opens to a family room, which leads up to a formal dining room at street level. One flight up, the drawing room is elegant and spacious, with a welcoming fireplace. The bedrooms and two bathrooms are on the top two floors.

There is rare, highly prized off-street parking for two cars in front of the house, marked by an original Victorian lamp post.

Located on a side street to the east of Earls Court Road, the house is in one of Earls Court’s many streets and squares that are now “great places to live,” said Roarie Scarisbrick, an agent with Property Vision, an independent agency based in London that works with buyers.

But it wasn’t always like this. As recently as 10 years ago, said Caspar Harvard-Walls, a partner at Black Brick, an agency and consulting firm in London, there was “a real divide between property prices in the Earls Court postcode of SW5 and the South Kensington postcode of SW7,” one of the most well-heeled neighborhoods in the capital.

Back then, Earls Court was still dominated by grungy bedsits, peeling homes and cheap hotels frequented by backpackers. Some areas west of the busy main road are still a bit grubby. However, in the east, where Lady Diana Spencer lived before she married and became Diana, Princess of Wales, the changes are more apparent.

“It’s Earls Court in name and postcode but much more South Kensington in appearance and price,” said Mr. Scarisbrick. “This is where most of the uplift has been seen.”

Mr. Scarisbrick estimates that prices have risen by about 25 percent to 30 percent in the last three years alone, and range from £1,500 to £2,000 per square foot. This kind of increase is spreading west to the former bedsit heartlands.

Local agents are also selling a delightful 715-square-foot studio with a terrace, 14-foot ceilings and a bank of tall French doors in Earls Court Square, west of the main road, for £1.15 million, or £1,608 per square foot. “We are seeing higher asking prices there as a result of the ongoing redevelopment,” Tom Kain, senior consultant with Black Brick, said by email, referring to a long-term project on the site of the former Earls Court Exhibition Center, which has been torn down to make way for new homes and a commercial district.

The first phase in the project is Lillie Square, a five-minute walk from Earls Court Square, where 808 one- to three-bedroom apartments, penthouses and four- and five-bedroom townhouses are being released for purchase in staged payments as the project is being built. Prices start at £1.57 million. Lillie Square, which is to be completed in 2016, will have a concierge service, residents club, spa, gym and swimming pool.

Plans call for 7,500 new homes to be built in the next 15 years, amid 30 acres that will encompass landscaped gardens and a park, as well as a new shopping thoroughfare. A range of cultural and leisure amenities, many of which are now lacking, will also be introduced.

“The new development will provide the retail focus the area desperately needs,” Mr. Harvard-Walls said.

INTERVIEW: Camilla Dell on why buying without an agent is like going to court without a lawyer

Outspoken and consistently outperforming, Camilla Dell is founder and MD of one of London’s most successful acquisition agencies, Black Brick. Here in conversation with PrimeResi, she discusses everything from driving a hard bargain to difficult toy dogs…

You worked at both Foxtons and Knight Frank during the 2000s; how did this prepare you for the world of acquisitions?

For me, working at Foxtons was like the University of Estate Agency and London Property Market. Whilst lots of people like to say negative things about Foxtons, I can honestly say I would not be where I am today had I not started my career there. It taught me discipline, how to be a great sales person, and, most importantly, it sowed the seed for Black Brick. I did not work at Knight Frank for very long and I was based in their buying department. I went there to really test drive my business plan for Black Brick, and, within eight months, I left to set up my firm and have never looked back. Knight Frank are a great firm, but I strongly believe that buying agencies should not be part of estate agents – independence is key. 

What were the biggest challenges you encountered whilst starting up your own business?

It’s tough to be taken seriously when you are a small company, work from home, and there are only two of you. Luckily that did not last for very long, because within six months, my team had doubled in size and within two years, I moved from my home office to an office in Mayfair which really put Black Brick on the map. 

What was your first deal as a buying agent?

My first deal was for a client who has since become a dear friend and has concluded over eight transactions with me in the last 10 years. He was looking for a penthouse flat in St John’s Wood and loves cars – he owns at least five high value sports cars so off street parking was really important. He needed at least five spaces, and I managed to not only find him his dream penthouse, but also one that came with five secure parking spaces – no mean feat! 

What’s the toughest search brief you’ve ever been given?

Every search we take on is unique and has it challenges. If finding a property were easy, people wouldn’t come to us for help. I think the toughest search we had was for a couple who had no children, but they did have a small Chiuahua dog. Therefore, they wanted to buy a flat with secure outside space for the dog (balconies were deemed too dangerous in case the dog fell through the bars!) and in a building with a porter. The combination of these two factors made the search challenging as many buildings with porters don’t allow pets and most forms of outside space were not suitable for small dogs. We eventually identified a stunning apartment with high ceilings and a porter with secure outside space which even led out onto private communal gardens. It took us over 12 months to find it, but our clients were thrilled with the end result. 

Your team now includes five buying consultants; what makes a great buying specialist in your opinion?

The best buying consultants are those that totally understand how to be a good consultant. At the end of the day, our job isn’t to sell a property to a client in the way that an estate agent would do, our job is to guide and advise our clients and make sure they don’t make a mistake. This can often take time. Patience is key, as is the ability to build rapport and trust with clients. Finally, fierce negotiation skills, a relentless approach to finding the right property, and expertise in the market are also crucial skills. 

How important is it for you to remain independent? What advantages does this give your clients?

Independence is hugely important; buying agents that are owned by estate agents are hugely conflicted. I know this first hand as I used to work for one. Clients always found it odd that on the one hand we were saying we were acting for the buyer, but on the other hand we were owned by an estate agency. Not being independent also makes it incredibly difficult to get access to off market properties. Most estate agents are reluctant to freely share sensitive off market instructions to buying agents who are owned by estate agencies for fear that they may lose the instruction. With us, there is no conflict. We don’t sell properties and we never will. 

