Super-prime London’s cut-price property deals

The haggling is in full swing: with a near record number of unsold new homes and the wealthiest reconsidering their options, estate agents are sweaty palmed, but savvy buyers are scoring hefty discounts.

By Beatrice Hodgkin and Hugo Cox.

Earlier this year, a client of buying agent Camilla Dell offered £3mn less than the c£20mn asking price for a home in a prestigious central London development completed in 2020. As the months wore on, the seller returned to Dell twice with revised prices above what she had offered. Each time, Dell’s client refused. Finally, a few days after the October Budget, the seller accepted the original bid.

“The public line is that new homes never sell with a price cut, but now that’s just nonsense,” says Dell, founder of Black Brick. “It’s a measure of how much power buyers have: in nearly 20 years the only market as good for buyers as this one was the few months following the financial crisis [of 2008].”

In super-prime central London, beloved playground of the world’s richest entrepreneurs, aristocrats, financiers and oligarchs, the haggling is in full swing — even for homes in new developments — as trophy-home sellers across Mayfair, Kensington, Belgravia, Knightsbridge and Chelsea drop their prices to achieve a deal.

In part, it’s because the buyer pool is diminished. Non-doms, considering where to buy their next home, are seeing less reason to pick London now their tax perks will be removed under measures set out by the new Labour government. Added to this, borrowing costs are high; an inflationary October Budget suggests they will remain so. And, in friction to the nationwide home shortage, unsold new homes in central London are close to record levels, as transactions stall.

In the three months to September, 102 homes sold for £5mn or more in London, down from 155 one year earlier, according to Savills, which predicts prices will fall next year.

Dell lists other recent deals she has struck for clients this year: nearly £3.5mn off a £13.5mn Knightsbridge town house and £475,000 off a £2.35mn Chelsea apartment; £1mn off a £4.75mn mews house near Sloane Square.

Never hasty to call a market downturn, selling agents for the upper tier of the sector are nonetheless steeling themselves.

“The probability of our market improving in the next six to 18 months is very slim,” says Jake Russell, head of sales at Russell Simpson, a central London estate agent that has sold 55 homes for more than £5mn since March. “Sellers are becoming acutely aware of that.”

A year ago, he listed a home for “just under £20mn”. By April, when it had received 40 to 50 viewings but no offers, he arranged a meeting with the sellers. Russell advised they drop the price by 15 per cent. They agreed; several prospective buyers who had viewed the home previously made offers; within a few days it had sold.  Russell’s clients — downsizers — are now renting. They plan to buy but are in no rush, anticipating lower prices if they wait.

Thinking like this further depletes the buyer pool, increasing the leverage for those who are willing to transact now.  The longer we were [looking] the more homes came on the market; later in the year prices made more sense.

I was in no rush and I felt more and more powerful ‘Annabel’, a recent first-time buyer of a house in St John’s Wood Annabel is in her early thirties and recently bought her first home. Over the course of 2023, she felt her bargaining position strengthen as the number of suitable properties grew and their prices fell.

“The longer we were [looking] the more [homes] seemed to come on the market; later in the year [asking] prices made more sense. I was in no rush and I felt more and more powerful,” says Annabel, who declined to give her real name.  She saw a dozen homes, had offers accepted on two — each time, 10 per cent below the list price — but pulled out of both purchases because of surveys or delays from sellers.

Finally, more than a month after viewing it, she offered £375,000 less than the £2.45mn asking price for a house in St John’s Wood. The seller accepted immediately.

On a recent November evening in Sautter of Mount Street, Mayfair’s celebrated cigar store, talk is of a changing mood. The rarefied smog (Sautter enjoys an exemption from the UK’s smoking ban) envelops a mostly male, international crowd, including a high-end tailor and a cigar shop owner from Hong Kong, both in their early thirties, a plump fiftysomething man with a thick Midwest American accent and 29-year old Charles Jerbus, originally from France. At Sautter of Mount Street, one cigar-smoking customer laments ‘my social circle is leaving’; his own parents relocated from their Belgravia town house to Zurich last year.

Between puffs on a short fat cigar, Jerbus explains how the tax changes and new Labour government are reshaping his social set. His parents, who arrived in London from Dubai in 2020, relocated from their Belgravia town house to Zurich last year when his mother, who “saw the [tax] changes coming”, took a new job there. “My social circle is leaving, it really accelerated after the election,” he says. Those departing include some of the leading classic car dealers, Jerbus’s profession, despite London’s prominent role in the sector. This year, 9,500 of those with £1mn or more of investable wealth are projected to leave the UK, double the number who left last year and six times the 1,600 who left in 2022, according to London-based Henley and Partners, which advises wealthy individuals on their residency choices. Only in China are they leaving faster.

One of this UK number, a Brit by birth, now a non-dom and working in private equity, who is currently in the process of securing himself and his wife passports for another country, sold his £24mn central London home shortly before the Budget.

Paul Welch arranged the man’s mortgage to buy the home two years ago, through his London-based company Million Plus Private Finance. “Once upon a time, a client like this would keep hold of their home, refinancing as a buy-to-let,” Welch says. “Today, with mortgage rates so high they are much more likely to sell.”

Last year he arranged 22 London home mortgages for more than £5mn; in 2022 the number was 14. So far this year, he has arranged three.  9,500 Those with £1mn or more of investable wealth projected to leave the UK this year; in 2022, the number was 1,600 (Henley and Partners) Some non-doms leaving the UK will keep their homes to retain a London base, according to Lucian Cook, head of residential research at Savills.

“But many who had been planning to move to London — as non-doms — and buy a home will now decide not to, so demand for [high value] homes will fall.”

Non-doms are not Welch’s only clients looking to sell their London homes. One, an elderly woman who owns a £5.5mn town house with a £2mn mortgage, has been renting it out for more than a decade. Last month she put the home up for sale.

“The rent no longer covers the cost of the mortgage. When she can get more than 5 per cent on the [proceeds of the sale] in the bank, selling is a no-brainer,” says Welch.

In the six weeks to the end of November, the best mortgage deal Welch could find for clients wishing to borrow £10mn at 60 per cent loan-to-value (LTV) increased from a rate of 3.68 per cent to 4.19 per cent.  Several factors suggest high rates could continue. First, the Budget was judged to be inflationary by both the Office for Budget Responsibility and the Bank of England. Second, “Trump’s presidential victory signals looser US fiscal policy, meaning tighter monetary policy [to control inflation] increasing pressure on the BoE to follow suit,” says Andrew Goodwin, chief UK economist at Oxford Economics.

Three weeks after the Budget, prices in swaps markets implied a fall in the UK base rate to 4.1 per cent by the end of next year — half a percentage point higher than the pre-Budget forecast of 3.6 per cent. Slower than expected falls in interest rates signal borrowing costs are likely to stay higher for longer, reducing buyer budgets and willingness to borrow.

But sellers, mindful of the forces holding buyers back, may see a clearer case for cutting prices to lure them into a deal.  Standing proud on Whitehall is the Old War Office, centre of operations during the second world war, and later the backdrop for the 1956 Suez crisis and the 1960s Profumo scandal — then, in September 2023, reborn as 85 upscale residences managed by Raffles Hotel.

Today, it is one of 15 completed high-end developments in central London with homes still for sale — including 60 Curzon in Mayfair, The Broadway on the Westminster site that once housed New Scotland Yard, and Belgravia’s Peninsula Residences.

Apartments in One Kensington Gardens have been selling since 2015. Central London’s total unsold new homes have averaged 411 over the past five years, more than double the 192 of the preceding five years, according to Molior, which specialises in London new-build data (this counts developments larger than 20 units — more than 90 per cent of new homes, it estimates).

There may be few developments in the pipeline — since 2014 stamp duty increases curbed demand for prime central London homes, developers have avoided starting new projects — but even at last year’s sales levels, the current rump of unsold homes would take roughly 18 months to clear. And, with average sale prices since the start of last year at £3,538 per sq ft, according to Molior, that would be no mean feat.

“Last year, unsold homes were at their highest since we started collecting data in 2009,” says Sam Long, senior research analyst at Molior. “There is an imbalance between supply and demand.” Those who are in a position to buy are taking full advantage of their strong bargaining position. Many are from the US, where the authorities tax citizens’ worldwide income wherever they are based.

“Non-dom regime or no — it doesn’t make any difference,” says Welch, who highlights that the buyer of the £24mn Mayfair home was an American entrepreneur.

“While there has been no tsunami of fleeing Democrats arriving since the election, I have plenty of US customers on my books who are looking to buy,” says Roarie Scarisbrick of Property Vision, a London-based buying agent.

In Knightsbridge, buying agent Camilla Dell says she negotiated £3.5mn off the £13.5mn asking price of a town house for a Middle Eastern buyer.

In Kensington, Chelsea, Holland Park and Notting Hill, British, Europeans and Americans dominate — typically families whose primary home and workplace is London and who plan to be here for the long term, says Russell. Cook adds that this group of “necessity” buyers will form an increasing share of transactions in the coming years.

