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‘Sticky’ PCL set for deal drought as buyers & sellers enter deadlock

It will take time for vendors to accept the fact that buyers are far more price sensitive these days, says Black Brick.

Transactions are likely to remain low in Prime London during the months ahead, as buyer and seller expectations remain out of alignment.

This is the prognosis from PCL buying agency Black Brick, which has reported a “very sticky” start to the summer, with buyers “far more price sensitive” than they were at the peak of the pandemic.

The firm suggests it will take time for vendors to accept this fact, and start pricing homes at the lower end of the PCL scale at a level to tempt interest. Until then, unfortunately, much of the market looks set for deadlock…

“I have found that there tends to be a long delay, in a market which is slowing, for that message to sink in for sellers that they need to be realistic about prices,” said managing partner Camilla Dell. “We are just starting to see prices coming down a bit – even where we have been previously told that a seller is in no hurry – and some sellers are becoming more amenable to negotiation.”

While there’s no sign of the double-digit price falls that were being predicted at the start of the year, the team is seeing a “very selective market” which has more in common with pre-pandemic times than with the rollercoaster journey since 2020.

“Buyers are still out there”, said the firm in the update to clients, “particularly cash buyers operating at the top end of the market, but despite healthy budgets they are not willing to pay over the odds for properties. They are also taking the time to be very choosy when it comes to location and specification. As a result, while prices are holding firm, the number of deals being made is the indicator which has taken a hit.”

“Those 2023 forecasts were always ridiculous,” added Caspar Harvard-Walls, a partner at the firm. “The problem was that they did affect buyer confidence and sentiment”.

He suggests the market is now undergoing “normalisation”, with interest rates no longer at a record low, and the race for space far less of a driving force: “We were just spoiled during the Covid-19 market…It was a false reality, a completely unusual set of circumstances. Now buyers are saying hold on, that property is the wrong price, and that is how it should be.”

The latest LonRes data showed PCL sales activity in April was 34.7% lower than in 2022, with the year-to-date total down more than 24%. The number of properties under offer was down 11% year-on-year.

The high-end sector of the market has outperformed, however – agreed sales above £5mn were up 26% on last year and are more than 50% above the average levels seen between 2017 and 2019.

Dell says the reason for the “two-tier” market is simple: “The people who are buying at the moment are wealthier clients who are less reliant on mortgage finance. They include overseas buyers who are still buying in London because of the weak pound, and they tend to have bigger budgets.”

The estate agency Strutt & Parker decided to retain its 2023 sales market forecasts last week, citing “renewed confidence” and “signs of recovery and stability” in around South East, East of England and Prime Central London as cause for a relatively bullish outlook.

At the national level, Strutts expects the average UK house price to drop by up to 5% through this year (something between a -5% and a 0% annual change), while Prime Central London could see prices either rise or fall by 3% (a -3% to +3% forecast range for the current year).

Prices in Prime London and around the UK are still on track to rise by between 10% and 15% over the next five years, according to the firm’s analysts.

Why wealthy Turks are buying up elite postcodes in London

Financial instability in their homeland is driving many towards the capital’s prime property market

By Melissa York

The wisteria-covered portico pillars of Belgravia are in full bloom, and the world’s wealthiest are on the hunt for a safe haven for their families — and their cash.

“We typically see Middle Eastern, Asian and US investors in London, however, this year one nationality is standing out as unusually active,” says Becky Fatemi, chief executive at the property buying agency Rokstone, “and that is buyers from Turkey.”

There have been thriving communities of Turks, Kurds and Cypriots in London for decades, congregating mainly around north and southeast London. However, in the past two to three years they have been joined by a growing number of Istanbul’s monied elite looking for a stable place in which to invest their wealth.

This week Recep Tayyip Erdogan, who has dominated Turkish politics for 20 years, narrowly beat Kemal Kilicdaroglu to be re-elected president, with 52.16 per cent of the vote. The country has been in economic turmoil since 2018, and this is believed to have led to Erdogan’s party, the AKP, losing Turkey’s biggest cities, including Istanbul and Ankara, in the 2019 local elections. There was a modest economic recovery during the pandemic, but the Turkish lira lost 44 per cent of its value against the dollar in 2021 after the Central Bank of Turkey cut interest rates from 19 per cent to 14 per cent.

Camilla Dell, founder of the buying agency Black Brick, says the currency crash means some Turks can only afford to rent in London at the moment, but the wealthier ones are keen to get their money out of the country. “Many Turks fear the longer Erdogan remains in power, the worse the country’s economy will become. They have lost all hope that he can turn it around. His handling of the earthquake disaster [in February] has only cemented this thought in the mind of many Turks, both locally and Turkish expats,” she says.

Turkey’s high-net-worth population is set to grow by 156.5 per cent by 2027, according to Knight Frank’s Wealth Report — faster than any other country’s elite.

Wealthy Turks like to rub shoulders in the prestigious neighbourhoods long favoured by buyers from the United Arab Emirates, southeast Asia and, until recently, Russia. Turkish entrepreneurs were behind some of the biggest property deals in Knightsbridge, Mayfair, South Kensington and Belgravia last year.

Hanzade Dogan Boyner, one of Turkey’s most high-profile tech bosses, who founded Hepsiburada, an online shopping platform dubbed “the Amazon of the East”, bought a six-bedroom Victorian mansion in Belgravia for £27 million last summer. In the winter there was a significant sale in Cadogan Square, Knightsbridge, to a Turkish buyer, who paid £27 million for a property that was originally listed for £35 million.

Rokstone has completed on several properties on behalf of Turkish buyers this year, including a £31 million house in Mayfair, a £7.5 million flat in Knightsbridge and a £4.5 million flat in Paddington. In the past few weeks Fatemi has found two properties for Turks, one in Knightsbridge and the other near Hyde Park. “Both wanted a house with a porter, good ceiling heights and good views,” she says. “The political uncertainty in Turkey seems to be the driving factor behind this heightened interest in London.”

Turkish buyers looking for a speedy purchase will pay cash for new-build flats by the River Thames, reports Lindsay Cuthill, founder of the prime property agency Blue Book. He says: “Buying momentum from Turkey, particularly in London’s prime postcodes, hits new heights when they have an election. Instability often encourages quick financial thinking.”

Institutional Turkish investors too are looking to the UK for solid returns. Will Watson at the Buying Solution, Knight Frank’s in-house buying agency, confirms that he has started working with a Turkish fund to find high-end family homes with potential for long-term capital growth.

At the end of September 2021 Eren Paper bought Shotton Paper Mill in Flintshire for £600 million — one of the largest investments made by a Turkish conglomerate in the UK. It plans to employ 660 people to make containerboard, a common packaging material.

Turkish buyers aren’t just looking to make a quick buck, however. Owning a holiday home in London is seen as evidence that one has “made it” in Turkey, according to Dell.

Education is a key driver for upwardly mobile Turkish families, according to Sophie Rogerson, managing director at the buying agency RFR, who says that she has a £15 million budget from one Turkish client to find a house near Francis Holland, a private girls’ school in Sloane Square, Chelsea, that charges fees of £7,750 a term.

Now that Erdogan has won another term, secondary residency is a “hot topic” among Rogerson’s client’s friends: one is considering moving her two children to the capital for the start of the school year, and a lawyer friend is looking for an investment property in central London.

“London is not the only option, of course. Greece, Portugal and Italy are also discussed at length,” Rogerson says. “However, with English so commonly spoken among Turks, the transition to life in London is felt to be more smooth. There is also a view that, with its vibrant cultural scene, ownership of a London property provides a certain social cachet that other destinations cannot compete with.”

Eight questions an estate agent doesn’t want you to ask — but you absolutely should

By Emma Magnus

Buying a property? These questions will help you assess the price and decide whether there may be wiggle room for negotiation

For most of us, buying a property is the most significant investment we’ll ever make. But how can we know whether we’re getting a fair price, or judge whether a negotiation will be fruitful? Asking the right questions is key.

“Information is critical to be able assess price, ability to negotiate, timescales and whether there are any potential hidden reasons why you may not want —or be able — to buy that property,” says Camilla Dell, founder of buying agency Black Brick. “It’s a very British thing to not ask and be polite, but buying a property is one of the most expensive things a person buys in their lifetime.”

From sussing out the seller to probing the price, here are eight questions you shouldn’t be afraid to ask an estate agent, according to leading buying agents.

Why is the seller selling?

“Understanding why the seller wants to sell is critical when working out how to position offers and, importantly, how amenable the seller may be to negotiating,” says Dell. “A seller that’s getting divorced, probate or receivership sales indicate a higher probability of being able to negotiate successfully. A seller with no mortgage and no real reason to sell other than ‘if they get their price’ suggests far less chance of negotiating anything.”

What is the seller’s timescale?

“This is often overlooked at the offer stage, and many deals fall apart because this isn’t discussed at the outset,” says Ashley Wilsdon, Head of London Buying at Middleton Advisors.