How do you foresee the demand for acquisition firms developing in the UK over the next five years? Is the market now saturated?

I think the market has become flooded with one/two man band buying agents who often work from home, and do a handful of deals a year. There is nothing wrong with this, but for clients looking to engage a professional buying agent, then there are actually very few companies to choose from. I can count my competitors on one hand in terms of professional firms with a salaried team and proper offices. I think the demand for buying agents will continue over the next five years – the fact is, most buyers find the process time consuming, difficult and frustrating. The market also isn’t very transparent. I often draw the analogy that a buyer without a buying agent is like going to court without a lawyer; the traditional way of buying is actually a very unfair process when you think about it. The seller has their estate agent working for them and it’s in their best interests to sell their property for the highest price, but the buyer has no one. We even up that process and I think it’s a service that more and more buyers are turning to, not just wealthy foreigners. 

In the last eight years, your firm has acquired over £200 million worth of residential property for African buyers; where do you think will be your biggest source of clients over the next few years?

Emerging market countries will continue to be big buyers of UK property – they value everything the UK offers compared to their own high risk countries. Other countries to watch are Angola and Brazil – there are huge amounts of money flowing out of these countries. Political uncertainty also drives buyers to the UK. 

One of the key benefits of employing a buying agent is having a professional negotiate on your behalf; what are your top tips for securing a good deal?

Know your market, understand pricing, and collate relevant comparable sales data to assess whether a property is expensive or not. Finding out who the vendor is and why they are selling also help, there is no point negotiating hard with a vendor who isn’t really motivated to sell in the first place. 

In your experience, what percentage of London’s prime property stock is only available off-market?

This is very difficult to assess because the true meaning of the phrase “off market” often gets misinterpreted. For example, a property may not be openly advertised, but there is an estate agent involved – does this therefore make it off market? On average around 25% of the deals we do for our clients are either totally off market, or there is an estate agent involved but no marketing information on the property. 

How do you maintain such a regular supply of HNW clients? 

Over 30% of our clients come to us through a previous client recommendation. Clients are also recommended to us via other professional intermediaries such as law firms, accountancy firms and banks. 

Which schemes/developers were you most impressed by in 2014? Is there one in particular you are tipping for great things in 2015?

We tend to favour smaller, more boutique developments with fewer than 100 units. We bought two apartments last year in a development on Hanover Street which only had a total of six units. We also really like Native Land and their Old Burlington Street development. 2015 will be an interesting year for London’s higher end developers as there are so many new schemes under development and due for launch in a very tricky market. 

How many clients does Black Brick have on the books at the moment?

40. 

What advice would you have for someone thinking about starting a career in acquisitions?

Too often I meet candidates with no property experience who want to become buying agents. My advice has always been to learn about the market first, and the best way to do this is to work for one of the big estate agencies. There are no short cuts to this job. 

What was the firm’s biggest deal of 2014? 

£50 million.

Were there any interesting trends you’ve noticed amongst your buyers over recent years?

Our recent analysis looked at over 200 property purchases in Prime Central London since 2007.

In looking at transaction trends, it’s not surprising to note that the fewest transactions were during the height of the financial crisis in 2008, however, this was short-lived as Black Brick more than doubled the number of property purchases it made the following year.

Interestingly, budgets for investors (who make up 40% of all purchases) were on average, just over £2m in 2007, this fell to £1.31m in 2009, and reached just over £1.4m in 2014. Meanwhile, although average owner occupier budgets rose from £1.33m in 2007 to £2.92m in 2014, they’ve fallen from 2013’s peak of £4.66m.

The data also highlighted the fact the services of buying agents are not just for wealthy overseas buyers; UK purchasers form the third highest percentage of our buying clients.

The property market in London is time consuming, frustrating and difficult to navigate even for local buyers, hence the growing number of UK buyers within our client base. Our British clients tend to be busy executives from the financial services sector, who may have previously been looking for some time on their own, but have become increasingly disillusioned with not being able to find the right property, getting gazumped or having access to off market opportunities. Interestingly, 88% of our UK client base have been owner occupiers, buying a home rather than an investment, and the most popular postcodes have been SW1, SW3 and SW10 – mainly Chelsea and Belgravia with 70% of our UK buyers purchasing in these postcodes, dispelling the myth that prime Central London is purely dominated by international buyers.

What are you predicting for the London sales market in 2015? Is there going to be an optimum window for buyers, and if so, when?

2015 is likely to be a year of two very clearly defined halves split by the general election. Should the Conservative party win the May 2015 election, we expect an extremely active London property market and the opportunity to drive a hard bargain with vendors will be significantly reduced if not lost all together.

We believe the period between now and the general election may prove an attractive entry point to PCL property over the long-term, especially if prices are driven down by the changes in stamp duty.

Meanwhile, given the extent to which Labour’s proposed policy Mansion Tax policy has already been watered down, we do not expect a Labour victory to have a dramatic impact on London house prices – though some short-term weakness in prices is likely. For owners in the £2m to £3m price band, the Labour Party has outlined the cost of the Mansion Tax at £3,000 a year. We do not believe this is significant enough to precipitate any widespread selling should the Mansion Tax become law.

Our experience with previous tax changes affecting prime Central London property is that it is the uncertainty that buyers don’t like more than the imposition of the charge itself. In the recent cases of the higher Stamp Duty above £2m and the imposition of Capital Gains Tax for foreign owners of UK property the market paused while waiting for the precise details before regathering momentum.