Other buyers from abroad emerged from the October Budget feeling friskier than non-doms. The buyer whom Dell helped negotiate £3.5mn off the £13.5mn Knightsbridge town house is from the Middle East, and will use the home only for holidays.

“They won’t spend enough time there to be judged a non-dom,” she says. Several others of her clients are buying for children who plan to make London their home. Neither group will be fazed by the 2 per cent stamp duty increase on second homes, she adds.

The same is true of many of Russell’s buyers, he says, looking down the list of £5mn-plus homes his agency has sold since March in Mayfair, Belgravia and Knightsbridge. “Indian, Greek, Swiss, Lebanese, Chinese, Turkish, Nigerian, French, Portuguese . . . ”

‘It feels as busy as this time last year, for sure,’ says one visitor at the illumination of New Bond Street’s Christmas lights.

In May, a company controlled by Natasha Poonawalla, an executive director at the Serum Institute of India, the vaccine manufacturer owned by the Poonawalla family, spent £42mn on a building in Mayfair’s celebrated Grosvenor Square.

This is not the only recent purchase by Poonawalla, who could lose the tax benefits provided by the non-dom regime when it ends.

Last December, she and her husband Adar, who leads the family business (but who spends too little time in London to be covered by non-dom rules), spent about £138mn on a 25,000 sq ft home near Hyde Park, London’s second most expensive home sale ever.

At roughly £5,520 per sq ft, the home near Hyde Park hardly qualifies as a bargain. By contrast, the Poonawallas paid c£1,560 per sq ft for the Grosvenor Square building (it had not had a full-time tenant for several years and was marketed for commercial use).

A 10-minute walk to the east of Sautter cigar shop, the gathering for the illumination of New Bond Street’s Christmas lights seems to signal bright prospects for London’s premium home market. Beside a pop-up bar, four carol singers belt out an arrangement of “O Little Town of Bethlehem”.

This being New Bond Street, the bar is a converted 1934 Rolls-Royce coupé whose customers sip champagne behind velvet ropes. The carol singers, who sound like they belong in the opera, are impeccably dressed in black tie. “It feels as busy as this time last year, for sure,” says the woman who chaperones them, a clipboard clutched against her plush winter coat.

Outside the store of Chanel, the sponsor of this year’s lights, a large crowd gathers to listen to representatives of a local business association lauding a bumper Christmas season for local retailers. The street is rammed.

Scarisbrick is unsurprised; he reckons the most affluent are staying put, and holding on to their central London homes.

“Yes, some [wealthy residents] are considering their options, and having an exploratory [relocation] tour of Milan or Dubai,” he says.

“But what they’re not saying is: ‘holy shit, I have to get rid of my house’.”

This is why your home won’t sell

Estate agents and property experts tell the brutal truth about the ten things they know will sabotage a sale – and the nine that their buyers now demand

By Graham Norwood

The housing market is hotting up with prices and sales set to head north in the coming months, according to the respected Royal Institution of Chartered Surveyors.

Online agency Yopa says there are 84,000 more homes listed for sale in the UK today than at the time of last month’s Budget – an increase of 11.4 per cent.

This means sellers need to emphasise what makes their home extra-attractive to would-be purchasers – and not let buyer turn-offs get in the way of a deal.

We’ve spoken to estate agents and property experts to reveal the most sought-after home features – and the ones to avoid at all costs.

What buyers hate

Bonkers house names

‘Buyers dislike inappropriate names,’ explains Jason Corbett of Rowallan Buying Agents. ‘They’ll be bitterly disappointed if they expect a decent-sized family home called “Manor House” but it’s actually just a small cottage.’

Dr Lynn Robson of Oxford University, a house title expert, says names like The Barn often reflect what owners would have liked the property to have been, even if it’s really in the middle of a housing estate. And she warns that odd names can be a deterrent. ‘Would you buy “Cobwebs” if you’re afraid of spiders?’ she asks.

Modern fittings in period homes

‘Bad quality double glazing and especially plastic windows in period properties are unpopular,’ says Karen Hedges of the John Payne agency in south east London. Fittings must compliment the aesthetic of the house, not clash.

Cheesy 1970s features

Magnolia paint or carpets in bathrooms and kitchens are big no-no’s for Alastair Cochrane of the Stirling Ackroyd agency. Meanwhile, Tony Wheeler, of the Leaders agency, says other throwback nightmares include ‘textured ceilings and outdated appliances’.

Decking

Nick Cunningham of Stacks Property Search warns: ‘Unless it’s obviously part of a design scheme and beautifully installed, decking can be viewed as a cheap and lazy option – think quick home transformation TV shows.’

If you have decking and don’t want to scrap it, make sure it doesn’t show its age through insect damage, rotting boards, or exposed screws becoming trip hazards; a thorough re-sealing and re-painting will boost appearances.

Gnomes

‘They’re appalling. People laugh at them and sometimes laugh at the owners too. It sets the wrong tone about a home so hide them in a shed during a viewing,’ recommends Dorset buying agent Tracey Adamson.

Clutter

Take a leaf out of Stacey Solomon’s book and sort your life out – otherwise say goodbye to a quick sale. Josephine Ashby of John Bray cautions: ‘Buyers simply can’t imagine the space without the mess. Switched-on buyers will also notice lack of storage space. In compact properties where hidden space can’t be created, this is a big negative.’

It’s not just space. Some agents say buyers who see a messy home believe it’s an indication that the sellers may not have been organised or bothered to maintain the property in peak condition.

Smelly homes

‘Buyers use all their senses and smelly houses are a hard sell,’ says Rachel Johnston of Stacks Property Search. ‘Some are an easy fix – for instance niffy teenage bedrooms and bathrooms, or pet and cooking odours, but they can still lead to bad impressions. But other smells are more damaging when it comes to selling; proximity to pungent farms, or an underlying smell of damp.’

One London agency, Petty Son & Prestwich, even recommends avoiding strong ‘homely’ odours such as percolating coffee or fresh bread which can distract buyers on a viewing. Instead it suggests subtle citrus, pine, jasmine or cinnamon.

Problems next door

If there are disputes with neighbours over noise or boundaries, these should be declared on a Property Information Form when you sell – and there are legal risks if you fail to do so, but the problem returns after the new owner moves in.

It’s not just the folks next door who can be a turn-off. ‘Close proximity of electricity pylons is a cause of concern for buyers. Although walking distance to local schools is usually a positive, if the property is adjacent to a school then traffic and parking issues can be off-putting,’ according to Scott Caudwell of Leaders Romans Group.

Unfinished jobs

Buyers dislike poorly-built extensions, unsympathetic alterations, awkwardly-shaped rooms,’ says Michael Zucker of estate agency Jeremy Leaf & Co. And the boom in home working means fewer people want the disruption of builders coming in to make big changes or put right botched work commissioned in the past by the seller.

Rupert Stephenson of the Black Brick Buying Agency adds: ‘The cost of building works has sky-rocketed recently and buyers want property which is immaculate or is a complete wreck – but wrecks are eye-wateringly expensive to put right these days, so these have to be dirt cheap to attract any interest.’

A pushy seller

Leave the sales pitch to the agent selling your home – that’s what you pay them for. A property professional will also get valuable feedback from viewers who would be afraid to tell an owner directly, while teasing out information about the buyer such as whether they are ‘ready to go’ or simply looking at properties out of curiosity.

Nick Ferrier of the Jackson-Stops agency says: ‘Having the seller shadow the agent during viewings can make potential buyers feel uncomfortable and unrelaxed. When selling a house, it’s all about first impressions – you’re selling a lifestyle. A buyer needs to imagine themselves there, not feel they are in someone else’s home.’

What buyers love

Original features

‘Original, well cared for character features are a must,’ says Emma Capon of the Fine & Country estate agency. Or – in the words of Karen Hedges of the John Payne agency in Greenwich: ‘Absolutely anything original, even if it’s falling down.’ Original beams are hugely sought-after, as are reclaimed wooden floors.

Open fires

‘An open fire is essential in a period house,’ says Clare Coode, regional director of Stacks Property Search agency. ‘I saw a beautiful country house that took four years to sell, chiefly because there was no fireplace in any reception room. A period house without a fireplace is like a summer’s day without sunshine.’

A downstairs loo

‘It’s something buyers don’t think about until it’s missing – and then it can end up being a deal-breaker,” explains Sarah Cull of Strutt & Parker, who believes they’re essential for modern families or anyone who enjoys entertaining. ‘Older period homes don’t always have the space, but if there’s potential to add one in, it’s always worth the investment.’

Big windows

‘Light sells,’ according to Clare Coode. ‘Big windows with a view are always a winner, as are window seats, conservatories and roof lights.’

A recent survey by the company Rooflights found that 84 per cent of home buyers valued the amount of natural light in a property as the most important factor in their search.

Dedicated home office

Government figures show 41 per cent of UK employees work some or all of the week from home – so sellers should make this part of their offer to buyers. ‘Carving out a dedicated space for home working – even just on a landing, or a nook off another room – makes houses more versatile for those with a hybrid working pattern,’ says Amy Reynolds of Richmond agency Antony Roberts.