Understanding the seller’s timescale may also help negotiations, adds Dell. Find out whether they have somewhere to move to if your offer is accepted. It might be possible to negotiate a price reduction in return for a delayed completion, for example.

Is the property deliverable?

“This basically means: is the seller actually going to sell?” says Dell. “It’s a good question to ask, particularly for an off-market property where the seller may just be playing at selling rather than being serious about a sale.”

Is the seller ready to sell?

Specifically, Dell recommends asking whether the seller has appointed a law firm on the sale, and whether a legal pack is ready to be sent out. Do they have finance, or a mortgage on their property? This is available to access publicly on the Land Registry.

It’s also worth finding out who the decision maker is, Dell advises. Is it down to one seller, or is the sale a family decision, involving multiple people?

Are you the main agent?

“It is important to know if your agent is directly instructed by the seller. Very often people are unknowingly viewing via a sub-agent,” says Roarie Scarisbrick, partner at buying agent Property Vision. Not having direct contact with the seller may disadvantage buyers — plus, in competitive bidding, the main agent will favour their own buyer over the sub-agents, who will want a share of their fee.

What offers have been received previously – and what happened?

Dell and Wilsdon both recommend asking about previous offers. Crucially, find out what happened. If a past offer was accepted, why did the buyer withdraw from the purchase? Or, if a sale fell through — why?

On that note, also ask how long the vendor has been trying to sell for, adds Dell.

Can you tell me more about your current offers?

“If you are being hustled by an agent who has an offer, then you really need to push them on the terms of the bid,” advises Scarisbrick. “What are the conditions? Are they cash buyers or subject to finance? What timings are they proposing? Do they have a related sale? Are they represented by a buying agent? People tend to focus on the headline figure, but the terms and the quality of the bidder are more important.”

Is this your price or the vendor’s?

“If the price doesn’t seem right, then it is worth finding out how they got there,” says Scarisbrick. “Very often vendors get greedy and disregard their agent’s advice on price. If this is the case, then there is a problem, and it may take time in the market for the penny to drop. Sometimes waiting is the best strategy.”

If it’s the agent’s price, on the other hand, Wilsdon suggests asking for evidence of comparable properties that have sold at a similar value to justify the guide price. “If they can’t, then you know it’s too much.”

 

Talking Heads: What would a Labour-led government mean for the prime property market?

The spectre of Corbyn may be laid to rest, but the threat of a mansion tax continues to haunt the streets of PCL as election chatter intensifies. Read the latest insights from some of the industry’s top names, including Aston Chase’s Mark Pollack, Black Brick’s Camilla Dell, Prime Purchase’s Charlie Wells, Winkworth’s Dominic Agace, Middleton’s Mark Parkinson & many more…

 

“Discussions around the general election have started to creep into conversations”, according to Christian Lock-Necrews, head of the Knightsbridge office at Knight Frank; following Labour’s strong showing at the local elections, and various manifesto murmurings, many other agents and advisors will be fielding questions about the possible impact of a change in government next year.

PrimeResi spoke to specialists from across the prime property sector to gauge the general feeling: what would a Labour-led government mean for the market, and which potential policies are keeping buyers and sellers up at night…

 

A Labour Government under the stewardship of Keir Starmer is less of a concern than it was under Jeremy Corbyn

Ashley Wilsdon, Head of London Buying, Middleton Advisors.

“The general consensus amongst our clients is that a Labour government is perhaps an inevitability at this stage…and with it a Mansion Tax of sorts is widely expected.

A Labour Government under the stewardship of Keir Starmer is less of a concern than it was under Jeremy Corbyn and the London property market seems to have already factored in this likelihood, which is reflected in lower levels of transactions compared to the same period last year.

The PCL London market will likely revert to type, namely vendors will be reluctant to sell and buyers will be opportunistic in their approach.”

 

Perhaps gives people who are on the fence a reason not to buy

Charlie Wells, Managing Director, Prime Purchase

“One hopes the reality of a Labour government, should we end up with one, will not be as negative for the top end of the property market as some fear.

There is talk of a percentage increase on stamp duty paid by foreign buyers in the UK – one hopes that the impact of that would be softened by the fact that the pound is relatively speaking pretty weak, although it has recovered a little, and UK property is comparatively not as expensive as property in some other countries.

That said, the uncertainty around a Labour government and what it might or might not introduce isn’t helpful; it perhaps gives people who are on the fence a reason not to buy.

One also has to question just how much such a move will actually generate for the economy. What impact will it have on the average working man? When rich people come to the UK and buy houses in London or estates in the country, they employ a lot of staff, as well as tradespeople, buy a lot of furniture etc and spend a lot of money in the economy. If we stop them doing that, is it worth it in order to generate an extra 2 per cent in stamp duty which grabs the headlines?  Or is it just about appeasing the champagne socialists who live in Islington?

What Labour might not realise is that such policies have the potential to impact hard-working people in the UK.  It may turn out not to be a very sensible move at all but quite often it’s not about that – it’s about appeasing the liberal elite.

It’s a similar situation with the plan to impose VAT on school fees – it won’t affect the rich, it will just put pressure on the state system as those parents who are only just able to afford to put their children through private school suddenly can’t do so. And what’s the outcome? More children in the state system and suddenly the local school’s class size goes from 22 to 30. What good is that to anyone?

The reality is that a Labour government probably won’t have as much of an impact as we think but it would put pressure on the ‘wrong’ people and certainly not those it is trying to target in the first place.

It’s certainly a talking point for clients. Are they worried? At the moment it is all an unknown and if they ask us what the impact of a Labour government might be, we can’t answer the question for them – they have to take a punt for themselves”.

 

Many people will see a change as welcome…but there could be more punitive measures around multiple home ownership

Mark Pollack, Co-founding Director, Aston Chase

“What a Labour-led Government would mean for the UK’s prime property market would depend on what legislation comes with a change in government. Fundamentally, Kier Starmer is reasonably moderate and it feels like there is an understanding that it would be an ‘own goal’ to punitively tax properties that could result in some wealthy people choosing to leave London despite them having strong ties to the capital such as children’s schooling and healthcare provision.

However, if there were to be a Labour-led Government, it would be a culture change, and there will be anxiety with any change of government particularly after such a long Conservative Government rule. However, we have had such a volatile time with the current government, so many people will see a change as welcome.

I believe under a Labour Government there could be more punitive measures around multiple home ownership. Some sort of wealth / property tax seems like a possibility and this will affect Buy-To-Let investors and multiple home owners such as landlords the most. However, under Labour Governments, there always tend to be an upturn in regeneration project initiatives and new development zone allocations. For example the regeneration of Nine Elms, Battersea Power Station and Croydon were all kick-started under Labour governments.

Labour Governments, historically, are happy for more private sale homes to be built, especially in London, as long as this comes with ample social housing, leisure and community infrastructure provision. Both the Labour and Liberal parties are currently very critical of the Conservative party that not enough new homes are being built in London and the wider UK, and a focus on more housing provision can only be good for the property industry.

We are not yet seeing any impact at the moment on buyers and sellers. We are potentially still 18 months away from a general election, in 2024 it may become a hot topic but at the moment we feel we have just begun to  get over the effects of the mini budget and escalating interest rates, it would be nice to have a little bit of stability in the market for some time.

Also, especially in Prime Central London in locations such as St John’s Wood, Regent’s Park and Hampstead, the last 15 months have been a significant upturn in American families – both buying homes and renting. This is because of the exchange rate advantage, but also because the American real estate market has been so deeply depressed, so even if we have a change of political party, these overseas buyers and others from the Middle East and Asia are highly unlikely to “sell-up”.

Since the autumn mini budget it is only recently that we feel, perhaps as the weather is improving and spring has sprung, that despite interest rates going up, people have got used to the new terrain. There has been a period of inactivity resulting in pent-up demand but life goes on and people want to get on with things such as buying their new home.

Many of our recent sales are on properties that have been reduced in price – it has taken quite a long time for the market to get used to the new reality. Now that this has happened, and people have reduced prices, we are seeing a bit more of normality.

I am not sure that Labour is as such a terrible prospect for the property market as some view it, seeing as we have had a Conservative Government that has been so set on financial acumen and everything associated with that. So we are currently not as phased by this as we have been with other political issues”.

 

London will undoubtedly remain a desirable city for prime buyers

Toby Downes, London Specialist, Haringtons

“Of course, for many looking to buy or sell prime residential property in London, the prospect of a new Labour government does prompt concern. Higher stamp duty rates aimed at the International buyer combined with further measures being discussed could discourage purchasers and temper their appetite for the Capital. However, London has long been a favourite with overseas buyers whose interest remains strong most recently fuelled by the strength of dollar based currencies.

Regardless of the political agenda, safety, security, culture and a favourable time zone, ensure that London will undoubtedly remain a desirable city for prime buyers. Little surprise therefore that with fewer excellent properties available, impartial advice and buying expertise are today more crucial than ever”.