What are your clients saying about the UK property market in general right now? Are any particular concerns holding them back from buying?

Some are showing slight hesitation about when to buy due to the looming general election, but most view the next six months as an opportunity. The recent dollar strengthening against the pound is also giving our dollar based clients an effective 11% discount off the price of UK property at the moment. 

Where would you like to see Black Brick in five years’ time? 

We are already one of London’s leading independent buying agencies, and I would like to see us expand into other parts of the UK. Buyers purchasing in other parts of the UK also need assistance and often university cities make great investments, so it would be interesting to develop the service outside of just Central London and the Home Counties. We are also expanding our Property Management and Vacant Care side of the business and in five years’ time I would love to see this side of the business make up 50% of Black Brick’s revenues.

Where would you personally spend a budget of £10m right now?

I would spread this across several properties, all sub £2 million and some sub £1 million, which is where I think the biggest growth will be over the next few years.

Short-term jitters in London real estate after tax changes

The changes in London’s property taxes – both the recent stamp duty reforms and a new capital gains tax for foreigners – may give investors from Singapore pause for thought before buying in the property safe haven.

But some believe that growing jitters leading up to the UK general elections next May could be the best opportunity for Asian buyers to drive a harder bargain, taking advantage of the slower market and a general feeling of caution.

The real estate market is already experiencing disruption and uncertainty, but this is likely a short-term transition period and, ultimately, will have a “very, very small impact” on buying, as the fundamental attractiveness of London real estate remains, analysts say.

The main downside is that the taxation of UK-held property has become more complex, so “international investors unfamiliar with UK tax rules will inevitably incur greater costs associated with compliance, or they risk failing to comply with rules through ignorance,” says Mark Pollack, director of property agency Aston Chase.

Camilla Dell, managing partner of Black Brick Property, a buying agency, however, says: “We love nervous markets as it gives us the ability to negotiate more strongly on our clients’ behalf.”

Our view is that the next five months present perfect buying conditions for buyers that are willing to take the plunge,” she said. “They could be rewarded handsomely, as the longer-term forecasts over the next five years are for 20-25 per cent growth across central London.”

The market has had about a year now to adjust to a capital gains tax that will be levied on non-UK residents when they sell a UK property that they are not staying in, starting April 2015.

Many see it as a long overdue closure to a “tax loophole”, given that UK residents have always had to pay capital gains tax on their second homes, but foreigners were exempted from any. “Most of our overseas clients have always thought it a bit odd . . . Most investors expect to pay some tax when they make a gain in another country,” says Ms Dell.

There is no doubt many international property investors have been attracted to the absence of such a tax and exploited that. But even with the tax in place next year, it remains cheaper than other hot-favourite jurisdictions for property investors.

At 28 per cent of capital gains, it remains lower than equivalent taxes in New York, Paris and Australiawhich can approach 35-50 per cent, depending on various factors.

Adam Challis, JLL head of residential research in London, says what is perhaps more damaging is the uncertainty surrounding valuations. The tax will only be levied on gains made from April 2015 and not on any previous gains, but he asks how all of these properties are going to be valued at the same time.

“What we don’t know is how they will be valued and measured, who will be responsible for the cost of managing a current valuation, and some of the impact on specific types of ownership,” he said.

“Details for investors are very important for transparency. And there are a number of details that we believe the government still needs to work out and have not done. The lack of clarity around some of these issues is why we are having short-term uncertainty,” Mr Challis added.

For now, values in most parts of central London remain strong and are expected to grow 5-6 per cent over the medium term, but he has seen the jitters quell property transaction volumes, especially at the top end of the market.

That uncertainty is also partly driven by the ambiguous and widely criticised mansion tax which the Labour Party had proposed to be imposed annually on homes valued at more than £2 million (S$4.1 million) – provided, of course, that it wins the general elections next May.

But the Conservative Party, led by Prime Minister David Cameron, had in early December announced and effected its own version of the mansion tax – in the chancellor’s words: ” . . . in stark contrast to the shambles of the anti-aspirational, unworkable homes tax that the Labour party wants to impose.”

Basically, the old “slab system” where stamp duties are charged at a single rate on the whole purchase price of a home has been abolished and given way to a fairer, graduated system where each rate will only apply to the part of a property price which falls in that band, like income tax.

For purchases of £937,000 and below, buyers will enjoy savings in stamp duty under the reformed system. This is good news for Asian buyers, most of whom don’t buy above £1 million, analysts say.

“Buyers from Asia tend to go for properties in the range of £500,000-900,000, for which there will be a modest lowering of transaction costs. As a result, the expectation is a modest boost for mainstream activity,” JLL’s Mr Challis says.

Asians make up between a third to 40 per cent of property investors in the UK by various estimates. But that percentage dwindles as one approaches the higher end of the market, which is crowded with buyers from Europe, the Middle East and Russia.

The reformed stamp duty rises incrementally to as much as 12 per cent for the portion above £1.5 million, which means a £2 million property will incur £154,000 stamp duty, compared with £100,000 before. Analysts thus expect the prime market to be badly hit, although Black Brick’s Ms Dell points out “that buyer profile group is quite frankly able to absorb the slightly higher taxes”.

In comparison, Hong Kong’s stamp duty reaches 8.5 per cent at the top end of the market, while Singapore’s hits 15 per cent for foreigners, and 7 per cent and 10 per cent respectively for citizens and permanent residents buying a second home.

Analysts think the prime central London residential market will stall until these luxury homes are re-priced to take into account the higher stamp duty. Mr Pollack says: “It’s inevitable that this will cause many deals to fall through and for aggressive and desperate re-negotiations to happen.”