Gardens

‘An oasis of calm where buyers can imagine escaping from hectic daily life is highly prized by buyers of everything from small cottages to town houses to large manors. Big isn’t necessarily beautiful; more important is aspect combined with clever landscaping and planting,’ explains Ms Ashby.

But remember it’s horses for courses. A property that’s likely to sell to an investor as a buy to let, or to someone wanting a holiday home, will be more attractive if the garden is low maintenance. For a family house, especially a larger one, a substantial garden would be a dream for green-fingered buyers.

Space for the car

Whether it’s a garage, fancy driveway or an old-school carport, this is a must-have for many buyers, especially if they have or want an electric vehicle requiring charging.

And in some areas, ‘it’s also due to all the flashy Range Rovers being stolen’, admits Robert Keeble of Surrey agency Langford Russell.

A great kitchen

‘We’ve become a nation of foodies – much more than we used to be – so buyers love a gorgeous kitchen,’ says Richard Freshwater of Cheffins estate agency.

He adds: ‘A beautifully crafted kitchen, whether it’s traditional with a charming Aga, or with contemporary finishes, is always appreciated. And people just love a beautifully organised pantry, with neatly lined up condiments and homemade jams.’

A third of estate agents polled by Propertymark, the agents’ own trade body, suggested that a quality kitchen was the most significant factor in swaying prospective buyers in favour of putting in an offer.

Energy efficiency

This is measured by the rating on the Energy Performance Certificate that’s displayed when your home goes on sale. A is the best, G the worst.

Ed Jephson of Stacks Property Search says: ‘When EPCs were first introduced, they felt like just another box to tick with little real value. However, as awareness around energy efficiency, environmental impact and rising energy costs grew, ratings have become a key consideration for buyers.

‘A bad EPC can be a big turn-off for buyers, especially those who aren’t planning any renovations. A bad EPC on a property that requires modernisation is something that may be tolerated; but on a property that is beautifully finished and ready to move into, it’s a big headache as retrofitting is costly.’

Why Americans Can’t Get Enough of the Cotswolds

England’s most picturesque countryside destination is becoming extremely popular with Americans, and the election is being cited as one reason for the surge in interest.

By Sarah Rappaport

Hi, it’s Sarah Rappaport, your luxury reporter in London. Last time you heard from me, I was soaking up the sun on the Athens Riviera. This week, I wrapped up warm on a reporting trip to the Athens of the north—Edinburgh.

The Scottish capital is having a real moment now with some stellar new hotel openings such as 100 Princes Street, which features bespoke tartan designs and unbeatable views of the castle. More on that to come in December.

But for now, let’s talk about my favorite British countryside escape, the Cotswolds, which are a Nancy Meyers fever dream, especially now in the twinkling festive season and with a light dusting of snow on the cobbled streets.

The 800 square miles of rolling hills and small villages are less than two hours away from London, and lately a spate of new openings and an influx of Americans have it drawing comparisons to the Hamptons, the beachy summer playground of New York’s elite.

Take, for instance, the year-old members club Estelle Manor, also one of the Cotswolds’ best new luxury hotels, which has quickly become one of the hottest hangouts in the area.

When I arrived for lunch to meet with a top Cotswolds real estate agent on a Thursday afternoon in November, the light-filled brasserie and common spaces were busy, and I was delighted to see the opulent Jacobean manor house all decked out for the holidays. I also noticed a helicopter landing on the grounds and overheard American accents in the parking lot full of Range Rovers and flashy sports cars.

The Cotswolds are getting more celebrity residents, too. Ellen DeGeneres and Portia de Rossi are said to have made a permanent move to the Cotswolds from California and were spotted at Jeremy Clarkson’s buzzy new pub last week. The move was reported in The Wrap as a decision to leave the US because of the election results.

I can’t speak to their reasoning, but I did see DeGeneres at the RH England launch party last summer, dancing to an Idris Elba DJ set at the stately home-turned furniture store, so they clearly had some connection to the English countryside before President-elect Donald Trump’s victory.

Local real estate agents and business owners affirm that even noncelebrity, regular-rich Americans are coming in droves. Harry Gladwin, head of the Cotswolds at the Buying Solution, says that in the past year his American clients have increased by 30% and the figure is growing since the US election.

“The Cotswolds seems to be a mecca for Americans who want the ‘London lite’ lifestyle with great schooling,” Gladwin says. He adds that his American clients aren’t afraid of a big historical renovation project either.

Gladwin says a client from New York recently purchased a Grade I-listed house—meaning a heritage building of highest historical significance—and is working with local experts to bring it into the modern day.

Camilla Dell, founder of Black Brick agency, says she’s seen a number of Americans buy in the waterfront Lakes by Yoo development in the Cotswolds, which is home to a spa in collaboration with supermodel Kate Moss. A two-bed cabin is listed at £1.4 million ($1.75 million).

“The countryside may be in a new phase as Americans living in London start buying weekend retreats, like New Yorkers buying in the Hamptons,” Dell says. And as Yankees invade, Cotswolds businesses are catering to them.

D’Ambrosi Fine Foods, which opened in the historic market town of Stow-on-the-Wold during the pandemic and flies the stars and stripes, is owned by Americans Jesse and Andrew D’Ambrosi (as seen on Top Chef), who have made the Cotswolds their new home.

Interior designer and floral stylist Jesse says that while their menu isn’t strictly American, they’ve been fortunate to cultivate a loyal American clientele, which is driving a rise in demand for their holiday catering. The business goes big for the Fourth of July and, of course, Thanksgiving. (Judging by the photo, that includes canned cranberry sauce, as the Pilgrims intended. Fight me.)

“This year we’ve had a 40% increase in orders for our Thanksgiving menu, which includes a rather extraordinary smoked and glazed turkey and the meanest dark chocolate pecan pie in the land. It seems to hit the ticket for those craving a taste of home,” says Jesse, who notes that she’s seen more Americans both visiting and living in the Cotswolds, even outside the festive season.

“It’s also great to hear how many Thanksgiving celebrations are happening locally,” she continues. “As Americans ourselves, it’s music to our ears.”

Founder of UK’s Black Brick set to visit Dubai and Riyadh

20% of company’s clientele originated from ME, including its largest dealer this year.

Camilla Dell, Managing Partner and Founder of Black Brick, a premier buying agency specializing in London real estate, is gearing up for a notable visit to Dubai and Riyadh in November. This strategic trip aims to connect with Middle Eastern investors and shed light on the enduring appeal of London’s property market, even amid shifting economic landscapes.

London continues to capture the interest of Middle Eastern buyers, thanks to its rich cultural scene, world-class educational institutions, and robust investment opportunities. Despite the recent UK budget, the impact on many Middle Eastern investors has been minimal. Most buyers of UK real estate from the Middle East do not plan to become residents in the UK, so the proposed modifications to the UK Resident Non-Domicile tax regime hold limited relevance for them. Additionally, London’s temperate climate offers an attractive escape from the scorching Middle Eastern summers, further boosting its appeal as a destination for second homes.

One change that will impact all buyers of second homes, is the increase in the Stamp Duty surcharge (irrespective of whether the buyer is British or international) which was increased by 2 per cent in last week’s UK budget with immediate effect. This means that, depending on property value and buyer nationality, buyers of second homes will pay up to 19 per cent over the value of their home in buying tax.

Black Brick believes the prime London market will be able to absorb the tax changes. Managing Partner Camilla Dell comments, “I don’t believe an additional 2 per cent will deter someone from wanting to buy a property in London. On a £2 million purchase the additional tax equates to just £40,000. I think that in the very short term, between now and Christmas, things could be a bit slow,” she said.

“It will take a bit of time to feed into peoples’ psyches and there may be buyers who attempt to negotiate a 2 per cent price cut to cover the higher tax. But it does not fundamentally alter why people like to buy property in Prime Central London (PCL). As with previous rises in Stamp Duty, we expect the ultimate price for the rise to be paid for by the seller. History has shown that when Stamp Duty goes up transactions slow down while reality sinks in. Prices then fall in line with the rise, and sometimes overshoot it.”

As a result, Dell expects to see more standoffs between buyers and sellers over who will cover the extra tax. “At Black Brick we are already embarking on some tough renegotiations for clients under offer and not yet exchanged to take into account the additional 2 per cent.”

“With weaker market sentiment, we are seeing a dynamic market shift that presents significant opportunities for buyers,” said Camilla Dell. “This year, Black Brick has achieved an average saving of 9 per cent off asking prices for our clients, compared to 6 per cent last year. Recent data from Knight Frank indicates an 18 per cent drop in £5m+ transactions in the year to September. With an increase in new listings, buyers have an abundance of options and now hold a strong position in the market. This shift marks a buyers’ market that hasn’t been seen in years.”

In a positive move for the UK property market, UK Chancellor Rachel Reeves decided against hiking Capital Gains Tax for buy to let investors – a widely anticipated move which sparked an exodus of landlords from the sector over the summer.

There could also be a silver lining for investors buying multiple properties.