 

What the London property market needs is more affordable stock, not higher taxes

Camilla Dell, Managing Partner, Black Brick

“A Labour win isn’t going to have a positive impact on the super prime London property market. Labour want to increase tax on overseas buyers which is already at 15%, an extortionate amount. Most overseas buyers aren’t even competing with first time buyers as they are buying well above £1 million. What the London property market needs is more affordable stock, not higher taxes. Higher stamp duty will cause the market to stall meaning fewer transactions, but not necessarily huge price falls.

The last time stamp duty went up the London market fell pretty much in line with the increase. How much the market falls this time all depends on what the extra increase looks like. A 60% tax, such as what the Singapore government have brought in for overseas buyers, would be disastrous and would erode confidence in the market in London. Right now, most overseas buyers are unaware of the changes a Labour government would implement if elected but I imagine that will start to change as we get closer the GE”.

 

Those who really want to have a foothold in one of the pre-eminent cities in the world will still want to be here

Caspar Harvard Walls, Partner, Black Brick

“The changes to taxation on property over the last 10 years and in particular to stamp duty has had many impacts, one of them being that buying in London has to be for the medium to long term.

A change in Government might put off some buyers but Governments potentially change every five years and so those who really want to have a foothold in one of the pre-eminent cities in the world will still want to be here”.

 

Buyers and sellers are understandably craving political stability

Jimmy Waight, Regional Director, John D Wood & Co

“After the disastrous mini-Budget announcement in autumn 2022 which sent mortgage rates spiralling, and spread a cloud of uncertainty across the property market, buyers and sellers are understandably craving political stability.

The market has settled, and confidence has begun to return, however, we need our elected Government to take our housing policy with the seriousness it deserves.

There are serious challenges facing the UK’s housing market – from lack of affordable homes, and rising rents, to uncertainty around policy, such as the u-turn on the abolishment of the leasehold system – to name a few. It is abundantly clear that we need a long-term strategy to address these issues, which will create much needed improvement within the industry. Having had 6 housing ministers in the last 15 months, and 16 housing ministers over 13 years, it comes as no surprise that these issues are yet to be resolved.

Regardless of which party is in power and the merry-go-round of housing ministers, the prime London property market remains resilient and an upcoming election is unlikely to deter people who need to move home”.

 

Our current crisis is in development and construction

Ben Ridley, Director, Architecture for London

“A Labour government would result in shifts in housing policy that are likely to affect the prime property market. Labour intend to increase the stamp duty paid by foreign buyers of UK properties, thereby reducing demand from overseas buyers, this will have a cooling effect on value growth in the prime sector. Other proposed policies that may have a similar effect include: allowing only first-time buyers to be able to buy homes in a new development in the initial months of marketing, and limiting overseas buyers to 50% of units in any new development. The benefits of these policies will be meeting local housing needs first and potentially making properties more affordable to local buyers.

I feel that our current crisis is in development and construction. Site transactions and development activity are being paused due to the double-edged sword of high borrowing and construction costs, both arguably due to political decisions in recent history. I think over the next few years we will see an impact from this reduced supply of new homes in the prime sector – this reduction in supply may keep prime values buoyant despite the policies of a potential new government”.

 

If Labour pushes them too far, international investors will choose other cities to the detriment of the economy in London and UK as a whole

Dominic Agace, Chief Executive, Winkworth

“The outlook for prime markets looks more positive than it has for some time, with Brexit behind us and Labour taking a more centrist approach than they have in the past.  However, the housing market is in crisis, with rents rising rapidly recently after a sell-off by landlords in the face of tax changes. A lack of new homes being built is set to exacerbate structural supply and demand issues for the foreseeable future.  With these issues, housing has never been such a political issue. With that comes the dangers of over-intervention having unintended consequences that add to the problem rather than solve it.

In some ways both parties are now trying to occupy the same ground, competing for the votes of the first-time buyer and generation rent with proposed incentives for FTBs and further regulatory reform to support tenants. In many ways, a Conservative or a Labour government will have the same impact as they push through these agendas, as we start the countdown to the next election and the parties seek to win votes – with the housing market at the core of their pitch to the electorate.

The dangers are already here and it now depends whether a Labour government will exacerbate them. Support for first time buyers is a positive step, but without actual action on supply and planning reform, this will be a one hit wonder – with future first time buyers facing an even steeper challenge. The Conservatives have clearly defeated themselves by missing their housing targets. Labour have spotted this opportunity and are pushing their commitment to build new houses and council houses, which one can only hope they deliver if they come to power.

The big concern is the private rental sector where private landlords are starting to not see a future with rising costs of finance and tax changes meaning they pay tax on income they do not receive and their investments are underwater.  The issue is if they do sell off, then rents will rise further and competition will increase.  The answer to this is not rent caps. We have seen in Scotland how this will disincentivise investment in the sector by institutions or private landlords, affecting the availability for people who want to live near their workplaces. This is undermining the appeal of our cities as places to move for career reasons. In the case of London as a global business centre, international workers coming to the capital for work can’t find accommodation.  We need to encourage a healthy private rental sector to ensure that young people can live in cities, and not force them all into larger rental schemes without offering the choice of more central locations. We do need both options and responsible regulation to ensure a fair market place.

The other threat for prime markets is a stated intent to increase tax on overseas investors. We have seen in recent years that tax changes and economic credibility do affect buyer demand in prime markets. London needs to continue to be open and welcoming to overseas investors to continue to thrive. If Labour pushes them too far, international investors will choose other cities to the detriment of the economy in London and UK as a whole”.

 

A Mansion Tax as such still looks difficult, if not impossible to implement in an equitable way

Mark Parkinson, Managing Director, Middleton Advisors

“The short answer is we do not know as they have not published any policies. If a recent article citing a Labour think tank on possible/probable housing policy is correct, it seems to be more focussed on helping first-time and low-income buyers get on the ladder with government backed mortgages etc, rather than clobbering the owners and buyers of prime property. They did suggest further increased SDLT for foreign buyers, but it would be quite difficult to define a ‘foreign’ buyer given the very diverse nature of London as a city.

One question we are asked increasingly is about the threat of a Mansion Tax. This was a recurrent theme in the run up to the 2019 General Election and the thinking remains the same. There may well be increases in Council Tax at the higher end or indeed more Council Tax bands, but a Mansion Tax as such still looks difficult, if not impossible to implement in an equitable way”.

 

A new government could provide further stability

Jonathan Harris, Founder, Harris Associates

“London remains a safe harbour for investors, regardless of the government in power and despite economic concerns, we see reasons for optimism. The UK market exhibits relative resilience in the face of global instability and unpredictability, which is why it has and will continue to draw the appetite of international investors, including Asian capital. We see this demand through our international partnership with Edmund Tie.

As it stands, the local councils that are mostly Labour-led would suggest minimal market changes. On a macro level and looking back at Labour’s previous tenure, their investor-friendly approach and openness to immigrants bode well for business, hospitality, and real estate. With the market already showing signs of strength, a new government could provide further stability”.

 

There is a lot of pain coming for lots of people

Yasmin Ulhaq, Director and Founder, Glenfield Property Management

“As the general election approaches, housing plans have once again taken centre stage. The Conservative Party, in my opinion, has heavily focused on the Renters Reform Bill (RRB) as a key solution. However, I anticipate several challenges in its implementation. The RRB was initially discussed in 2019 but has faced delays due to uncertainty within the party. The legislation aims to abolish the section 21 notice, shift tenancies to periodic terms, and introduce new standards for the rental sector making it challenging for the private sector landlords.

Labour has shown support for rent controls, particularly in major cities. If implemented, this could potentially impact the rental market and, indirectly, the prime property market by affecting rental yields and returns on investment for landlords.  According to Nandy, the next Labour government will never treat renters like second-class citizens. What about Landlords? I believe both parties have totally misjudging the situation. By protecting tenants they are actually causing more hardship for them. This is going to increase rental prices making it harder for tenants to rent and subsequently landlords will leave the sector.  What about having some practical landlord incentives?

The global community of super prime buyers (anyone over the £5mn category) are more diluted now as other cities such as Dubai, Spain and Miami have entered the stage. London properties are set to have the most substantial fall in value during 2023.  Several signs have indicated towards the Labour party increasing the stamp duty paid by foreign buyers of UK property as well as limiting the sale of new build buyers overseas. Starmer wants to retain up to 70% allocation for UK buyers. Starmer is making an exception here by bashing the uber wealthy, especially those who claim non domicile status.

Speaking to some of our clients, their tax advisers are on the fence and are considering diverting their money elsewhere, potentially leaving a gap in the UK’s finances. Many landlords have decided to exit the rental market and invest in other funds. Will the government build the 300,000 homes it’s promised in time before we have another crisis on our hands. There is a lot of pain coming for lots of people”!