Meanwhile, there is no guarantee that the Labour Party will drop the idea of a mansion tax over and above the stamp duty changes if it wins, even though an add-on tax now seems senseless and unnecessary.

If it does, Aston Chase’s Mr Pollack says, it would result in “a huge backlash from both the domestic and investor markets” and would shave 30 per cent off existing capital values.

It is amid this uncertainty that the high-end market now functions, but therein lies the opportunity for Asian buyers who have been mulling and hesitating about accessing the London property market.

“If buyers sit and wait until after May 2015, they may be disappointed. If you look back historically everytime we have had a general election in the UK, once the election has happened, the market bounces back. So if the Conservatives win, we believe the market will very quickly return to normal, with no threat of a mansion tax, and the opportunity will have been lost,” Ms Dell says.

 

Rich Nigerians Spend Millions on London Property – but where?

Wealthy Nigerians spent over $390 million on property in London over the last 3 years according to new research. They are the biggest spenders out of the whole Africa – who, as a continent, spent over $938 million.

“The most expensive property we’ve ever sold to a Nigerian is actually a transaction we’re in the middle of working on at the moment,” says Camilla Dell, from Black Brick Property Solutions. “It’s a property in the region of £50million (or $78million).”

While buyers from Africa account for only 1.5% of transactions in the “ultra-prime” London property market, they make up 5% of sales by value – which is up from 2%. And this is by spending between £15million and £25million on each home. “I would like to buy in Mayfair,” says one Nigerian lady. “But unfortunately, I cannot afford to live there.”

The most sought after areas for Nigerians, in particular, in London are around Knightsbridge, Mayfair and Belgravia. Buyers include Africa’s richest man – Aliko Dangote, a Nigerian businessman who has an estimated fortune of £16billion.

And the world’s richest woman – Folorunsho Alakija, is an oil tycoon, fashion designer and philanthropist based in Lagos, but is also a big investor in the London. She recently bought four apartments in One Hyde Park, the super-exclusive development in Knightsbridge. They’re running banks, oil and gas companies, telecomms companies and over the last ten or fifteen years have made a lot of money,” explains Camilla Dell.

But many Nigerians are suspicious of such large amounts of money being spent on such lavish property, outside of Nigeria. “You have to ask – where do they get the money from? Was it stolen money, because if you steal money from government or wherever – you want to live big,” says one man.

“Those places are for big, even bigger girls!” laughs one lady who cannot afford such property in London.

House prices in high-end London slashed after stamp duty shift

Wealthy homeowners will be forced to slash house prices in central London following the Government’s sweeping stamp duty reform, experts have warned.

Vendors with property worth more than £1m are preparing to reduce their asking price to attract buyers who will be hit with a heftier tax bill following the Autumn Statement.

Mr Osborne reduced the burden of stamp duty on buyers in the mainstream housing market when he switched the old slab system to a new graduated one, ridding the market of huge jumps in transaction tax.

However, the top end of the market is now paying substantially more in stamp duty. “It is in London’s £3m to £10m price band where the changes will have the biggest impact, here the market will almost come to a halt,” said Gary Hersham, high end estate agent and managing director of Beauchamp Estates.

In order to shift their property some of these vendors will need to reduce their prices, he explained. Buyer, Camilla Dell, from the agency Black Brick, has forecast a 10pc drop in prices in the £2m plus market.

“While we accept that stamp duty is a one-off purchase tax that the majority of high-end property buyers can comfortably afford to pay, these latest changes are likely to have a pronounced impact on market conditions in the coming months,” she said.

Other property professionals have voiced their concerns that should Labour win the general election, Ed Miliband will bring in mansion tax on top of the new stamp duty regime.

“It really will be a case of killing the golden goose. Politicians simply don’t understand the amount of money that comes into the UK from wealthy foreigners buying property in London and the south east,” said Hugo Thistlethwayte, managing director of buying agency Prime Purchase.

“Meddling with further taxes will sabotage that and affect all the builders, decorators and others who benefit through property changing hands. It makes the whole thing unsustainable and these buyers will go elsewhere.’

The forecast fire sale follows a stampede of wealthy buyers trying to push through their transactions before the early hours of yesterday morning to avoid the additional tax hit.

The new progressive system came into force at midnight on Wednesday, unless a buyer had already exchanged, at which point the individual can choose which system to sell under.

African buyers lead prime central London property purchases

It’s not wealthy Russians of Middle Eastern buyers who have bought the most prime central London property over the last few years, but Africans, says the Black Brick agency

Wealthy African property buyers are the largest buyers of prime property in central London, according to new research.Independent property buying agency, Black Brick says Africans are involved in getting on for half of prime central London property sales since January 2007.

In total, Black Brick has represented 35 different nationalities, with Africans forming the highest percentage of buyers at 43.7%, followed by Middle Eastern buyers at 17.1% and Asian and UK buyers tied in third at 10%.

Camilla Dell, Founder and Managing Partner of Black Brick, tells OPP Connect, “Although the perception is that the majority of Prime Central London’s overseas buyers are Russian or Middle Eastern, Africans have always had a big affinity with the UK and London.

“Over the last eight years, we have successfully acquired £236 million of residential property for African buyers from Nigeria, Kenya, Zambia, South Africa and Uganda.” Nigerians have been particularly active in looking for secure developments, Ms Dell says. “Like a lot of our owner / occupier international clients, many wealthy Nigerians were educated in the UK and send their children to school here.

“Typically, Nigerians like gated, secure developments, as this is what they are used to back home, where most houses and apartments are located within secure compounds. Even though London is of course, much safer than Nigeria, they still prefer to be in secure developments, preferably with a 24hour concierge or porter.”