“Interestingly there’s been no change at all to “the rule of six”,” said Dell. “Investors buying six or more properties, or a property that is classed as mixed use – with residential and commercial uses – still benefit from significantly lower Stamp Duty rates of just 5%. I expect to see more interest from bulk investors taking advantage of the current buyers’ market, particularly from Middle Eastern investors who like this kind of investing. Bulk investors enjoy a series of benefits beyond Stamp Duty: control over their running costs, the opportunity to sell a building if the need arises, or to break it up and sell flats individually, and the ability to negotiate a better price.”

“At Black Brick we’ve successfully negotiated as much as 20 per cent from asking prices on bulk deals from developers,” said Dell. “And with rents rising and yields improving, this sector is looking more attractive, particularly for freehold blocks.”

This year, nearly 20% of Black Brick’s clientele has originated from the Middle East, including the company’s largest deal of the year: an exclusive off-market country estate transaction valued at approximately £42 million.

As part of her visit, Camilla Dell will co-host two high-profile events in Riyadh. On November 12, she will collaborate with HNW Advisor Events to host an exclusive gathering that will provide high-net-worth individuals with valuable insights into the London property market. On November 13, she will co-host a distinguished lunch event at the Intercontinental Hotel alongside Forster’s Law Firm and Barclays Private Bank, fostering in-depth discussions on UK investment opportunities.

Navigating London’s competitive real estate market, which boasts over 7,000 estate agents, requires expert guidance. Black Brick stands out for its ability to provide clients with tailored advice and access to off-market properties, with nearly 50 per cent of deals sourced beyond traditional channels. Camilla Dell is eager to meet with investors in Dubai and Riyadh, offering them unparalleled insights and support in navigating one of the most complex and dynamic real estate markets in the world.

Visit www.black-brick.com for more information.

US Election 2024: how Donald Trump’s win will impact the London property market

Requests to rent trophy homes went up overnight while, longer term, a Trump victory could pump up the deflated central London sales market

By Anna White

The phones of London’s high-end estate agents have been ringing overnight. Enquiries from anti-Trump Americans to rent trophy homes on London’s most prestigious streets started to come in during the early hours of Wednesday morning as a Donald Trump victory seemed inevitable.

“My team have been up most of the night fielding enquiries from many of the US cities that we work with, including New York and Los Angeles,” says Becky Fatemi of Sotheby’s International Realty. “The most immediate requests are for rentals. They want wide-fronted townhouses in Notting Hill or large lateral apartments in buildings with a porter, such as the Peninsula. We expect to see this demand continue,” she adds.

James Gow, head of London residential sales for Strutt & Parker, believes this activity will bleed over into the sales sector too in what is known as Prime Central London (PCL), and boost this micro-market – which is small in footprint but large in value for the UK economy.

“Trump is such a polarising figure that there will be some wealthy Americans who will just think, ‘I do not agree with his rhetoric and I just cannot be a part of it,'” Gow says.

Sentiment is the main driver in the PCL market as these buyers are so wealthy they are rarely forced to move, Gow continues. Due to constraints on new developments and many buildings used for other purposes – such as embassies – there is historically a lack of supply of homes in the most prestigious pockets of Westminster and Kensington and Chelsea. “Therefore, an influx of Americans buying up homes with create a swing in sentiment and momentum and could move prices up too. A Trump win could be good for the London market” he says.

US buyers have been here all year

North American buyers have been preparing their property portfolios and location in the lead up to the US election this November. Even when other international buyers dropped off over the course of 2024 due to uncertainty around the UK change in government and taxation levels, US buyers have still been property shopping in London.

US buyers were the top non-UK visitors to the Savills website this August and over the last year have accounted for 14 per cent of deals.

Buying agent Liam Monaghan of LCP Private Office has seen an “uptick” in American buyers in 2024 with nearly a third of buyers coming from North America. “The US election is a polarising event and therefore has driven some US clients to think about their worldwide holdings carefully. It is sensible to have a foothold in both camps as they monitor the political landscape and financial markets,” he says.

They are shopping for period properties with charm and traditional features but are modernised inside with state-of-the-art fixtures – or as Fatemi calls it “turnkey” aka ready to move straight into.

“We recently fully refurnished a top floor flat in Notting Hill for an American buyer who loved the character of the building but wanted a complete internal renovation to modernise throughout. They also favour new build schemes with all amenities onsite – of late US buyers have bought in the Old War Offices in Westminster and Regents Crescent with views over Regents Park,” Monaghan adds.

A new, mobile generation

Historically, wealth generated in American stayed in America, explains Savills’ Rory McMullen. Now there is a new more mobile generation of wealth. Younger individuals and families who have made money through tech, crypto, venture capital and private equity. With more remote working and a change in attitude after covid this generation is more mobile. “London has seen this migration of young US wealth over the last few years,” he explains. “It is a trend that is set to continue.”

“They often rent first buy later, known as ‘try before you buy’. Rental stock in the centre of London is so constrained that any influx is set to increase rents once again. “I have seen a significant increase in enquiries for both short- and long-term rents in the run up to the US election, particularly from families in New York. We saw an influx in 2016 when Trump won – we are expecting to this this again,” says Olivia McSweeney of Sotheby’s International Realty.

London as a safe haven has not changed

Some will see the Trump win as unsettling back home and it will motivate them to move. But there are many other factors pushing US buyers into London and the UK’s country house market, according to buying agent Camilla Dell of Black Brick.

She cites the strong dollar against the pound, falling prices in PCL, the British high quality education system and the perception of safety as factors which continue to appeal to US high networth individual.

“We worry about crime here but it is not comparable to gun crime in the US. We are sending children into school through the school gate and not through metal detectors. After covid there is also a huge homelessness crisis in cities such as New York and drug taking on the streets is rife,” she says.

For Gow, the safe haven status of London remains its major selling point at a time when the Trump win will breed further unrest in the US. And, while conflict is raging in the Middle East and Ukraine there is renewed certainty in the UK.

“2024 has been like driving down the motorway in the fog, you drive slowly peering through the windscreen. But the UK and the US election are down now – we have certainty and visibility which should translate into a busy market in the New Year,” he concludes.

 

What does Labour’s 2024 Budget mean for the property market?

A couple of weeks ago, chancellor Rachel Reeves delivered her first Budget. Here’s how the measures introduced will affect prices and prospects for buyers, sellers, second home-owners and everyone in between.

By Anna Solomon

On 30 October 2024, Labour set out its fiscal plans for the year ahead. Expectations of clampdowns on multiple homeowners, with breaks for the poorest in society, had been swirling. Aspiring homeowners hoped for a silver bullet to help them get onto the property ladder.

When it came to housing, Chancellor of the Exchequer Rachel Reeves’ 2024 Budget was, for the most part, passive, with few meaningful implications for the wealthy and little relief for first-time buyers. However, Labour did arguably deliver on its promise to help vulnerable families, pledging £5 billion of investment for affordable housing.

Here, we delve into the particulars of exactly what the statement means for various groups, and how it plays into an overall picture of a housing market slowly but surely recovering from interest rate hikes and other challenges.

Homeowners

Autumn is typically a busy time for transactions, and this year has been no different, with Rightmove reporting that sales are up 29 per cent compared to the same time last year. “Whilst there is still optimism that interest rates will lower even further, buyers seem to have settled into the new normal of higher rates than what we had been experiencing for over a decade,” says Lisa Simon, head of residential at Carter Jonas.

Supply is also up, with the number of homes currently for sale 12 per cent higher than in autumn 2023. While activity is healthy, Rightmove did record lower-than-average price growth in October, illustrating that sellers still need to set a realistic asking price to find a buyer.

At the prime end of the market, buyers are having their moment, says Tom Kain, a partner at buying agent Black Brick, citing “a growing level of data showing conditions are improving for buyers of property over £2 million”. “Anyone who bought within the last 10 years is finding it hard to make their money back if they are re-selling, and asking prices are dropping and bigger discounts are being negotiated,” he says, adding: “In some areas, like the catchment areas of top-rated state schools, it may be a good time to sell.”

The prime market is generally more resilient to fluctuations, as a smaller percentage of these homeowners have debt on their property. “Luxury properties will always be in high demand, as evidenced by the volume of high-value transactions that have happened this year,” says Samuel Richardson, head of sales at Carter Jonas. “International buyers continue to place confidence in the prime London market’s position as a safe place to invest.”

Second-home owners and landlords

Perhaps the most notable measure announced in the Budget was the two per cent stamp duty increase for second home purchases. The surcharge rose from three to five per cent, which amounts to an additional £10,000 on a property of £500,000. While this may give some second-home buyers pause for thought in the short term, and may result in some deals falling through (buyers will now have to raise an additional £7,000 if they are buying an averagely-priced UK home), the charge is likely to become just another that second home-buyers become accustomed to.

This is especially true as, historically, stamp duty increases have had a downward effect on prices, Kain points out. The value of stamp duty is likely to simply be knocked off asking prices. Richardson agrees, recalling the three per cent stamp duty hike for second homes brought in in 2016: “This had relatively little impact on the central London market, in fact, the annual growth that year was 8.1 per cent.”

The stamp duty increase is manageable. What would have been less palatable for second-home owners would have been an increase to capital gains tax (which is paid on any profit made from the sale of a property). For those who own property as an investment, therefore, the overriding response to the Budget is likely to be one of relief.