 

Targeting of ‘overseas’ buyers as a solution is problematic…and rather short-sighted

Vic Chhabria, Founder and CEO, London Real Estate Office

“The Labour party has already sent clear signs they are keen to limit non-dom buying activity with a second stamp duty surcharge and even sales restrictions on new build developments, which is significant to the prime property market. Of course, there is a need to make homeownership more accessible though this targeting of ‘overseas’ buyers as a solution is problematic and – dare I say it – rather short-sighted. Such a blanket approach to the UK’s entire market, and all people of so-called international status, doesn’t reflect the complexities and nuances within it and it’s hard to say whether such actions will really bring about the change that assists local and younger buyers. It also assumes international buyers are not active residents and contributors to the local communities and economies in which they live, from local businesses, schools, gyms, restaurants, bars and more. If the above would come into force, the Capital could lose out on foreign money that has historically been crucial to the UKs economy. This in turn could be a hit to our current political-economic climate and could result in worse outcomes, with little help to the audience it’s aimed at assisting.”

As it stands there is caution amongst both UK and overseas buyers but not worry. If a Labour Govt looks is imminent, it could potentially catapult London’s property market between now and the election as foreign buyers look to snap up homes in the Capital before any stamp duty surcharges and restrictions come into play”.

Buyer sought for 16,000 sq ft Hampstead mansion project

Agency lists rare plot of land across the road from Hampstead Golf Course with scope for new super-home.

A rare plot of land on north London’s Winnington Road has been put up for sale with scope for a new mega-mansion.

Mayfair-based agency Black Brick is quoting an asking price of £6.995mn for the 0.38 acre slice of Hampstead Garden Suburb, which currently houses a tennis court and a patch of grass.

 

The vision, however, is for an “elegant” 16,000 sq ft period-style residence with a full suite of leisure facilities.

Plans show four floors of accommodation, with two living rooms, a large kitchen overlooking the garden terrace, a dining room and a study. Six bedrooms would occupy the upper levels, with all the fun stuff down in the basement: a games room, gym, hair salon, massage room, swimming pool and Jacuzzi.

 

 

Consent is already in place for the transformation, said the firm, describing the instruction as “an intriguing prospect”.

Winnington Road, close to Hampstead Heath, is regarded as one of north London’s most prestigious addresses. The plot itself sits right across the road from Hampstead Golf Course.

The home improvements that could take thousands off your property price

It’s not just conservatories — bling kitchens, ginormous garden offices, and damp-inducing indoor pools and saunas, can all put off buyers.

By David Byers

The 1980s were a time of social and professional mobility — glass ceilings galore were smashed. At the same time British suburban families were putting up millions of their own glass ceilings at home, and these too should have been smashed.

Conservatories with glass and uPVC roofs and windows soared in popularity, but what those who installed them did not realise was they would heat up intolerably in summer and freeze in winter. Now Chris Hodgkinson, managing director of the House Buyer Bureau, said last month the presence of one could devalue your home by £15,000.

“Whether windows or conservatories, uPVC is regularly viewed as a nuisance and an immediate indication that a property has remained in stasis since the late Nineties and early Noughties,” Alexander Broadfoot, sales director at the estate agency Engel & Völkers, says.

However, poorly built conservatories are far from the only bad home investment. Agents say there are other disastrous forms of decor that typically devalue properties.

Indoor swimming pools

Where better to start than by having a pop at the choices made by our prime minister. In March it was revealed that Rishi Sunak had built a 40ft swimming pool at his house in Yorkshire, and his link to the electricity network had been upgraded to heat it. Sunak is far from alone. In recent years residents of mansions across the UK (from footballers in Barnet to billionaires in Cheshire) have installed indoor swimming pools, usually in basements — even Michael Heseltine’s grand old house in Belgravia has been landed with one by its new owner.

The only problem, say agents, is that indoor pools are often unattractive and unappealing because they have been bunged in dark rooms with no natural light. Not only are they rarely used, but they can cause problems with damp and cost a fortune to maintain — particularly at a time of high electricity bills. Experts say a lot of them fall into the more-money-than-sense category of home features.

“I went to a house recently where they had put in a pool in the basement five years ago and have school-age children. I asked who uses it and they said ‘no one’ despite it being heated, immaculate and with children’s toys everywhere,” says Christian Warman, a partner at Tedworth Property, an estate agency.

Marc Schneiderman, director at Arlington Residential, another agency, agrees: “They [indoor pools] have no added value. They’re generally considered unenjoyable to use, expensive to heat and, if not properly managed, can cause a bad odour through the property, as well as condensation problems.”

Simon Barry, head of new developments at Harrods Estates, says it has “always an issue selling an older house with a pool” and that many home owners end up draining them, leaving a huge hole in the ground. He urges these owners to refill them if they’re trying to sell the house to convince buyers that it is a useful space.

Remember when we were told the pandemic was heralding something called the “new normal”? Nobody knew what this meant but, for many of us, it was some element of social distancing, staycations and working from home. The prospect of the end of commuting left some white-collar workers far more excited than they should have been, while others were miserable at the prospect of being stuck in such close proximity to their young families for ever. For both of these groups the study/office in the garden was a must-have.

In the six months after the start of the first lockdown in March 2020 nearly one million homeowners splashed out on a garden office, according to the insurer Direct Line. If done tastefully they remain an attractive addition for would-be buyers, but there is a tipping point. Some of the WFH brigade went OTT and built for themselves home offices so large that they obliterated much of the garden.

“I was selling a large family home in Clapham [southwest London] that had a 40ft garden. Their children are teenagers so gardens are not as important, so they built a large home office/PlayStation room for the kids,” Kesha Foss-Smith, regional director at John D Wood & Co, an estate agency, says.

“This may have added value for them, but the people who are moving to this house have smaller children and therefore the outside space is more desirable. Every potential buyer felt they would need to take it down.”

These lockdown man cave builders lost sight of one crucial thing: how obsessed we Britons are with our gardens. An analysis by Savills about the relationship between garden size and house prices reveals that buyers are paying about £424,000 for an average 1,200 sq ft house (a typical three-bedroom home) with a large garden, compared to £260,000 for one with the smallest-sized garden.

“The value of private outdoor space is one of the pandemic’s legacy trends that has become permanently ingrained in the home buyer’s psyche,” Frances McDonald, director of residential research at Savills, says. All of which is fine if you haven’t ripped up loads of it to put in a man cave.

Flash kitchens

The concept of an open-plan kitchen has become a national obsession, bolstered by endless interiors shows and TV series hits such as Big Little Lies. The concept of a kitchen island dates back as far as 1956, when it was described as a tool of liberation for the housewife.

Most spacious, presentable and modern kitchens still add significant value to a property. But, as with man caves, if you’ve taken leave of your senses and knocked down all the walls in your home to construct a monster kitchen diner — often at the expense of anyone’s personal space — you’ll ultimately suffer for it.

“I have had clients rip out a brand-new kitchen that cost over £150,000 to put in in the first place because it was too bling. Kitchens and bathrooms are very personal,” Mark Lawson, a partner at the Buying Solution, says.

A key concern for some buyers is that those kitchens are so big they obliterate a house’s personal space. Magnet, a kitchen designer, found that 29 per cent of 2,000 house hunters said they would pay more for a home where the kitchen, dining room and lounge remained separate. However, two thirds of buyers said they would pay more for a property if the kitchen was newly modernised or refurbished. The trick is to use your common sense and think what looks stylish but is also useful.

Boys’ and girls’ toys

As Harry Enfield’s vulgar show-off character Loadsamoney satirised, flaunting your wealth could leave you with an unsellable house — or one where you have to accept a price drop. Agents say examples of Loadsamoney toys that nobody wants are saunas, steam rooms, golf simulators, bowling alleys and cinemas.

Part of this is cultural. “Buyers from different countries have different priorities. Russian buyers have always valued saunas and steam rooms as they are part of their culture, but for many UK buyers these are a waste of space in a confined London townhouse and will simply add to the cost of modernisation,” Barry says.

Lawson says that if you must install lots of mod cons around your home, make sure they’re high quality. “Fancy extras such as saunas, steam rooms, golf simulators and bowling alleys need to be the best, otherwise top-end buyers notice and realise it will cost to tear them out and replace them. More rurally, an overspend on stables and horse equipment at a property that is unlikely to attract an equestrian buyer is a mistake.”

Sometimes these extras are niche to the point where it’s vanishingly unlikely a prospective buyer will share your interests. Philip Harvey, senior partner at Property Vision, a buying agency for upmarket clients, says koi carp ponds are never a winner. “In 23 years I have never had a client who wanted to keep koi carp,” he says. “Equally I have yet to see a koi carp pond that is visually attractive, however beautiful the fish within it may be. It is seen as a liability that will be expensive to remove.”

Iceberg basements

For much of the first two decades of the century, streets in exclusive postcodes in west and central London were jam-packed with construction workers building basement conversions for billionaires who wanted subterranean snooker rooms, staff quarters, car parks and even underground nightclubs. The combined depth of all the basements carved out underneath the capital over the past decade would measure 50 times the height of the Shard, according to a study by Newcastle University.

