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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.

Home Smart Home

Car stacking systems or fingerprint recognition technology? A fizzy water tap or underfloor heating? High-techery is the future for luxury homes, but what buyers value most is security and practicality by Zoe Dare Hall

Even on Surrey’s Wentworth Estate, where exquisite mansions routinely sell for several million (only for their insides to be ripped out and re-designed), Waterford House stands out for the lengths its owners have gone to with their in-house technology.

This showcase of electronic wizardry starts with the electric entrance gates whose keyless entry pads are programmed with different codes for each person (a handy way to keep an eye on when staff start and finish) to huge rooms where every mood is controlled by Lutron electronic panels. Beside the master bed are touch screens that run the bath – from the ceiling.

“Buyers have the perception that houses should be loaded with these kinds of intelligent systems – though if you are selling a place like this, you don’t necessarily need all the gadgets, just the wiring so the buyer can bolt on whatever they want,” says Rupert Wyatt from Barton Wyatt, which is marketing Waterford House for £4.25m.

There is no doubt that high-techery is the future for luxury homes: taps that dispense not just boiling or chilled but also fizzy water, kaleidoscopic systems that play music and films from anywhere in the house (or, indeed, your second or third homes) and car stacking systems that enable you to park multiple vehicles in one space.

This week, Samsung has announced its new push into the realm of home technology so smart it could be a paid-up member of Mensa. That means touchscreen washing machines that can assess how dirty your washing is – and then tell you on your iPhone when it’s clean – and gadgets that “understand our needs and put us in control”, according to Samsung’s chief executive BK Yoon.

But how much high-tech is desirable and when does it simply become daunting? Its purpose is to make life easier. But while the next generation, who are weaned on iPads, will feel at home in a place that runs entirely on touchscreen technology, however smart and successful today’s buyers are, there are many who simply can’t get to grips with a home that has fingerprint recognition screens instead of any visible switches, knobs or buttons to push.

“As technology becomes more intuitive, the fear of it is lessening,” says Peter Mackie from Property Vision buying agency. “Fingerprint recognition technology has only been used in a handful of properties at the very top end and is generally only used as a point of differentiation to highlight the enhanced specification.”

Separate handsets and media system controls have become outdated; now everything can be managed through one iPad. In the “Smart App-artment”, a showcase home in central London designed by technology company Cornflake, there are Lutron automated blinds which memorise, and imitate, your usage pattern to deter burglars when you’re away.

“The gadget all buyers love at the moment is glass which at the press of a button becomes opaque for privacy,” says David Adams, MD of John Taylor London, who has had to provide his own retina scans and fingerprints to gain access to some of the properties he is marketing. One such seven-storey house, South End in Kensington on sale for £13.75m, has a swimming pool that converts into a dance floor, a car lift and his and hers panic rooms.

But what buyers want more than anything from their fancy technology is security and practicality. That means electronic gates and cameras, secure parking (including one instance of a suede-lined garage to prevent scratches when opening the car door, says Camilla Dell from Black Brick buying agency) and underfloor heating. “Radiators take up too much wall space and prevent the owner from hanging art,” says Dell.

And more important than any gadget, she says, are the fundamentals – the overall quality of the property, materials, fixtures and fittings. Jo Eccles from Sourcing Property agrees. “Buyers should be looking at the property’s location and potential, not focusing on the technology, which can date quickly,” she says. “A stellar concierge service will trump luxury gadgets every time.”

Black Brick closes in on £0.5bn milestone

It’s not easy to find out just how much business the UK’s top buying agencies are doing these days. Estimates vary wildly – and there’s no shortage of bluster – so it’s interesting when one of the big players tots up its figures over the last few years.

Seven years after launching from a loft in North London, Camilla Dell’s Black Brick claims to be closing in on a whopping £500m-worth of property acquired for its clients to date, racing to nearly £100m-worth in this financial year alone.