Renters and first-time buyers

Little relief was offered to those aspiring to get on the property ladder. Mortgage rates remain high, rents remain high (hindering people’s ability to save for a deposit), and the Budget made no mention of an extension to the current stamp duty relief for first-time buyers, which is due to end in March 2025. At the end of March the threshold at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000. According to Hamptons, 37 per cent of first-time buyers currently pay stamp duty in London; by April this will have risen to 71 per cent.

Further, there are fears that the additional stamp duty might deter small private landlords from adding accommodation for tenants, leading to further rent rises. That said, Simon believes the opposite may be true: “Legislation that hinders investment from second-home owners, leading to many choosing to downsize or entirely get rid of their property portfolio, may mean that more options may come to the market for first-time buyers.” A realistic assessment of the impact of the stamp duty increase for second-home owners on first-time buyers, therefore, is that it will be negligible.

A small consolation (especially as banks are already doing this) comes in the form of the rebranding of the Mortgage Guarantee Scheme as Freedom to Buy – the government’s guarantee to lenders against 95 per cent mortgages so that first-time buyers only have to find a five per cent deposit.

The verdict

Arguably, the winners of the Budget are vulnerable people, with Labour setting out hard targets for affordable housing. Meanwhile, those at the top remain relatively unscathed, which could and should be considered a win for them. It’s those in the middle who lose out. However, one thing that can be said with certainty about the Budget: the fact that it is now over will bolster the market. Reeves’ statement has put to bed a period of uncertainty, meaning that transactions can now forge ahead with confidence.

‘Imposing indiscriminate tax hikes is a short sighted approach’: A top buying agency’s Budget wish list

As a ‘painful’ Autumn Statement looms, Black Brick boss Camilla Dell shares her views on what the Chancellor should address.

By Camilla Dell

Ever since Sir Keir Starmer stepped into the Downing Street garden and issued a warning that the forthcoming budget would be “painful”, commentators have been predicting a whole range of possible tax raids, writes Camilla Dell.

Black Brick’s view is that imposing indiscriminate tax hikes is a short sighted approach. What a Government looking for growth, prosperity, and a healthy, active housing market should be doing is encouraging people to buy, sell, invest, and, most of all, remain in the UK.

Capital Gains Tax

It is widely anticipated that CGT for second home owners and landlords will be increased from a current maximum rate of  24% to up to 45%. Across the UK, landlords have already begun voting with their feet and selling up – Rightmove has revealed that almost one in five of homes currently for sale has previously been rented, compared to 8% back in 2010.

But CGT is only the latest travail to have hit UK landlords in recent years – they have already endured the phasing-out of mortgage interest tax relief, tighter rules on tenant evictions, and more onerous safety regulations.

And this gradual squeeze has had unintended consequences which have rippled right through the housing market.

George Osborne poured glue into the housing market when he increased stamp duty and ended landlords’ right to have a mortgage as a tax deductible expense.

George Osborne poured glue into the housing market when he increased stamp duty and ended landlords’ right to have a mortgage as a tax deductible expense.

It did not solve the housing crisis and it has created a really bad environment for renters. There is not enough supply, build to rent has not filled that void, and landlords have just been battered in the press when most of them are providing an excellent service. You have now got dwindling supply and that is a really bad thing.

In Cornwall, Anna Sharp of Black Brick’s country department, is particularly concerned about second home owners, who are simultaneously being hit with Council Tax surcharges, and the end of the furnished holiday lettings tax regime, which had excluded them from the end of interest rate relief.

“All of this is affecting investment buyers,” she warned. “Holiday let bookings are down 37% in Cornwall this year, so change would have occurred naturally. This is forcing a lot of people to sell, but will not solve the housing crisis in Cornwall, because a lot of these homes are priced above £500,000 and local buyers are not able to afford them.”

Non Doms

One change the Government has already confirmed is a dismantling of the Non Dom tax system, which currently allows high net worth individuals to live in the UK and pay tax on their UK income only. Despite this, the latest data shows that in the 2022/23 tax year the 74,000 Non Doms paid, collectively, £8.9bn in tax.

“If we get rid of Non Doms, we are just waving that off,” said Tom Kain, a Partner at Black Brick.

Let’s hope that Rachel Reeves is now finally listening to tax experts. Rumours are that the Chancellor is now considering watering down the changes amid concerns it will raise no money.

Inheritance Tax

The other big issue is IHT, currently charged at 40% of estates worth more than £325,000. In reality, however, there are many exemptions and only 5% of deaths are taxed in the UK, often at much lower rates. Older homeowners have been particularly spooked by the prospect of paying more and, possibly as a result, another trend highlighted by Rightmove has been a surge in the number of large houses for sale. “I definitely saw this trend emerging in the last year of people who probably should have moved in their late 70s and early 80s but had put it off because of the pandemic starting to downsize,” said West Country specialist Rupert Stephenson, of Black Brick’s Country & Coast Department.

“They wanted to quickly pass on their wealth to their children.”

Stamp Duty

Black Brick’s Rupert Stephenson thinks that pushing older homeowners out of their homes with the threat of higher taxes is unfair. A more humane, effective alternative would be to use less stick and more carrot.

Late last month, the Organisation for Economic Co-operation and Development (OECD) called for Stamp Duty, which it argued hinders people from moving to pursue better job opportunities or downsizing, to be scrapped.

Stephenson thinks that getting rid of Stamp Duty for both downsizers and first time buyers would get the property market moving again. “It would be good for the economy as a whole – house builders, white goods purchases, you name it. Downsizers need to be encouraged, but punishing them with tax is social engineering. People want stability, not loads of changes all the time.”

Agent warns Government against ‘social engineering’ downsizers

By Marc Shoffman

Inheritance tax (IHT) changes could penalise older homeowners and create a form of “social engineering” for downsizers, a buying agent has warned.

Chancellor Rachel Reeves is expected to raise taxes in her Autumn Budget this month, with expectations of IHT reforms.

She could increase the IHT rate or reduce the tax-free threshold when valuing an estate.

West Country agent Rupert Stephenson, of Black Brick’s Country & Coast Department, warns that older homeowners have been particularly spooked by the prospect of paying more

He suggested this could be reflected in an increase in larger homes being listed on Rightmove.

Stephenson said: “I definitely saw this trend emerging in the last year of people who probably should have moved in their late 70s and early 80s but had put it off because of the pandemic starting to downsize.

“They wanted to quickly pass on their wealth to their children.”

He suggests Stamp Duty would be a better way of supporting and encouraging downsizers, adding: “It would be good for the economy as a whole – house builders, white goods, you name it. Downsizers need to be encouraged, but punishing them with IHT is social engineering.

“People want stability, not loads of changes all the time.”

The wealthy quitting the UK – and it’s not just non-doms

Faced with diminishing returns for hard work, middle-class families are fed up

By Alexandra Goss

Sarah and her husband Jack live in a leafy part of south-west London, own a holiday home on Spain’s Costa Brava and send their two young daughters to private schools. They work hard – Sarah is in PR and Jack is a cryptocurrency trader – and are well paid. Yet they want out of the UK.

“All our costs have gone up, from our mortgage rate to school fees, and living in London is really expensive,” says Sarah, who is in her 40s and did not want to reveal her real name.

“The addition of VAT [on school fees] will affect us. If you’re working hard, you want to have some reward for it. I know we are privileged, but we feel we are constantly chasing our tails.”

The couple both do their jobs remotely and are planning to move abroad. “And we are not the only ones seriously considering it,” Sarah adds. “It’s the biggest topic of conversation with friends at dinner parties or at the school gates.”

Scarcely a day goes by without a headline claiming the rich are checking out of Britain due to fears over the scale of Labour’s tax raid on high earners. VAT will be levied on private school fees from January and speculation is rife that the Chancellor will announce increases to capital gains tax and inheritance tax in the Budget on October 30.

The Adam Smith Institute, a think tank, has argued that people are leaving because the country is “a hostile culture for wealth creators”. It forecast that the share of the population who are millionaires will plunge by 20pc over the next five years, from 4.5pc now to 3.6pc.

Henley & Partners, which helps wealthy investors move overseas, says Britain is on track to lose a record 9,500 millionaires this year – more than any other country in the world except China. The firm says the number of UK enquiries it is receiving for alternative citizenship and residency programmes is the highest ever, with a record number of actual applications made in the second quarter of this year, representing a 325pc increase compared to the first quarter.

Au revoir, non-doms

Most of those leaving are non-doms, who reside in the UK but are domiciled elsewhere for tax purposes and pay UK tax only on the money they earn in this country. Some 74,000 people claimed non-dom status in 2022-23, according to HM Revenue & Customs.

While these wealthy foreigners have always come and gone, they now seem to be leaving in higher numbers, or are not coming here in the first place. Sales of super-expensive London homes over £10m fell 22pc in the year to July compared to the preceding 12-month period, according to Knight Frank estate agency.

Supply of these pricey properties is up: in the capital’s 12 central and most expensive postcodes, the number of homes on the market is 6.2pc higher now than last year, according to website Propcast.