The Ukrainian-born tycoon Leonard Blavatnik reportedly had one of the biggest and deepest basements built in Kensington Palace Gardens, including a multistorey car park. The Foxtons founder, Jon Hunt, won a ten-year planning battle to build a megabasement below his house in Kensington to hold his collection of classic cars.

And yet many experts say this feature won’t necessarily add value to properties — and, when done badly, can make them less attractive. “Basements by their nature are dark and have no windows, so you have to consider how that space will be used. For example, bedrooms cannot be designated or sold as a bedroom unless it has a window,” Camilla Dell, managing partner at Black Brick, a property buying agency, says.

“Some of the worst basements I’ve seen are multilevel ones. Space is often created for beauty salons, massage rooms, gyms — but the reality is these spaces are rarely used. Buyers do not place as much value in terms of price per square foot on basement space as they do on floors that are above ground. The differential can be as much as 50 per cent in the worst cases,” she says.

However, if a basement is done well it can add value. Broadfoot says that, executed correctly, “property elements involving planning permission add the most value — loft and basement conversions being the foremost examples”.

The thing to bear in mind when building features great or small is how tasteful and useful the space is that you’re building. For basements, Broadfoot says, the emphasis must be on building a practical and versatile space as well as ensuring there is natural light.

Meet the off-market agents trading trophy homes for the super-rich

Forget Zoopla — if you have serious money to spend, hire a private office

The property is a double-fronted, four-storey Victorian house with a south-facing garden. It may not look it, but it was one of the most expensive properties sold in the UK last year, with a valuation of £20 million. All the more remarkable when you learn that the buyer, the American investor J Russell DeLeon, was actually downsizing. He had bought a larger house nearby for a similar price some six months earlier, but that didn’t work out so he and his wife decided to buy this house, in Notting Hill, west London.

Neither property ever hit the open market, though. Both were quietly sold off-market — offered to potential buyers without the brochures and website listings traditionally associated with estate agents and house sales. Welcome to the hush-hush world of private offices, or so-called “black book” agencies, which are increasingly responsible for big ticket property deals and the purchase of trophy assets in the UK.

If you are in the market for a shooting estate in Scotland, a townhouse in central London or a villa in the south of France, you can employ a buying agent to find exactly what you want; the agent will scour their black books of selling agents and rich clients to find the perfect properties for you — and all without attracting the attention of the property portals (or nosey neighbours and business associates) with the agents often forced to sign non-disclosure agreements to ensure clients’ privacy.

Last year almost one in ten sellers in Britain sold their properties off-market. In London the figure was nearer one in four (22.3 per cent), and it is even higher (29 per cent) for properties worth £1 million or more, according to Hamptons International.

The man tasked with finding a suitable home for “Russ” DeLeon was Mark Hutton, co-founder and managing partner of the property consultancy Hutton Bubear. “They wanted to sell their house in Notting Hill, they then wanted to buy another, slightly smaller house in the same area,” Hutton says, without revealing why. As super-prime agents like to say, rich people make all sorts of choices simply “because they can”.

DeLeon made his wealth in online gambling — he founded PartyGaming, an online casino software company, with his ex-wife, Ruth Parasol. The company merged with its Austrian-based rival Bwin in a £2 billion deal that made DeLeon and Parasol very wealthy. DeLeon is now married to Kimberley Yoshimi, a cosmetic doctor.

Hutton says that the house they were selling was a seven-bedroom property spanning some 6,000 sq ft, while the one they bought is “probably 2,000 sq ft smaller”. He adds: “In capital terms they’re still big houses in Notting Hill and big sums are involved.”

Hutton was introduced to the DeLeons by a previous client, which he says is the norm in the discreet world of super-prime property. “Almost all our clients come through word of mouth,” he explains.

Hutton has been working in property for 23 years, mostly as an estate agent. Then, in 2015, he was put in charge of the residential phase of Battersea Power Station, before setting up the London office of Hutton Bubear in 2021. The consultancy launched a private office division a couple of years ago. Since then, Hutton says, his firm has worked on £300 million worth of deals.

“Some people like the discretion associated with it,” Hutton says. “Also what we found is that sometimes testing the waters very discreetly with an asset can allow us to gauge whether the price is in the right place or not.” Hutton says that at times the price can be “out of kilter to the market” and if a property has been on a portal like Rightmove or Zoopla a price reduction would leave a trace.

“Psychologically that sort of footprint can taint the marketing process — it can put some buyers off because they assume something must be wrong with [the property].” When it came to DeLeon’s new home, for example, he says that the asking price was £20 million but they managed to negotiate down to about £15 million.

Hutton is reluctant to divulge how many people, or who, is in his own black book: “It has been sort of ebb and flow, depending on who’s active. But especially at the top end of the market, I’d say, there’s not that many.”

Black books like those used by Hutton would include contacts at the large selling agencies such as Savills or Knight Frank, boutique agencies including Beauchamp Estates or Wetherell, private investors or developers — think Nick Candy or Vincent Tchenguiz — and foreign billionaire buyers such as the American hedge fund manager Ken Griffin or Sheikh Hamad bin Jassim bin Jaber al-Thani, the former prime minister of Qatar known as HBJ. Middle Eastern families from Saudi Arabia or the Emirates are also kept in the loop.

“Private banks, law and accountancy firms, family offices — it’s anyone and everyone working with ultra-high-net-worth individuals,” says Camilla Dell, managing partner and founder of the buying agency Black Brick, who adds that her database includes 300 buying agents who can be “cherry-picked” depending on the clients’ requirements.

Dell says that half of the deals she advised on last year were off-market, while so far this year the figure is at 55 per cent. “It’s a bit like a game of poker, sellers don’t like to show their cards,” she says. “Privacy, security and confidentiality have probably become more prevalent. There’s more wealth, and more millionaires and billionaires around who don’t want their properties to be advertised. Just for security reasons, having a floorplan online can be a huge risk and a great resource for burglars.”

Off-market sales can happen very quickly. At the end of last year Dell advised an American buyer on the purchase of a £8.75 million flat sold by the developer Nick Candy. The deal was finalised within a week.

It took Hutton about two weeks to find a buyer for DeLeon’s “old” Notting Hill house — an Englishman who works for a large American bank. Then another five or six weeks to negotiate terms. In the meantime they found their new property, knocked the price down and, because the house needed refurbishing, recommended architects and interior designers. Meanwhile DeLeon and his wife have moved to “a little” rental in Kensington while the works are carried out.

The mandate didn’t end there: Hutton says that they are now advising DeLeon on the purchase of an investment property in London, the sale of a chalet in Switzerland and finding a villa to rent in Ibiza. “You spend a lot of time with these clients and so you get to know them and other areas of their lives kind of come into the conversation. It’s just a case of being able to join the dots.”

Hutton is coy about fees, though. “We do charge a fee for our services, but some of these activities are not something we look at generating revenue from, they’re just additional parts of the business. The bigger firms probably charge between 2.5 and 3 per cent. We’re probably more competitive, but it’s case-by-case, and once it’s agreed with a client it obviously remains confidential.”

London stalling: inside the prime property stalemate

By Alexandra Goss

Many sellers refuse to cut prices and buyers wait it out as concerns over inflation, interest rates and the banking sector mount.

It’s a rainy Monday afternoon and Will Watson, a buying agent who sources expensive homes in London’s most exclusive areas, heads to a trendy hotel and restaurant in Marylebone to meet a potential client.

“He’s a member of a wealthy European family looking to spend £30mn-£40mn on a property in London,” says Watson, a partner at The Buying Solution. “His family office was advising him to buy in Switzerland or Italy but he sat with me in Chiltern Firehouse and the place was buzzing. He told me: ‘This is why I want to come to London. I may pay more in tax but life is for living.’”

Last year, sales of luxury homes in the UK capital were at their highest level for a long time — 605 properties sold for £5mn or more in 2022, according to estate agency Savills, more than any other year since at least 2006.

But by the beginning of this year, fears over the health of the global banking sector, the housing market and rising inflation had slowed the surge to a trickle. The number of properties sold in prime central London in the first quarter of 2023 was 29 per cent lower than the same period last year, according to LonRes, which tracks the city’s high-end market. At the same time, buyer demand has fallen in nearly every part of prime London since last summer, says the data company PropCast.

With spring traditionally the busiest buying season in central London, agents such as Watson are hoping for a flurry of sales in the post-Easter period. But with buyer sentiment down and many sellers still refusing to cut prices, the market may be stuck in a kind of stalemate.

One way to break the deadlock would be with an increase in international buyers — something many have anticipated since last year’s tumble in the value of the pound relative to the dollar. Earlier this year, John, a technology entrepreneur from New York, bought a house in Chelsea for just over £4mn. “I mainly wanted to own a property in London for the lifestyle but the purchase was currency-driven to a degree,” says John, who is in his early forties and did not wish to give his real name.

Although he missed out on the pound hitting an all-time low against the dollar in September, international buyers can still expect substantial savings on what they might have paid a few years ago. With demand hit by stamp duty increases and Brexit in recent years, the average price for a property in prime central London is currently 18 per cent below its peak in 2014. In dollar terms, it’s down 40 per cent, despite the pound rallying in recent weeks.