One of their favourite locations for new-build developments is Imperial Wharf, which known as ‘mini Lagos’ but many High Net Worth Nigerian clients prefer to explore new areas, but still retain privacy. “We have recently acquired high value properties in areas such as Belgravia and the SW3 part of Chelsea – 39% of our Nigerian clients have bought in either SW3, SW10 or SW1, closely followed by 35% buying in North West London postcodes such as NW8, NW6 and N2. In addition, 58% of our Nigerian clients have been purchasing homes in London with the remaining 42% buying for investment.”

There are signs that London is set to attract more investors from Angola. “In terms of future ‘ones to watch’ there is vast quantities of wealth being generated from Angola,” says Ms Dell. “Typically, Angolans have tended to buy in Portugal due to the fact the language is the same. However, we predict that it will only be a matter of time before Angolans start to diversity and look to London property. As markets mature and clients look for other ways to spread and diversify their wealth, London eventually ends up on their radar.”

The majority (68%) of Black Brick’s Asian clients are Malaysian, followed by 25% from Singapore and 6% from Hong Kong. Overall, half of Asian clients are investors and half buy homes, but Singaporean and Hong Kong clients still just to investment property.

Malaysians’ favourite postcodes are W8 and W14 (Kensington) and W2 (Bayswater), which attract two-thirds of buyers. Kensington, appeals because it is within walking distance of Kensington High Street and it is where Malaysian’s tend to have the highest budgets. W2 Bayswater has a high concentration of Malaysian restaurants and is near Paddington for the Heathrow Express.

Camilla Dell explains, “New developments such as The Lancaster’s opposite Hyde Park have been popular with Malaysian clients who like the security and facilities offered by these type of new luxury new build developments.

“Contrary to popular belief, Malaysians don’t just buy new build either, with the majority of our clients buying into red brick mansion blocks and period houses. “By contrast, all of our Singaporean and Hong Kong clients have been investors, buying in prime postcodes in SW3 Chelsea, SW7 South Kensington and W8 Kensington.”

Middle East buyers, whose numbers have been rising since 2007, are from Egypt, the United Arab Emirates, Saudi Arabia, Jordan, Kuwait and Lebanon and most are looking for safe investments. Most (38%) are from the UAE, with Saudi buyers at 19% and Egyptian buyers, who have the largest average budgets at £5.175million, making up 15%.

More than three-quarters (77%) are owner occupiers, and just 23% investors. The most popular postcodes for Middle Eastern buyers are SW1 and SW3, prime Knightsbridge and Chelsea addresses, followed by W2 Bayswater and Hyde Park and W1 Mayfair.

“Various events such as the “Arab Spring” and continuous political uncertainty and turmoil in this region of the world has led to many Middle Eastern buyers looking for a safe place to invest, and London is top of their agenda,” says Ms Dell.

“In the UAE, the buying reasons are different, with many of our clients having had their fingers burnt in the past with their own local property market booming and then busting. As such, they are looking to diversify and invest in more established and stable property markets such as London so it’s not surprising that the most popular postcodes are the renowned Chelsea and Knightsbridge addresses.

“We were one of the first buying agents to acquire an apartment in One Hyde Park back in 2007 when it was entirely off plan on behalf of an Egyptian client. It looked extremely expensive at the time, setting new records in terms of price per square foot, but actually, our client has made over £1 million in profit since acquiring the property as prices have risen significantly.

“The main driver behind the purchase was that our client wanted a safe and secure home in London. The fact that it has been a good investment has been an added bonus.”

Budgets for Black Brick investors (who make up 40% of all purchases) were on average, just over £2million in 2007, this fell to £1.31million in 2009, and is just over £1.4million in 2014. But average owner occupier budgets have fallen from  £4.66million in 2013 to £2.92million in 2014.

“It’s not surprising that our prime central London property investment clients have chosen to stay under the £2million threshold, we have always advised them to diversify and buy several smaller units rather than invest a large sum into one property as it is too high risk and there are fewer tenants for large family homes compared to one and two bedroom flats.

“We are also seeing a trend for investors to stay below £2 million to stay out of the higher stamp duty bracket and possible mansion tax which may come in next year. However, over time, some of our investment clients have tended towards buying entire freehold residential blocks for between £5million and £20million, which can also make savvy purchases as this allows complete control over the way a building is run and managed as well as flexibility on future exit strategies – for example, sell some, retain some, rent some units.

* Meanwhile, South African investors are keen to buy German property, according to analysts and fund managers of listed property.

There is the fear that interest rates will rise markedly in South Africa next year, while Germany has record low interest rates with relatively high yields.

Kagiso Asset Management investment analyst Justin Floor says, “We believe there is a compelling case to be made for investing in German residential property, which looks set to benefit from extremely strong fundamentals,” the BDLive website reports.

“A combination of powerful forces is set to substantially increase demand for residential units in the future.” An increasingly ageing population  and falling replacement ratios means that Germany’s population faces potential decline, but that is being offset by net immigration and associated urbanisation, resulting in rising demand for residential property, he says.

Welcome to London’s Nappy Valley

On Saturday mornings Northcote Road in southwest London is abuzz. Market stalls sell artisanal bread and specialty olives to adorable nuclear families, while yoga-toned mothers with caramel highlights drink no-fat cappuccinos in the many local cafes.

Welcome to London’s original “nappy valley”—the most renowned of an elite group of London neighborhoods considered so ideal for families that buyers are prepared to pay a premium of around 20% to live there.

The nickname nappy valley is a play on Happy Valley, the enclave in pre-independence Kenya known for the hedonistic lifestyles of its wealthy expatriate community. The appeal of today’s nappy valley is far more wholesome: green space, great schools, good looks, and a very specific atmosphere.