Under changes announced by the Tory government, the existing non-dom tax regime is ending in April 2025. Labour’s first Budget will likely include details of further restrictions, although the Chancellor is understood to be rowing back over fears that it would force so many foreigners to leave it could hit tax revenues.

A further non-dom crackdown is what really has them worried. Marilyn McKeever, from the private wealth team at the law firm BDB Pitmans, says: “Many non-doms are leaving the UK or have already left. More have a bag by the door and are nervously waiting for the Budget.”

In May, a non-dom rushed to buy a house in the Bahamas and has now moved there and put his house in Knightsbridge on the market. As with the middle-class family in south-west London, it is the worried dinner party chatter and WhatsApp messages among friends that have prompted these moves.

Philip Hillier, of HG Christie estate agency, says: “One of the reasons he bought so quickly was because a lot of his non-dom friends were discussing leaving as well. He wanted to get out here before there was a rush and has since referred three friends to us.”

However, non-doms are far from the only ones eyeing the exit – there are the likes of Sarah and James, too.

“Tax is the primary topic of conversation with our clients at the moment, whether they are non-doms or not,” says Roarie Scarisbrick, from the buying agency Property Vision. “The general Labour narrative about impending doom does not help, either.”

It’s not all about tax, though

Robert Salter, of accountancy firm Blick Rothenberg, says: “Covid and the move to flexible working has resulted in many people partially relocating to countries such as Spain and France and becoming ‘treaty resident’ in that location. And, in my experience, they are primarily moving for non-tax reasons such as a better lifestyle overseas.”

And this doesn’t only apply to the top 1pc. Sarah and James aren’t non-doms or hugely wealthy – they have a mortgage, after all. “The quality of life in the UK just isn’t there anymore,” Sarah says. “Things don’t work and it all feels a bit downhearted.”

Crime is another factor. “Crime is bad all over the world but London is perceived to be up there with the worst,” says Charles McDowell, of the buying agency McDowell Properties.

“Many wealthy people now also see the UK as unwelcoming and unrewarding, and a lot of younger ones are heading elsewhere. It’s a brain drain like the 1970s, at a time when people are inherently more mobile anyway.”

Where are they going?

Locations such as Dubai and Singapore are increasingly enticing young high earners and ambitious professionals, says Toby Downes, of the buying agency Haringtons UK. “These places offer favourable tax regimes and vibrant career opportunities that are becoming hard to resist.”

Jason, a banker, has just secured a job in Dubai. He has given notice to his London firm and will start before Christmas; his wife and two children will move from their home in south-east England to join him “as soon as they can”.

“I’m not a non-dom and although I’m a high earner compared to many, working in the City is nowhere near as lucrative as it used to be,” explains Jason, who is in his early 40s and wanted to speak under a pseudonym.

“Moving to the UAE seems like a no-brainer. My six-figure salary is similar to what I’ve been getting in London, but my new employer will pay my rent for a year and pay for my children to attend an international school. It’s also exciting to be starting somewhere new when the UK feels so depressing right now.”

The UAE is a top location for many people looking to leave the UK; it’s the main place Sarah and James are considering, too. The country offers guaranteed sunshine, air-conditioned shopping and zero income tax, and it’s also a popular choice for schooling.

GEMS Education, one of the world’s largest private school operators, has seen a steady increase in UK families moving to its network of 44 schools in the UAE in the past two years.

Among them are the children of David Harkin, chief executive of the global education company 8billionideas, who recently relocated with his family to Dubai from the UK.

“Dubai has become one of the most innovative places when it comes to business and education, so it made absolute sense to relocate here and to also have better access to different parts of the world,” Harkin says. “Also, in Dubai, the schools’ extra-curricular activities are second to none, while the safety of the city appeals.”

Portugal is seeing increased interest thanks to its climate, lifestyle and perks such as no inheritance tax and a range of visas designed to appeal to high-net-worth individuals and their families. The Portuguese Chamber of Commerce in the UK says more than 7,500 British people have attended its “Moving to Portugal” events.

There has also been a boom in rich international relocators to Italy, where the non-Italian income of residents is tax-free so long as they pay a flat fee of €200,000 (£167,500) every year.

Diletta Giorgolo Spinola, of Sotheby’s International Realty, says: “There has been a dramatic increase in people of all nationalities, including non-doms previously resident in the UK, looking to move to Italy. In Milan, 80pc of all overseas purchasers are flat-tax buyers.”

Other British people are heading for the sunny shores of Spain. Charlie Mullins, founder of Pimlico Plumbers, announced last month he was selling his £10m-plus London penthouseto become a permanent resident in Marbella, while Nick Trafford, of Lucas Fox, an estate agency, says Barcelona is becoming more popular with British expats.

Keir Starmer ‘given mates rates’ for stay at donor’s £18m flat

Property experts say the prime minister may have underestimated the value of Lord Alli’s London penthouse given its low price compared with similar rentals.

By Emanuele Midolo

Sir Keir Starmer may have underestimated the value of the luxury London penthouse he was given use of by Lord Alli before the election, property experts suggested, receiving “mates’ rates” for his stay.

Starmer stayed at the 5,000 sq ft penthouse in Covent Garden for a month and a half during the general election campaign, and declared the value of the donation to be £20,400, amounting to £450 a day or £13,500 a month.

However, similar properties rented out for short periods in the area have been advertised for more than twice the amount recently, with one Covent Garden apartment offered for £30,000 a month. It was claimed on Friday night that the penthouse next to Alli’s commands rents of £1,800 a day.

The findings follow mounting questions about freebies received by the new Labour government after it emerged that the prime minister and his wife accepted almost £19,000 in donations from Alli for clothes and glasses this year.

“It sounds like mates’ rates to me,” Camilla Dell, founder of the London property agency Black Brick, said. “Based on comparable luxury rentals in the area, it’s very low. And that property is quite unique, quite special — you can’t really compare it with something else. You need to look further afield to find something of that quality.”

Mark Turnstall, founder of Turnstall Property, a boutique agency that specialises in ultra-luxury rentals in central London, said that lettings shorter than 90 days commanded a hefty premium over long lettings.

Mark Turnstall, founder of Turnstall Property, a boutique agency that specialises in ultra-luxury rentals in central London, said that lettings shorter than 90 days commanded a hefty premium over long lettings.

Long-term lets in the area are “cheaper”: a three-bedroom flat in Centre Point on Tottenham Court Road went for £16,250 a month — but still higher than the £13,500 a month claimed by Starmer.

A three-bedroom flat below penthouse level on Portugal Street, near Holborn, is on offer for £19,500 a month with Savills for a minimum of a year’s lease.

Another estate agent specialising in high-end property, who asked not to be named, said there was plenty of “misinformation” and “misleading data” about prices in the luxury sector, and questioned the valuation of Starmer’s stay.

Luxury rental prices in London are on the up, the estate agents said, as high net-worth individuals opt to rent rather than buy to avoid committing to the UK amid proposed changes to the non-domiciled tax status.

Starmer claimed he took up the offer to allow his son to study peacefully for his GCSEs.

“I wasn’t going to let my son fail or not do well in his GCSEs because of journalists outside the front door,” Starmer told Sky News. “We also, as you know, had protesters outside the front door.”

He added that “any parent would have made the same decision”.

A spokesman for Starmer said the donation was declared on time and as required by parliamentary rules.

Alli has been contacted for comment.

The race to sell second homes before Labour puts up CGT

Fearing a capital gains tax increase in the October budget, some holiday let owners are rushing to offload their properties

By David Byers

Tilly Bagshawe, 51, and her husband Robin Nydes, 67, are in a race against time to complete the sale of their £2.85 million “dream” Cotswolds second home.

Bagshawe, a bestselling author, and Nydes, an American businessman, bought the chocolate-box stone house on Lower Slaughter’s village green 12 years ago. They have rented it out as a holiday let in weeks when they are not using it themselves, earning £160,000 in the most recent tax year.

Now, with three of their four children aged 17 and over, they have decided to sell the six-bedroom house, as they increasingly split their time between homes in London and Los Angeles. However, the decision has also been given added urgency due to fears that the chancellor, Rachel Reeves, plans to increase capital gains tax (CGT) in the budget on October 30.

CGT is the levy on the profit made from the sale of assets, including a property which is not your main home. Higher and additional-rate taxpayers pay 24 per cent CGT on the sale of property, but there is speculation that Reeves plans to raise it in line with income tax at 40 to 45 per cent.

“Knowing that Labour was coming in, and there were going to be tax changes and they were going to be negative — particularly with capital gains tax — [and] that there was always likely to be a worsening environment. That probably hastened the decision,” says Bagshawe, whose sister is the former Conservative MP and author Louise Mensch. “Of course it would be nice to sell before your capital gains tax almost doubles.”

Any CGT rise on the scale that has been rumoured will hit Bagshawe and Nydes hard, as they think they will make a profit of about £500,000 on their home, Brook House, which they have put on the market for £2.85 million. At the current rate of 24 per cent, they could face a tax bill of £118,560 when selling it, assuming they have their full capital gains annual allowance and no capital losses. But at 45 per cent, it would be £222,300 — £103,740 more, according to the accountancy firm Blick Rothenberg.