As pandemic-era travel restrictions eased, international buyers accounted for 39 per cent of sales in prime central London last year. This may be up on the year before but is still below the 2015-2019 average of 48 per cent, according to Hamptons estate agency.

Many overseas purchasers choose to buy without a mortgage — the attractiveness of which has naturally increased since interest rates rose rapidly last year. Savills says the proportion of cash buyers in the capital’s most exclusive postcodes has increased from 66 per cent in August 2022 to 74 per cent in the past six months — about on par with pre-pandemic levels. “During Covid, people were taking advantage of cheap debt, even if they didn’t necessarily need to borrow,” says Frances McDonald, director of residential research at Savills.

Now, however, buying with a mortgage is a “nightmare”, says Guy Bradshaw, managing director of UK Sotheby’s International Realty. “It’s taking so much longer and there are discrepancies and down-valuations [where the mortgage lender values a property at less than the buyer’s agreed offer price],” he says.

All this has meant that domestic buyers especially have become far more cautious. Some are redoing their sums and finding they have much smaller budgets — Watson says he has two clients who were both planning to spend £10mn on London property last year; but with mortgage rates now so much higher, they’ve slashed their budgets to about £6mn.

Buyers in general are becoming more circumspect, given that house prices are forecast to fall — Savills expects mainstream values to decline by 10 per cent this year while investment bank Nomura forecasts a 15 per cent fall by mid-2024. “We have lurched from one crisis to another and although the latest issues in the banking sector don’t directly impact London property, they affect sentiment and people’s investment portfolios,” says Camilla Dell, founder of the buying agency Black Brick. “If people are feeling less wealthy, they are going to be nervous.”

While estate agents say the so-called “best-in-class” properties are still attracting good levels of interest from buyers, analysis by Coutts bank suggests that 35 per cent of listings in prime London have undergone a price cut. Reductions are also getting bigger — the average discount in prime London is currently 8 per cent lower than its initial asking price; in July 2022, it was nearly 5 per cent, according to LonRes.

Some buyers are getting significant money off. Ashley Wilsdon, head of London at the buying agency Middleton Advisors, has just helped a client negotiate a £750,000 discount on a £5mn property in Chelsea being sold by a small developer who was highly leveraged and needed to sell quickly.

But in many cases, the discounts on offer aren’t high enough to tempt buyers. Sometimes, this is because they are baulking at properties that need work. “People are put off by both how long everything is taking and the fact some building costs have more than doubled since Covid,” says Guy Meacock, head of the London office of buying agency Prime Purchase.

More commonly, however, the issue is that many owners in prime parts of the capital haven’t benefited from the rampant house-price inflation their peers in other parts of the country have enjoyed over recent years and are refusing to reduce their prices, while estate agents have also overpriced properties in a bid to win business. “Lots of asking prices are completely unrealistic. Some properties at the top end are overpriced by millions,” says Watson.

Jo Eccles, founder of the property buying and management company Eccord, cites the example of a client who offered £3.2mn for a flat by the Thames in south-east London. “An identical flat sold just before Covid for £3.25mn, but the seller demanded £500,000 more and refused to budge. Like many London owners right now, they didn’t need to sell and it’s this discretionary nature of the market which is causing a pricing stand-off,” Eccles says.

Accountant Haj Abbas understands this only too well, having tried unsuccessfully to purchase a flat for about £1mn in Richmond, south-west London, for more than a year. “Properties are going on the market too high and staying there — I see the same ones online for months. Even if we put in a reasonable offer, it is rejected in favour of ‘waiting it out’ or deciding to let the property instead. We keep hearing that prices will fall nationally so don’t want to overpay, but we haven’t seen any evidence of that since we’ve been looking to buy,” Abbas, 33, says.

London’s prime outer postcodes have been some of the top performers over recent years, as buyers clamoured to buy houses during the Covid-era race for space. In Hampstead and Highgate, both in north London, Coutts says prices have increased 23 per cent since the pandemic began, while in Wandsworth, in the south-west of the capital, property prices rose 18 per cent between May 2020 and February 2023, according to Knight Frank estate agency.

Yet the rapid price rises mean some of these areas are now more vulnerable to falls compared with prime central London, and also because the south-west and west of the capital have a “larger proportion of highly leveraged [buyers]”, says McDonald.

Faced with this negative sentiment, many owners are choosing to keep their homes off mainstream portals such as Rightmove and Zoopla so that buyers can’t see how long the property has been on the market, or any price reductions. Invisible Homes, a website that matches buyers with “off-market” homes, reports that listings have quadrupled this year compared with the same period in 2022. Others who don’t need to sell urgently are holding off from selling altogether, a factor that is keeping prices from declining in nominal terms.

Tarnjeet Purewal hopes sentiment will improve in the coming months and he will finally find a buyer for his two-bedroom flat in a luxurious development overlooking the river Thames in Wandsworth, which he has been trying to sell on and off for the past 18 months.

The former real-estate lawyer and the founding director of Latitude Legal Recruitment has twice reduced the price of his flat — and now he simply hopes to get back what he paid for it in 2015. “We had quite a lot of interest last summer, but then came the ‘mini’ Budget and in the final three months of last year we didn’t have one viewing so took it off the market,” Purewal, 40, says. “The recent concerns over the banking sector are creating nervousness, but hopefully mortgage rates are levelling out and people will be keener to buy.”

Lots of asking prices are completely unrealistic. Some properties are overpriced by millions, Will Watson, buying agent.

While buyers wait it out, they are renting instead, adding to the unprecedented demand for rental homes. In February, LonRes says the number of new rental instructions in prime London was 49 per cent below its pre-pandemic average, while rents have risen 8 per cent over the past year and are now 19 per cent above pre-Covid levels.

For a one-bedroom flat in Pimlico, central London, Glenfield Property Management received 12 offers in 15 hours and agreed to let it for 26 per cent above the asking rent; in Mayfair, a two-bedroom property went for 18 per cent above the £3,000 per week asking amount. Of all the lets in Notting Hill, west London, that Strutt & Parker estate agency has agreed so far this year, 70 per cent attracted competing bids, with most going for more than the asking price.

“It’s incredibly competitive being a tenant in London right now,” says Nicholas Thao, 36, who works in finance and rents a two-bedroom apartment in Westminster. “You submit an offer and agents ask for best and finals within hours. Landlords are also asking for lump-sum payments.”

For the international super-rich, renting in London for a number of years may make financial sense — even at eye-watering prices — because stamp duty has risen so much, to a top marginal rate of 17 per cent, if they are an overseas buyer purchasing an additional home.

“We have seen the emergence of a new class of uber-renter paying £30,000-£40,000 per week,” says Trevor Abrahmsohn, managing director of north London estate agency Glentree International. “Even though they are paying up to £2mn a year in rent, this is less than the stamp duty, solicitor and estate agent fees which would be involved if they bought a multimillion-pound mansion in London and sold it a few years later.”

Back in the Chiltern Firehouse, time will tell whether Watson’s wealthy European client will opt to buy — or end up renting — that luxury London property.

Spring buying season begins with ‘more of a whimper than a bang’

London buying agents expect most of the action will be happening off-market in the coming weeks.

Buyers in prime London could be in for a frustrating few months ahead, as vendors shy away from listing openly in an uncertain market.

“The spring buying season has begun with more of a whimper than a bang this year,” according to buying agency Black Brick, citing reports from estate agents of lower levels of appraisals, compared to 2022.

At the same time, buyer demand appears to be holding up in the face of volatile economic conditions.

The Mayfair-based firm suggests part of the reason vendors aren’t getting round to listing their homes is the confluence of two major holidays: Easter Sunday falls on April 9th and Ramadan, the Muslim holy month, started on March 23th.

“There is certainly nothing coming up in the £3mn to £9mn flat market in central London at the moment,” said partner Caspar Harvard-Walls.

Increasing numbers of buyers are opting to sell off-market with no online presence, added managing partner Camilla Dell: “At the moment, because the market is a bit uncertain and unsure, sellers don’t necessarily want everyone to know what their asking price is,” she said. “I use the analogy of a game of poker, where you want to keep your cards close to your chest.”

The proportion of off-market deals struck by the firm on behalf of its clients has risen from around 40% to 55% since 2021.

Sloane Square-based buying buying agency Eccord also suggests open-market stock levels will remain “constrained” over the coming weeks, resulting in fierce competition for the most desirable homes.

Appetite for best-in-class, turnkey family houses in central London appears undimmed by events in the wider economy, said the firm, citing drivers including the new academic year or where clients have had a “wealth event” and are ready to move further up the ladder.

The team reports having a number of new buyers lined up to start their search after the Easter break, although some discretionary purchasers are “moving to the sidelines for the time being…waiting to see if prices soften”.

Those seeking to capitalise on the recent turmoil are likely to be disappointed, however. “In our experience of other volatile times and banking sector job losses, high net worth homeowners are more likely to heavily rein in lifestyle-driven discretionary spending, such as personal training and ski holidays, before selling their family home,” said the firm.