In all, there’s been nearly 200 deals made by the team since 2007, with 71% of the client base buying as owner-occupiers and the rest as investors; 75% are based overseas.

The firm did £30m-worth of transactions as a two-man start-up in year one, and appeared to defy the slowdown by increasing this figure by a pretty remarkable 60% to £74m in 2008 (a year best forgotten for many others).

The now nine-strong firm is planning to go big on property management in 2014 and will soon be introducing commercial property services to run alongside its established resi offering. Other revenue streams include a property concierge and a “Vacant Care Service”, which looks after their clients’ properties when they’re away.

Prophet & Loss: The difficult business of property market forecasting

Why did so many commentators and analysts get it wrong this year? Perhaps we still don’t fully understand the strength of the forces behind the price growth we’ve been witnessing, says Camilla Dell

Around this time of year, we are often asked for our forecasts for the next twelve months. Our view on forecasts is that they are interesting to discuss, but like the weather and stock market forecasts, they are often as inaccurate as they are accurate.

One agency was honest enough to admit in its 2014 forecast document that commentators and analysts have continually under-forecasted house price growth over the past 15-20 years. This was certainly true during the boom years of the late-1990s and early-to-mid-2000s, but it has also been the case during the bounce-back following the credit crisis.

While this is not a scientific reason to believe our “positive” forecasts, it does suggest that we still do not fully understand the strength of the forces behind the price growth we have been witnessing.

If it is possible to generalise about prime central London property, we believe that the sub-£2m frenzy will continue in 2014. We expect competition for properties priced below £1m to be particularly heated. A lot of the competition is down to the changing tax environment as it has become increasingly more expensive for buyers above £2m, either paying 7% stamp duty if buying in their own name, or 15% if buying in a company name.

Many of our investment clients are choosing to stay below the £2m level as a result, but interestingly, we are also starting to see evidence from our owner-occupier client base staying below the £2m level for fear of a future mansion tax.

However, our view is that Central London is not a homogeneous market. Prices on a per square foot basis can deviate significantly from area to area, from street to street in the same area, and from house to house in the same street, depending on a whole range of factors. This is precisely why we believe it’s so important to be guided by specialist advice, because if you don’t know the market in-depth as a buyer, or are unaware of specific factors affecting particular areas and streets, then understanding what price represents good value becomes very difficult.

Set out in the table below are the forecasts of the major agencies for Central London house price growth in 2014. When we produced the same table last year, Hamptons, Savills, Knight Frank and Jones Lang LaSalle all predicted zero price growth for 2013. However, barring a sharp collapse in prices in December, the PCL market is set to deliver high single digit price growth for 2013, and at the time of writing has risen every month in the year-to-date.

2014 Forecasts for House Prices in Central London and the UK

	Central London	UK
Hamptons	6.0%	n/a
Savills	3.0%	6.5%
Knight Frank	4.0%	7.0%
Jones Lang LaSalle	8.0%	5.0%
Cluttons	4.0%	n/a
Strutt & Parker	3.5%	4.4%
Chesterton Humberts	10.1%	8.2%

Meanwhile, we predict a fairly flat year for rents in central London in 2014. Help to Buy will inevitably take some renters out of the market and with more choice for tenants than ever before; the power is clearly with potential tenants. The top end of the rental market (properties priced at £1,000 per week upwards) may see some pick-up in demand. We are already seeing an increase in demand from our own client base, in particular from French clients looking to spend more time in the UK to escape the high tax environment back in France.

Uncertainty surrounding a possible future mansion tax may also drive more owner-occupiers looking to buy homes at the £2m-plus level to rent before buying and adopt a “wait and see” approach, waiting for the outcome of the next general election in 2015.

London’s Rich Tap New Breed of Broker in Hunt for Homes

Louise Beale interviews Camilla Dell for Bloomberg News, reporting on the use of buying agents to secure homes in the central London residential property market, where demand outstrips supply.