There has been a surge in larger properties being put up for sale in holiday hotspots, according to the property website Rightmove, as sellers try to offload them before any rise. Bagshawe, perhaps unsurprisingly, believes holiday home owners are being used as a convenient cash cow by the government. “I think in general, what they’re trying to do to limit short-term rentals and holiday lets is really bad for our area and for lots of rural areas,” she says.

“In our part of the Cotswolds, for example, it’s a lot of people struggling in the agricultural sector who are trying to rent out their barns or outbuildings. Or people who worked all their lives to afford the dream of a holiday cottage, but who need it to be able to produce a viable income. I think those people are going to be very angry with some of these changes, which will have a knock-on effect on the local economy.”

The great holiday let tax clampdown

There will be plenty of rural residents playing the tiniest of violins. Many have complained loudly that the mass buy-up of homes in rural areas during the pandemic by second home-owners, which was turbocharged by former prime minister Rishi Sunak’s stamp duty holiday, has caused a housing crisis.

In his last budget, the former chancellor, Jeremy Hunt, responded to these protests by announcing that owners of furnished holiday lets will, from next April, no longer get full tax relief on mortgage interest payments, bringing them in line with buy-to-let landlords.

Meanwhile, dozens of local authorities in prime holiday locations like Dorset, Cornwall and the Lake District have been allowed to charge double council tax on second homes, which will also take effect from April next year.

Many agents say the number of holiday lets being put on the market in recent weeks far outstrips demand. Rupert Stephenson from the estate agency Black Brick says: “Some holiday homes that have been in the same family for generations are now coming up for sale as people not only worry about CGT but also have been affected by the change in holiday let tax relief and landlord relief that was imposed by the last government.” He says this includes “a number of prime estates, farms, and coastal properties”, particularly around Exeter and Salcombe in Devon, ranging between £4 million and £10 million.

Helen Whitfield from Butler Sherborn, a Cotswold estate agency which is selling Bagshawe’s house, agrees that fear over CGT is a major factor. “I have been invited to a couple of pitches next week specifically due to CGT planning,” she says.

Anna Sharp, from the Cornwall branch of Black Brick, points out that international travel has picked up since the pandemic, with fewer Brits holidaying at home and bookings “down by an average of 37 per cent this year across Cornwall”. This, combined with soaring mortgage rates, has hit investors in the pocket. In hotspots such as Port Isaac in Cornwall, for example, there are 52 properties on the market with only ten under offer. “For many, it is no longer a viable business transaction, with the yields simply not adding up,” Sharp says.

One investor, who wished to remain anonymous, has recently chosen to sell their holiday home on Mersea Island in Essex, having been hit by a combination of high maintenance and ground rent by her freeholder, and the prospect of CGT changes. “I didn’t want to take any chances ahead of October’s budget,” she says.

A break for first-time buyers

Data from the estate agency Hamptons shows that these clampdowns may already be changing the market in many rural areas, as homes sold by second home-owners are increasingly being snapped up by first-time buyers. The percentage of first-time buyers purchasing properties that had been holiday homes has risen consistently since 2021. In January this year it overtook that of second home-owners for the first time, at 29 per cent to 22 per cent, its highest level ever.

David Fell from Hamptons says that, with the exception of a bump during Covid, this is part of a continuing trend ever since the decision by the former chancellor George Osborne to raise stamp duty by three percentage points for second home-owners and landlords in 2016. “It has definitely pushed more of the homes which are sold into the hands of owner-occupiers — exactly as it was intended to,” Fell says.

The government says it plans further measures to regulate the short-term lettings sector, including an official registration scheme that will show the impact on local communities. Intriguingly, this is supported by Airbnb and the rental site Sykes Cottages, which say it will show that the harm being done to local housing is being exaggerated. Airbnb says, for example, that homes listed for 90 nights or more per year account for just 1.1 per cent of Cornwall’s total housing stock.

Is the party over?

Holiday-let owners will be weighing up whether they can still make it pay. The industry’s supporters claim that, despite the changes, you can make a profit — as long as you pick your area carefully.

The average income made by owners in England in July and August this year was £7,119, up from £6,579 in 2023, according to Sykes Cottages. But this excludes all taxes.

However, it is increasingly important to choose the right location to avoid the saturation in some overheated hotspots. The fastest growing investment area this summer was the artistic and surfing haven of Praa Sands on the south coast of Cornwall, where the average investor made £14,234 in July and August this year.

Second was Nefyn on the northwest Wales coast, where income was up from £7,236 to £9,132, following publicity about Porth Iago beach.

By contrast, more well-known investment areas are proving less profitable. In St Austell, for example, average income has only risen from £6,885 to £7,169. And in Llanberis, north Wales, it is negligible.

Claire Gibson, 54, is one of those who has benefited from the boom at Praa Sands, having earned 30 per cent more this summer than she did last year in bookings for her five-bedroom house. She and her husband Robert Gibson have rented out the house, which has a hot tub and sauna, since she had to relocate to Exeter for work in 2021. “It has worked for us and it continues to do so,” she says.

Gibson will not be affected by Cornwall council’s decision to raise council tax by 100 per cent next April for holiday home-owners. She has registered as a small business and is paying business rates instead, which all investors in England can do if they let properties for a minimum of 70 days a year having made them available for 140. In fact, many properties (although not Claire’s) are eligible for business rates relief too because they have a rateable value — the estimated annual rental value of a property — of less than £12,000.

Indeed, government data shows the number of short-term holiday lets registered for business rates has skyrocketed, from about 8,800 in 2017 to more than 89,000 in 2023 and now accounts for about 10 per cent of all second homes in England.

Gibson says their neighbours have been supportive of her business and that she wants to retire to the house. “As long as I can cover the costs so that we can continue to have the house ready for us when we can come back, that’s our priority,” she says.

One thing is for sure. For those considering selling, but who haven’t yet made up their minds, anxious eyes will be on Reeves’s budget briefcase on October 30.

What about Scotland and Wales?

Scotland has been hit by a blizzard of new rules, including the need for landlords to get a licence from their local council that can cost hundreds of pounds — failure to do so could lead to a £2,500 fine and a banning order. Councils also have the power to convert their region into a short-term let “control area” if there is too much supply, meaning new holiday lets need planning permission to operate.

Wales also tightened its rules in 2022. Owners must now let their properties for at least 182 days a year and make them available to rent for 252 (the threshold in England is 70 and 140), and those who fail to do so will revert to paying council tax as an “empty second home” — a special rate on which councils have the right to charge 300 per cent council tax.

London’s Mansions Are Struggling to Sell

By Sarah Rappaport

London’s most expensive homes are having a tough time selling, with both demand and deals down. According to a new report from real estate company Knight Frank, there were 22% fewer sales above £10 million ($13.2 million) in the 12 months to July, compared with the same time period from 2022–23.

 

The picture is gloomier for the priciest properties: There were just 10 sales above £30 million, compared with 38 in the previous period. In total, super prime sales volume in London came in at £2.77 billion in the 12 months through July, down from £4.3 billion in the period ending in July“Sentiment in prime central London is significantly down,” says buying agent Camilla Dell, founder of Black Brick. “The current market reminds me a little bit of the financial crisis in terms of what I’m seeing in terms of the volume of stock available, price reductions and nervousness in the market from vendors.” 

 

Brokers chalk much of the market uncertainty to July’s election, which was well-flagged to be a shift in government during the proceeding year. The Labour party, which won a resounding victory, had been consistently polling higher than the Conservatives, who had been in power for over a decade. High interest rates also weighed on sentiment; the Bank of England delivered its first cut in four years just this August.

 

Uncertainty has now shifted onto the ramifications of the new government, specifically uncertainty surrounding a new tax regime, says Stuart Bailey, head of super prime sales London at Knight Frank. Tax hikes have been floated by the new Labour government, including possible increases to capital gains and inheritance taxes, which will be revealed in the upcoming UK budget, set for Oct. 30.

It’s also likely that the government will overhaul its system for the 74,000 individuals living in the UK who don’t pay tax on their non-UK income, known as “non-doms.” These include some of the world’s richest people and those who’ve reached the highest rungs of finance; more than 20% of the UK’s highest-earning bankers have been non-doms at some point, according to 2022 research. Famously, the wife of Rishi Sunak, Britain’s former prime minister, also claimed non-dom status. 

 

The unanswered questions around higher tax regimes and plans to do away with preferential tax treatment for wealthy foreigners have been spooking rich buyers, brokers say.

 

“The budget is making people wait and see—so it doesn’t matter whether it it is good, bad or ugly. The point is that it’s uncertain, so people are hesitating now,” says Bailey. He adds that we’re at the low end of a 10-year downward cycle in pricing, and he’s seeing sellers reduce prices to get deals across the line. 

 

The report says that properties in prime central London above £10 million are 14% below their peak in September 2015. That’s even more dramatic in dollars, where the decline is 25%, given the weakening of the pound since the Brexit vote in 2016. This is seen in the amount of American buyers coming into the London market, whose dollars go further than in the past. 