Jo Eccles, MD, Eccord: “For the best – and sensibly priced – houses, some are going under offer after the first viewing. We have just agreed the purchase of a family house for a client searching across Fulham, Putney and Chiswick and the speed and strength of competition was particularly evident in these areas.

“Buyers across all price brackets face two key challenges. Firstly, in finding high quality properties in a fragmented and undersupplied market, and secondly, in negotiating a fair and realistic price based on sound comparables.

“The discretionary nature of many prime central London sellers means the gulf between buyer and seller expectations can be difficult to bridge, with sellers holding out for unrealistic prices that often don’t stand up to scrutiny or comparable evidence.”

The firm has a number of new buyers lined up to start their search after the Easter break, although some discretionary purchasers are ‘moving to the sidelines for the time being’

The investor market could be one to watch, however. Eccord reports how increasing numbers of landlords – hit by rising costs and unexciting yields – are seeking sales valuations with a view to exiting the sector…

“A number of our buy to let landlords who acquired their properties after the peak of the market in 2014 are reluctantly considering the prospect of exiting at a loss and are seeking valuations with a view to selling in the next 12 – 24 months.

“Landlords remain very cost conscious, having faced over the winter months rising repair costs, issues with damp and mould – caused by high utility bills and tenants opening their windows less – and greater demands from tenants who are spending more time at home and have higher expectations for the smooth running of their rental property.

“Landlords are also conscious of looming energy efficiency regulation that will require them to achieve an EPC ‘C’ rating by 2025 in order to let their property to new tenants. Many will face significant expenditure on upgrades to bring it up to the required standard, and those owning listed properties face an even greater challenge.

“Net yields remain low and with little prospect of meaningful capital growth over the next three years, landlords are re-evaluating and deciding whether to reduce and consolidate their portfolios when existing tenancy agreements expire.”

Creative ways to live with an ex-partner — if you can’t afford to move out

By Zoe Dare Hall

Colour-coding stairways and separate wings: rising living costs are trapping divorcees under one roof

Sara*, a company director from east London, is relieved to be able to make her next property move thanks to the Bank of Mum and Dad — or just mum, in her case. Sara is no twentysomething trying to get her first foot on the ladder. She’s a 45-year-old in the throes of divorce. And her mother, aged 77, is providing the finance that will enable her to keep her three-bedroom terraced house where she lives with her two children.

“My mum has been helping me with legal costs, keeping up with mortgage payments, a bit of extra money for the kids. She downsized recently and has given me access to about £350,000 so that I can buy out my ex-husband,” Sara explains.

She is far from alone in needing elderly parents to help to fund her divorce. Since no-fault divorces were introduced in England and Wales last April, removing the need for separating couples to play the blame game or stay together for two years until they can start divorce proceedings, 2023 is set to herald a 23 per cent spike in the divorce rate — the biggest rise in more than 50 years, the global professional services company PwC predicts.

But in a climate of rising living costs, the emotions involved in moving on may pale in comparison with the financial reality of starting again as a single person. More than a third of couples considering divorce will stay together due to the cost of living crisis, according to research by the law firm Stowe Family Law. Meanwhile, a recent survey by the property portal Zoopla found that 34 per cent of couples who co-own a home with their partner and then split up are forced to continue to live together for 1.3 years on average because they can’t afford their own property.

Selling the family home, however, is rarely the most cost-efficient strategy, says Kate Daly, co-founder of Amicable, a divorce advisory service. “It means selling costs and two lots of buying costs. I’m seeing lots of cases of the Bank of Mum and Dad where the parents are in their eighties and their children are in their fifties, [and the former are] stepping in to allow their children to stay in the property.”

Other separating couples are finding innovative ways of dividing their property to accommodate two lifestyles. Laura Mortimer, a family lawyer at BP Collins Solicitors, mentions a client in her sixties who still lives with her ex — and his long-term partner — in separate areas of the house.

Unable to sell their high-end listed Buckinghamshire property for a price that works for them — “both parties are retired, it’s their sole asset and there’s no other sensible option that isn’t financially punitive to both of them,” Mortimer explains — they have redrawn the floorplan. “We worked out which rooms, staircases and entrances each party would solely use and colour-coded them to help them avoid crossing paths with each other and any guests or new partners,” Mortimer says.

“They don’t see it as a permanent solution but my client feels an obligation to her adult children to preserve as much of the marital wealth as they can pass on to the next generation,” she adds. “They’ve had to agree on a range of practicalities, including their contributions to the bills, and promise each other not to go into the other person’s ‘section’ of the house when they are not in.”

Anto Clay of the search agent Stacks Property Search, in Monmouthshire, thinks that tricky as such arrangements are, they will become more common in a climate of rising selling, buying and living costs. He mentions examples of divorcing couples trying to share the family home. “One couple split the home so that they each had a bedroom, bathroom and living space, but they continued to share a kitchen and would all eat together when the children were at home. They continued with the set-up for decades after they divorced.”

Some divorcing couples agree to delay the sale of the property until, say, the children leave home — an arrangement known as a Mesher order. “We’re seeing more of this as people can’t afford to buy out their ex-partner and they are scared to remortgage in case the renewal rate is higher. Unless they are in a desperate or crisis situation, people are trying to sit still,” Daly says.

Others find the answer lies in nesting, where the children stay in the family home and the parents take it in turns to live there. Angela Rayner, deputy leader of the Labour Party, revealed recently that her husband, whom she is divorcing, lives in their Manchester home with their sons while she is in London and she takes his place from Thursdays to Sundays.

Nesting comes with its complexities and the high costs of maintaining multiple homes. It calls for tolerant new partners too. But it worked for Toby Hazlewood, a 47-year-old cyber security project manager, when he and his ex-wife separated in 2006, when their daughters were aged six and three.

For the first decade each parent rented a home in Sale, Greater Manchester — Hazlewood’s rent was £750 a month — where they would each live with the girls every other week. Their flats sat empty on alternate weeks when they returned to their new spouses and family lives.

“We decided to explore nesting as a way of cutting costs and to ease the constant moving back and forth for our daughters,” Hazlewood says. “It seemed logical to have one home with a spare room for the ‘parent of the week’, and each of us would move in and out for alternate weeks.”

The ex-couple rented a three-bedroom flat that they would each use, and split the bills. “It required a lot of compromise but it worked because it put the kids’ needs to the fore and it helped us to cut our costs too, by about £500 a month between us, which eased the pressure for each of us in our lives away from the kids,” Hazlewood adds.

No level of wealth, of course, is immune to the upheaval of divorce. While Blackpool, where the average house price is £143,000, has the highest rate of divorce (43 per cent) in the country — according to research by Savills estate agency — Craig Fuller, a buying agent at Stacks Property Search in the Cotswolds, says 40 per cent of the high-end country houses he deals with that are coming on to the market are due to divorce. “Some of them have had a huge amount of money spent on them to make them ‘for ever homes’,” he says. “Property transactions with vendors who are going their separate ways can be tricky as there is often some disagreement on price and/or timing and buyers need to tread carefully.”

The super-rich, though, have their distinct ways of handling matters. Camilla Dell, managing partner at the buying agency Black Brick, found herself looking for £50 million houses for one divorcing wife, then preparing her for court “so she understood the property market and running costs better and was prepared for cross-examination,” Dell says.

Jo Eccles, founder of Eccord, a prime London buying agency, deals with the kind of divorcees who are looking for rental properties in Belgravia with space for their children, nannies and a chef. “Space for staff is something that high-net-worth divorcees aren’t willing to relinquish as their support network becomes even more precious and they want to keep things as normal as possible for the children,” she says.

Eccles adds that another of her clients, who won joint custody of his four children, wanted a family home within easy reach “by Tube, foot or chauffeur” of their four schools and good access to Farnborough airport — which has a private terminal — in Hampshire for himself. She says: “We rented a beautiful house in Kensington for him for £50,000 a month.”

How to negotiate buying a house for a fair price

Most house hunters have a wish list – it might be all about location, it might have to be immaculate and turnkey, or the standard of local schools might be the key issue.

But the one thing all buyers want to avoid is overpaying. They want the perfect property, and they want to secure it for a good price.

Getting a good deal on a house means doing plenty of research, and it requires delicate negotiation skills, a strong nerve, and plenty of diplomacy.

In this guide Black Brick explains how to decide what to offer for a property, how to negotiate a house price, and how to renegotiate if a survey throws a spanner in the works.

The price is right

According to the latest research (February 2023) by house price analyst LonRes prime London buyers pay, on average, eight per cent less than a property’s asking price. This proves that there is often substantial wiggle room between what a vendor would like for a property and what they will be willing to accept.

Understanding where to pitch an offer is a fine art that needs to be based on very solid knowledge of what similar properties have sold for recently. By recently, we are talking the last six months. And by similar we mean not simply in the same neighbourhood and roughly the same size. London’s property market is highly nuanced, prices vary between floors within the same building and between one side of a street and another. You need to harness this local knowledge to understand how much a property is really worth.