Northcote Road is at the heart of an area locally known as “between the commons,” referring to the public open spaces of Wandsworth and Clapham Commons. Nearly 400 acres of green space—about half the size of New York’s Central Park—are dotted with play areas and tennis courts. The neighborhood also has highly rated schools, plenty of cute boutiques and high-end cafes. It also has grand period homes with spacious backyards that affluent London families aspire to. Little wonder that celebrity chef Gordon Ramsay and his wife, Tana, have chosen to bring up their brood in the area.

“Between the commons is the most child-friendly area of London,” says Ed Tryon, of Lichfields Buying Agency. “There are two excellent state primary schools; there are also a number of child-friendly restaurants and cafes that serve marmite on toast and fairy cakes for children. There are also endless summer fetes and fairs in the summer, largely aimed at younger parents and kids.”

On a more prosaic note, trains from nearby Clapham Junction offer fast links to central London, 4 miles away, as at least one parent in a nappy valley family tends to have a high-powered job in finance or tech to pay for their child’s play dates and baby Mandarin classes.

A typical four-bedroom property between the commons would cost around $1.866 million, according to Ed Mead, executive director of Douglas & Gordon. An identical house a few minutes’ walk away would be worth around 20% less.

Between the commons was the first area to earn the nappy valley title—but it does have its rivals. Chiswick, about 7 miles west of central London, also touts top schools, cafe culture and green space. The actor Colin Firth and his wife, Livia, live there with their young children, and locals believe it has a more country-village atmosphere than the sophisticated—some might say flashier—vibe of between the commons.

Real-estate agent Rachel Thompson, a partner at the Buying Solution, explains why Chiswick is catnip for parents: Not only will their children enjoy a great lifestyle, but so will they. “There are some fantastic restaurants in Chiswick,” she said. “La Trompette is Michelin starred, and Sam’s, which is backed by restaurateur/chef Rick Stein. ” There is also an outpost of the Soho House empire of private members’ clubs and restaurants for the well connected, named High Road House.

John Horton, a director of Horton and Garton estate agents, said most of his Chiswick clients are in banking and finance, their spending power evidenced by the high-end baby strollers and designer Wellington boots worn for muddy walks in Chiswick Park.

Demand for nappy valley life has put a premium on homes in Chiswick. A typical terraced Victorian house would sell for around $1.947 million, said Mr. Horton. That same property transplanted to just outside the area would be around 20% cheaper.

Historically, most nappy valley neighborhoods have tended to be in south and west London, perhaps thanks to the drift of young families out of unaffordable prime central London. But a subtly different style of nappy valley is developing farther afield, to the east of the city, around Victoria Park, an oasis of almost 200 acres of green space.

Buying agent Caspar Harvard-Walls, of Black Brick, said Victoria Park Village is beloved by slightly edgier parents who want to combine the hipster vibe of east London with the upscale amenities for their children. Victoria Park has the classic nappy valley street full of cafes, restaurants and pubs, and the schools in the area are considered among the best in London. Yet it is also popular with artists, and its streets are slightly less perfectly manicured than those between the commons or in Chiswick.

Simon Randal, senior sales negotiator at Currell Residential, said the area’s popularity with families is also due to its strong community. “This is not a transient area; people tend not to want to leave,” he said.

A typical four-bedroom terraced house in Victoria Park would cost around $2.272 million. Mr. Randal estimated that just outside the area exactly the same property would be worth $1.866 million—a difference of just under 20%. It is worth pointing out, though, that if the same house was in prime central London it could easily be worth $16 million or more.

Many of Mr. Randal’s buyers are abandoning more expensive areas like Notting Hill—not only because of its high prices. They also complain that increased gentrification has left many prime central neighborhoods feeling a bit sterile. “Victoria Park is like Notting Hill was 25 years ago,” he explained.

His clients are uniformly well-paid professionals, although they often work in creative sectors like media and advertising. “They want something a bit more bohemian than stiff upper lip west London,” he explained. “It is a paradox really—they like the fact that east London is a bit more down to earth; it is like they want to appear a bit less well off than they actually are.”

Top end property in London now more of a buyer’s market

The demand for London property has meant that it has been deemed a sellers’ market in recent years, however, this is changing for property priced £2 million and above, a new analysis suggests.

With significantly more stock on the market the city’s prime market is becoming more of a buyers’ market, according to independent property buying agency Black Brick.

Camilla Dell, managing partner of Black Brick, pointed out that there are currently 1,968 properties on the market priced at £2 million and above in central London, whereas throughout the whole of 2013 some 1,657 properties in this price bracket sold. And just four years ago that figure was significantly less at 1,096.

‘As such, it has started to become more of a buyers’ market for the first time in a long time, particularly in the super prime upper end of the market at £10 million and above. Indeed, we’re currently in the midst of a search for a client looking for a house in Mayfair/Belgravia from £20 million up to £100 million and there are well over 20 houses for sale in this price range. This is more than usual which shows the higher end of the market is slowing and buyers have more choice and bargaining power,’ she explained.

She also pointed out that in the current political situation in Ukraine if there are sanctions against Russia which mean that certain Russians might be exiled from the UK, this could create even more supply on the super prime end.

‘Many high end developers are now struggling to find buyers for their trophy mansions, and are having to become more realistic with their asking prices. As such, I believe we could see significant price drops at the super prime end of the market. Indeed, one house in Mayfair has already had a significant price reduction from £120 million down to £95 million,’ said Dell.

‘We advise buyers looking above £10 million to take their time and take advantage of the current market. Good deals can be had when there is an air of nervousness in the market and it is at times like these where we push hard to negotiate the best deals for our clients,’ she added.