 

“If you’re a buyer, and especially a cash buyer, it’s blatantly a good time to be buying right now at this low point, when there’s not too much competition with other buyers,” says Bailey of the current super prime market, which he characterizes as “frustrating,” especially at the top end. “But we’re just in a vacuum period of sitting on the fence with nothing happening until the budget.”

Revealed: The eight most unwelcoming places to buy a second home in the UK – plus the eight villages where you can buy a stunning property AND be embraced by the locals

By Fred Redwood

Second homes have never been so popular. Before lockdown, just 3 per cent of Britons had a retreat in the countryside or the coast – somewhere to recharge the batteries.

Since then, a rush of successful city-dwellers have sought a spare pied a terre. Parts of Cornwall, where one in ten properties is a second home, are full to bursting over the summer months, as is the Lake District and yachting hotspots in Devon and Dorset.

It’s meant big business for celebrity chefs, bar owners and fashionable clothes chains. However, not everyone is delighted at having half of London and the Home Counties arrive as part-time neighbours. Locals blame the incomers for escalating property prices. The residents of harbour towns often get squeezed out to live on the outskirts. And young people who work all year round are unable to get on the housing ladder.

Legislation is going through in an attempt to claw back this situation. Second homeowners in England could face paying twice the amount of council tax from April 2025, while in Wales (as of April 2023) the maximum level at which local authorities can set council tax premiums for second homes has already increased to 300 per cent. Whether these increases will have the desired effect – to bring more first-time buyer homes to the market – is another matter. Critics maintain that these charges are mere ‘peanuts’ to the wealthy second homeowners.

We’ve spoken with locals, estate agents, second homeowners and councillors to reveal the UK’s most welcoming and unwelcoming towns and villages.

Dartmouth and Newton Ferrers, Devon

Second homeowners are less than popular in the Devon yachting Mecca of Salcombe. Some 57 per cent of the properties here are second homes and the locals complain when the wealthy incomers build enormous mega mansions, ruining their view of the harbour. However, just along the coast it is a different story.

‘The people of Dartmouth, being a naval base, are used to newcomers and the locals are very welcoming,’ says Rupert Stephenson of Black Brick, a property search agency. ‘Newton Ferrers on the estuary of the River Yealm has two good pubs and a post office. It is a community of incomers and everyone gets along extremely well.’ As in all the South Hams district, second homeowners pay double council tax.

Young professionals are ‘flocking’ to the West Country, says buying agency

An influx of new permanent residents since the pandemic ‘has changed the dynamic for many towns in Cornwall’, says Black Brick.

Young professionals are “flocking” to the West Country, says buying agency Black Brick – which set up a Coast & Country division earlier this year to tap into the movement.

“The world has changed since the pandemic; from 2021 we’ve experienced a huge influx of professionals moving to the country,” explains Anna Sharp who heads up Black Brick in Cornwall. “For many ‘working from home or ‘#wfh’ was a phrase we had never even heard of before let alone thinking that it was an option. The world opened up, as did opportunities for many.”

While Sharp flags particular interest from younger professionals in tech, consultancy and creative industries, Rupert Stephenson – who leads BB searches in Devon, Dorset and Somerset – flags rising interest from more middle-aged relocators. “We are getting more and more enquiries from clients in their 40s, 50s & 60s who have moved down to the West Country permanently from places like Oxfordshire, Kent, London and Surrey,” he says.

One symptom of this is “much busier roads over the winter months,” says Stephenson, while Sharp says Cornish hotspots such as Penzance, Penryn, and Newquay “have never felt more alive”, as more permanent residents move in.

Mayfair-based Black Brick was set up by Camilla Dell in 2007, and has become one of the best-known and successful buying agencies in prime London and the Home Counties. Speaking about the move into the West Country in March, Dell told PrimeResi she plans to expand Black Brick services into other parts of the UK this year.

Anna Sharp, Black Brick in Cornwall: “The world has changed since the pandemic; from 2021 we’ve experienced a huge influx of professionals moving to the country. For many ‘working from home or ‘#wfh’ was a phrase we had never even heard of before let alone thinking that it was an option. The world opened up, as did opportunities for many.

“Many young professionals whether they work in tech, consultancy, or in the creative industry, to name a few, now can have a fantastic career or run a successful business in parts of the world they never thought were possible. Who would have thought you could wake up in the morning and go for a surf or a yoga lesson on the beach before work whilst being able to be online ready to work by 9am, coffee in hand, working from many of Cornwall’s fantastic working spaces?

“This has changed the dynamic for many towns in Cornwall, with the gentrification and development of areas such as Penzance, Penryn, and Newquay to name a few. Coffee shops have sprung up creating co-working spaces, yoga studios, creative hubs, and workshops; all of which appeal to Millennials and Gen Z. These areas of Cornwall have never felt more alive, creating a very exciting time to be living in a place I am lucky to call home.

“Many families and early retirees are still looking to relocate to the south west and demand remains strong, with many families searching for ‘the good life’, whereby their children can grow up near coastal or country environments. Typically, this demographic of buyer keeps a smaller property in the city and commutes a few days a week whilst they have for a larger home in the country with space and good schooling nearby as their main home.”

Rupert Stephenson, Black Brick in Devon, Dorset & Somerset: “We are getting more and more enquiries from clients in their 40s, 50s & 60s who have moved down to the West Country permanently from places like Oxfordshire, Kent, London and Surrey. They can work remotely now from almost anywhere in the world since Covid and there is often secondary accommodation which enables clients to have a really good second income from holiday lets or glamping opportunities on site. It’s now far more acceptable to work away from the office and, with such a good communications network in the West Country these days (fast fibre was installed almost everywhere a few years ago and Starlink fills in the gaps on remote places like Dartmoor, you can get 300mbs and 4/5G almost everywhere now), you can be sitting on your boat in the harbour or on a beach or a cafe and still be working (as I am now actually!!).

“With the West Country still offering relatively good value for money compared to London, Home Counties, and the Midlands, it kind of makes sense to cash in and move further afield for a more healthy, vibrant lifestyle, away from the traffic and the daily grind, to live the dream – there’s a wonderful food culture with Michelin star restaurants and gastro pubs, the beaches are world-class, the schools are top quality and there is plenty to do in the winter, country walks, rural sports and sophisticated cities like Bath, Exeter and Truro to visit.

“Interestingly, I have really noticed how much busier the roads are over the winter months here in the West Country in recent years since Covid, bearing testament to just how many main homeowners have moved here in recent years. Some of them already had second homes they have moved into permanently, others have followed and moved ‘lock, stock and barrel’ – when we did it 15 years ago people thought we were mad – not anymore!”

Eight things that are affecting your property value, according to The List’s property experts

The List’s property experts discuss factors to remember when considering investing in your property…

By Vanessa Folkes

Investing in property is a daunting process that is both meticulous and time-consuming. From exterior to interior and everything in between, all of the changes and intricate details of your house contribute to the big jar of property value. However, with these eight factors from eight of The List by House & Garden‘s specialists, the advice given here is a helping hand in preventing alterations that can have a negative effect. Whether you are considering a renovation or looking at a new property entirely, this article has something for everyone.

Room Layout

“Does the orientation make the most of the natural light and garden/landscape views? Is there a large Living Kitchen with a connection to the gardens?” Moulding advertises making it a priority to ask these questions prior to investing in property. “Historic houses were originally designed with kitchens on the dark, service side of the house from where the staff prepared food. The principal rooms for dining and withdrawing were on the side with the best light and views. Nowadays, we live in our kitchens with good family space and breakout snugs. An unaltered historic house will need this potential to be unlocked. Similarly, with the modern demand for master suites to include interconnecting dressing rooms, bathrooms and bedrooms. Guest accommodation will need to be separate with interconnecting ensuite bathrooms.”

Kerb Appeal

“First impressions always count, this is why the front door to your home (and front garden or driveway) can say a lot about the rest of the house to potential viewers,” says the team at Domus Holmes. “If you cannot afford to replace the door, make sure it looks new by giving it a deep clean or fresh coat of paint. Even a new doorknob, house number or name plaque can make the difference. The facade sets the style and character of the home therefore, a neat and tidy presented façade along well-maintained front gardens and borders will add to the overall kerb appeal.”

Proximity To A Tube Station

For those who are based in London or looking to make the move, Middleton Advisors believes that the “proximity to a tube station can significantly impact property value. If a property is too far from a tube station, it affects commutability. Conversely, being too close to a tube station, with the associated noise and visibility, can devalue a home by up to ten to fifteen per cent.”

Home Offices

“Since the pandemic each one of our renovation projects has included at least one home office – more often than not we’ll be asked to create space for two and in some cases three if parents want their children to study outside of their bedrooms.” Edo Mapelli Mozzi, Founder and CEO of Banda goes on to say, “where possible we bring in as much natural light as possible to create a sense of calm. Using sustainable and natural materials throughout such as walnut or oak desks and soft, handwoven rugs sets the tone for creativity and handmade inspiration. If a client comes to sell, having dedicated workspaces can really help elevate a home for modern-day living.”