Although the looming general election is a concern for both sellers and buyers, the significant rises in London property prices are also causing some buyers across all price ranges to hesitate and question whether it is the right time to purchase, according to Dell.

‘In our experience it is impossible to time a market. All of our clients who have decided to wait have inevitably ended up regretting it.  The advice we give clients very much depends on their reason for buying,’ she said.

‘Generally, for those looking to buy a home, it’s much more about actually finding the right property, which can take time, than it is about price and getting a bargain, and we remind clients that even if the market does drop 5% or more next year, in the context of the entire time they are likely to own the property, short terms fluctuations usually bear little impact at the end of a 10 year hold period, for example,’ she explained.

‘For those looking to invest, it makes sense to only buy if the right deal can be found and this can be in any market, rising or falling. If you get the right combination of a good property that can be bought at pricing that makes sense, then it is worth going for. Again, buying an investment property in London shouldn’t be short term. We make sure that clients have a realistic view of how long they will need to hold onto to the property before selling it and making a meaningful return,’ she concluded.

House prices fall in parts of London for first time in two years, report says

House prices are falling in parts of London for the first time in two years as the capital’s “sealed bid frenzy” comes to an abrupt halt, a report says today.

Tougher mortgage rules, fears of an interest rate rise and a jump in the value of the pound – making London more expensive for foreign buyers – have all combined to take the steam out of the market.Across London as a whole, prices did not rise at all in July and fell “in localised markets where demand has cooled the most”, according to property data firm Hometrack.

The biggest falls have been for larger properties in W and SW postcodes in central London, according to Hometrack’s director of research, Richard Donnell. He said buyers were being far more cautious after a long run of post-recession price rises that reached a peak earlier this year. He said: “The housing market runs in cycles and it has been such a strong upward trend everyone is now thinking, ‘it can’t keep heading for the stratosphere. Do I want to get into a sealed bid situation and pay 15 per cent more than I was planning to?’”

The slowdown in central London has been exacerbated by a “glut” of properties on the market priced at more than £2 million. Hometrack said prices are rising in just 12 per cent of London postcodes, compared with 86 per cent as recently as February.

The average time a property has been on the market has lengthened from 3.4 to 4.3 weeks since May, while average sale price as a percentage of asking price has fallen from 99.2 per cent to 97.5 per cent. The slowdown in central London has been exacerbated by a glut of properties on the market at more than £2 million.

Property buying agency Black Brick said there are currently 1,968 properties with “For Sale” boards priced at £2million and above, more with the 1,657 properties sold in that bracket in the whole of 2013.

Managing partner Camilla Dell said: “It has started to become more of a buyers’ market for the first time in a long time, particularly in the super prime upper end of the market – £10 million and above. “Indeed, we’re currently in the midst of a search for a client looking for a house in Mayfair or Belgravia from £20 million up to £100 million and there are well over 20 houses for sale in this price range. If there are sanctions against Russia which mean that certain Russians might be exiled from the UK, this could create even more supply on the super prime end.

“Many high end developers are now struggling to find buyers for their trophy mansions, and are having to become more realistic with their asking prices.  As such, I believe we could see significant price drops at the super prime end of the market.  Indeed, one house in Mayfair has already had a significant price reduction from £120 million down to £95 million.”

Up on the Roof

Derek Cunnington gazed out over the low-slung London skyline from atop an eight-story apartment building and liked what he saw.

“When you’re up here, you can see lots of opportunities,” said Mr. Cunnington, owner of U.K. property developer Dekra Developments.

The flat roof of Grove End Gardens, which overlooks the crosswalk on the Beatles’ famous Abbey Road album cover, is a construction site. In 18 months, Dekra will have built six luxury penthouses on top of the 1935 brick building.

Some developers are taking a novel approach to finding new building sites in crowded central London, where period homes are prized: They are adding penthouses on top of existing buildings.

London faces a housing crisis defined by the lack of centrally located homes. Its growing population requires 42,000 new homes built each year for the next 20 years, according to the office of Mayor Boris Johnson. Demand pushed the average London house price up 13.2% in January compared with the same month in 2012, the U.K.’s national statistics agency said. The housing boom is making rooftop construction more feasible.

Overseas buyers are willing to pay a premium for these newly built penthouse properties, which are rare in London, said Camilla Dell, managing partner at Black Brick, a real-estate buying agency for which foreign buyers account for 60% of the business. These buyers prefer to have modern conveniences, such as underground parking, gyms and high-tech security, Ms. Dell said.

The New Look of London

Dekra has built about 20 penthouses in London in the past seven years. The Abbey Road development, from planning to finished product, will be nearly four years in the making and cost up to $50 million.

When complete, the building will feature underground parking, elevators that bypass nonpenthouse residents, branded fixtures and iPad-controlled utilities. When buyers arrive for their first night in their new home, they will find a refrigerator and pantry stocked with food from their homeland.

About 20% to 30% of the Dekra project will be completed in a factory, Mr. Cunnington said. This modular building style means major structural aspects of the building are prefabricated, including the steel frame.

After construction in the factory, this exoskeleton will be broken into parts and trucked to the site. A giant industrial elevator will lift the pieces to the top of the building.

Dekra doesn’t use cranes. The firm uses a special machine to knock down brickwork on the roof, as opposed to a jackhammer. There is no scaffolding. This style of work costs more, and takes more time, but is meant to be out of sight, with nuisances kept to a minimum, Mr. Cunnington said.

The developer will also make overall improvements to the building, which he says will benefit existing residents. New elevators will be installed, reception areas will be renovated and a parking garage will be built under the back garden, which will be upgraded.

So far, existing residents of Grove End Gardens haven’t voiced major complaints. “I really didn’t want to trust him. He’s a developer, after all,” said David Burr, who chairs the building’s residents association. “But he has been true to his word.”

Dekra has finished two other penthouses in St. John’s Wood. They include a three-bedroom with a wraparound balcony built on an eight-story property—sold to a British buyer for $20 million—and a two-bedroom finished last year on a seven-story building that is now listed for $4.3 million.

First Penthouse, another London developer building new penthouses on existing properties, takes a different approach to construction. The company finishes 90% of the penthouse in a factory before loading it on the back of a truck, and lifting it to a rooftop with a crane, says Hakan Olsson, the company’s owner. First Penthouse is set to finish a project in the trendy Shoreditch neighborhood at the end of April. After that, a bigger penthouse is scheduled to be built near the Thames in the Royal Borough of Kensington and Chelsea, to be listed at more than $6.6 million.

Aside from costs and engineering, rooftop projects are limited by planning permissions. In the City of Westminster—where St. John’s Wood is located—about 80% of buildings fall within a conservation area, meaning “they generally won’t get penthouses built on them,” said Rosemarie MacQueen, strategic director for the built environment at Westminster. Planning laws protect access to sunlight in homes, as well as privacy from new windows peering into older ones, known as overlooking.

Another hurdle: Some buyers might be turned off by the melding of old and new construction. Ms. Dell at Black Brick said the first things potential buyers see when they go to view a penthouse is the older building under it. “Yes, people will pay premium for new-builds. Yes, they’ll pay premium for a penthouse. But because the penthouse is new doesn’t mean they’ll like the rest being old,” Ms. Dell said.

 

Super Tanks

Bespoke aquaria may have the wow factor, but they can be as high maintenance as their celebrity owners, by Zoe Dare Hall

Thierry Henry wanted a four-storey one that would require a complete rebuild of his London home (a project that’s still on hold), fellow footballer Stephen Ireland commissioned one with an in-built computer and Fijian reef, while other celebrities – the late Alexander McQueen was one – favour those that double up as headboards for their beds.

Bespoke, super-sized aquaria are becoming a popular feature in the homes of the rich and famous and some will pay up to £1m for one that is truly unique, such as the 18-metre long “shark tank” requested by one Knightsbridge-based client of Aquarium Architecture, a specialist in such matters.

“Fish tanks famously have a therapeutic quality. They are also an emotional investment, rather like fine wine, with a direct correlation between fish rarity and value”, says Adrian Black, director of YOUHome estate agency.

But for Roland Horne, Aquarium Architecture’s co-founder whose clients include sports stars (cricketer Kevin Pietersen has just commissioned one “with sea horses and a real wow factor” for his latest venture, a children’s hairdressers), Emirati royal families and the former NYC mayor Michael Bloomberg, having a huge, exotic aquarium in your living room is all about “power and control”, says Horne. “There’s partly the luxury travel association – a lot of people have been diving in the Maldives or own a home there and want to recreate the feel. But I think a lot of the psychology of aquaria stems from a fascination for growing and controlling something from scratch. It’s a very male thing – although Russian women also seem to like them too.”

In the US, big is best – and if it hugs the bed or frames a few TV screens, even better. “The Americans like fake plastic corals and big predatory fish. They can look impressive, but the fish don’t look very happy,” says Horne. In Dubai, designer Daniel Kostuic of Intarya designed a jellyfish aquarium that wrapped around an awkwardly-placed pillar. Europeans, on the other hand, prefer a more authentic aquascape, “replicating what is found out there in the wild and generally set more discreetly against a wall,” says Horne.

Saltwater aquaria have traditionally been most popular, “as everyone wants a few ‘Nemo’ fish, which means having saltwater coral,” says Horne, whose clients typically spend £80,000-£100,000 on an aquarium. But the Japanese art of “iwagumi”,, which focuses on artistically-cut stones and plants, rather than the fish, has persuaded more people to look at the freshwater option – which cost about half the price to install and maintain.

While pretty to look at, a home aquarium – especially of the scale and exoticness that wealthy buyers are demanding – requires constant attention, with some specialist designers offering 24-hour maintenance services and the average big tank needing about three visits a week at £100 a pop. And while the tank itself may be beautiful, the mechanics behind it, including huge tanks of water, cables and pumps, are a less desirable addition to the interior design.

Done well, an aquarium can look like a stylish addition to a home. The upmarket home-builders Octagon, for example, have installed a few super-sized aquaria in their custom-built properties recently, including one set within a specially-commissioned tinted mirror. Done badly, though, and “it can all look a bit James Bond,” says Alec Watt, CEO of Accouter Design, who mentions one client who wanted an underfloor aquarium populated by small sharks.

Having a one-off aquarium won’t add value to your home, according to David Adams, MD of John Taylor London, but it will spark buyers’ interest and look pretty in your sales brochure. Be aware that its presence can also deter prospective buyers, though, if it visibly requires a lot of maintenance and your property is likely to be a little-used second home.

“I saw one example in Belgrave Square where the floor had been reinforced to contain one of the most extravagant aquaria ever seen. The owner had staff who checked on the property every few weeks and got it ready for his returns from international travels. Each time, he had to restock the aquaria at huge expense as all the fish had died,” says Ed Tryon from Lichfields buying agency, who adds that while these fancy fish tanks are increasing in popularity, “they certainly polarise buyers”.

“Avoid them. Modern art is a much better alternative,” advises Camilla Dell from Black Brick buying agency. But a large clutch of fish-loving celebrities, including the Beckhams and Madonna, and top-end developers such as Candy & Candy and Finchatton would disagree.