Other factors to consider include how much demand there is in the market, and the circumstances of your vendor. It is always worth finding out how long a property has been on sale for, whether the vendor has a set time frame in which to move, and whether they have found a property they wish to buy.

Don’t burn your bridges

In a slower market some buyers are tempted to make a cheeky lowball offer. This approach can often backfire, particularly in London where forced sales are a rarity. Vendors – and their estate agents – may dismiss you as an unrealistic chancer. A sensible offer backed up by evidence is a far more professional and persuasive approach.

Don’t get carried away

During the pandemic many buyers found themselves engaged in bidding wars to secure the most sought after homes. Many later regretted paying over the odds in a moment of collective madness. Once you have decided what you are prepared to bid on a property then stick to your guns – unless money really is no object – because some vendors have unrealistic expectations and are in absolutely no rush to sell.

Invest in help

Yes, you can go it alone when buying a home but unless you are very confident in your market savvy, and very familiar with the area you intend to move to, it can be a recipe for overpaying.

Estate agents work for vendors, not buyers, and although they should answer straight questions honestly it is in their interests to gloss over issues and encourage high ball offers. A buying agent could stop you making costly mistakes, help negotiate discounts on asking price, and make sure deals go through.

Renegotiating house price after a survey

Your original offer on a property is not legally binding until contracts have been exchanged. Before that you will want to commission a survey to make sure that there are no hidden, and expensive, problems to deal with.

Very few properties are entirely perfect. It is normal for a survey to show up small maintenance matters. But if it reveals serious structural problems – for example subsidence, dry rot, or a roof in need of imminent replacement – it is perfectly normal to go back to your vendor and renegotiate.

The first step is to get contractor quotes to prove how much the work will cost to undertake.

Then you – or your buying agent – will discuss the issues with the estate agent. Sometimes a vendor will agree to make good the works to bring the property up to scratch before you buy. Alternatively, you may be able to come to an agreement to reduce your offer to cover some, or all, of the cost of carrying out the work later.

Renegotiating house price after an offer has been accepted

If you have second thoughts about an offer after it has been accepted you could attempt to renegotiate a lower price – a practice known as gazundering.

Clearly this strategy is not going to please your vendor.

But it does happen, and it is perfectly legal.

A recent survey carried out by quick-sale company House Buying Bureau found that one in three vendors claim to have been gazundered recently.

Sometimes their original offer was reduced because either a survey threw up problems, or because a buyer’s mortgage company valued the property at less than they had offered.

However some vendors suspect their buyer was simply trying to hold them to ransom, in the hopes they would take a lower offer simply because they wouldn’t want to start the sales process from the beginning again.

But attempting to renegotiate without a very compelling reason for doing so is a high risk strategy. Particularly in prime London where vendors tend to be highly discretionary and in no rush to sell if they feel like they could do better elsewhere.

Thinking about your property in the long term

Smart buyers future proof their investment by buying a property they can envisage living in for the medium to long term. That way they can sit out ups and downs in the property market, content in the knowledge that the underlying trajectory of house prices in London is an upward one, while minimising buying costs. This means thinking carefully not only about what you need now, but what might become important to you in the future, like proximity to good schools and outside space, and room for a family which may expand.

Buying costs have certainly reshaped the way we live in the UK. In 1988 people would sell up and move house every 8.6 years. Today they stay in a home for an average of 23 years, according to a recent study by Zoopla and Hometrack.

Things to know when buying UK property

If you’re an international buyer interested in UK property, it can sometimes be hard to know where to start.

While there are no legal restrictions on foreigners buying property in the UK, there are still many hurdles to negotiate before you can seal the deal. Below you’ll find some useful insights on the key issues and what to expect during the property-buying process, as well as the potential pitfalls you might encounter.

1. Estate agent vs. buying agent – who to use?

Once you’ve worked out budgets and researched chosen areas, it’s time to start looking for properties. In addition to a number of property websites, the first port of call is usually an estate agent, who can show you around available properties for sale. Alternatively, you could use a buying agent, who will work on your behalf to find the right property for you and negotiate on price.

In the UK, it’s standard practice for sellers to hire estate agents – who will market their properties and facilitate the sale, acting as the go-between for any buyers and the property owner in the transaction process.

There is, however, one fundamental difference between buying agents and estate agents, says Jeremy McGivern, Founder of Mercury Homesearch, a central London buying agent.

“The estate agent is paid by the seller and is legally obliged to achieve the highest price or best terms possible – conversely, the buying agent is paid by the buyer,” he says. “Buying agents are also there to protect a buyer’s best interests and give access to the entire market. And they’re able to source off-market properties, give objective advice on valuations and negotiate the lowest price and best terms possible.”

Yet both have important, and complementary, roles to play in the home-buying process.

“People often use buying agents if they’re based abroad and struggling to get over to the UK for viewings, or don’t have huge knowledge of the areas they want to buy in,” says Richard Gutteridge, Co-Head of Prime Central London at estate agent Savills.

“Buying agents will hold your hand through the whole process. But equally, an estate agent also plays a key role for the buyer. They can steer you through and manage some of the expectations of the seller.”

Camilla Dell, Founder of central London buying agency, Black Brick, goes further: “Clients of buying agents are often seen by estate agents as more committed – they’ve already paid an up-front registration fee and gone through ‘know-your-customer’ procedures – most buyers do not do that unless they are serious about buying.”

2. The bidding process

Most UK properties are listed for sale by estate agents who quote an asking price. If you want to bid for a property, this is the time to negotiate on price – it’s not uncommon for people to offer below the asking price on a first bid.

“When making a bid, you need to have a good understanding of the value of a property – and what would be a sensible price to pay,” says Dell at Black Brick. “That’s hard to do without a buying agent advising you. We collate comparable sales data and carry out due diligence on the seller before making offers. When negotiations fail, it’s usually because people assume properties should sell for a certain percentage below an asking price.

“But there’s no rule of thumb, and every deal is different. It’s also worth noting that estate agents will soon get bored dealing with people who just bid far below an asking price.”

Bids can also fail because buyers focus on the wrong thing.

“One of the biggest mistakes buyers can make is they fixate on price per square foot comparisons,” says McGivern at Mercury Homesearch. “While it can be a useful way to get a general value, you shouldn’t rely on it to determine the true value of a property – as it’s such a blunt instrument.

“House price negotiation can be tricky at the best of times – especially knowing you could lose out on your ideal property. But there are far more important factors that you need to consider when negotiating otherwise you will not achieve the lowest price or best terms possible.”

There is no best way to make a bid, but buyers should be decisive and be prepared to act quickly if they see a property that they like.

“Before you even start looking for properties, you need to make sure you’re in a position to move swiftly – otherwise you risk missing out on opportunities,” says Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank.

“That means speaking to your tax advisers, instructing solicitors and certainly having spoken to your financiers – whether you are a cash buyer, or looking to arrange leverage.”

A seller can also legally pull out of any deal right up until ‘exchange of contracts’ (the moment a sale becomes legally binding), even after building surveys have been paid for by the buyer and completion dates agreed.

“It’s totally down to the discretion of the seller if the buyer is taking too long, or if they want to ‘change horse’ and accept a higher new bid,” says Gutteridge at Savills. “And while changing buyer so late in the process – or gazumping – is not the estate agent’s choice, if a seller is presented with an enormously higher offer, it’s their prerogative whether they accept it or not. I call it their house rules.”

3. Tax considerations

The key tax to consider when buying UK property is the stamp duty land tax (SDLT), which is paid on purchase in England and Northern Ireland. Scotland and Wales have their own systems, but they work in broadly similar ways.

No stamp duty is due on the first £250,000 of a property providing it’s your main residence (although the threshold is £425,000 for first-time buyers)1. The SDLT is also a progressive tax so the more expensive the property, the more stamp duty you’ll need to pay. For example, on a £5 million property you would attract stamp duty of just over £500,000 on your main residence. You will also need to pay higher rates of SDLT on buy-to-let and second home purchases.

Council tax is also collected by local authorities for the period you own the property. While you could also be liable to pay capital gains tax on the profits made on its eventual sale, especially if it’s a second home or you’re a non-UK resident. And there’s also inheritance tax to consider if the owner of a property dies whilst owning it.

While this is far from a definitive list, it’s certainly a complex situation – with differing laws applied to permanent UK residents, those with ‘non-dom’ status or people who are classified for tax purposes as non-resident individuals.

4. Leasehold vs. freehold

Leasehold and freehold are the two main ways of owning a property in the UK. Freeholds are typically associated with houses, while leaseholds are for flats.

When you buy freehold, you own both the property and the land it sits on. You’re responsible for maintenance and can make alterations to the property, subject to any planning permissions required.

With leasehold, you own a lease – and are responsible for everything within the four walls of your flat – but you’re unlikely to be allowed to make any structural changes without the consent of the landlord, also known as the freeholder. Leaseholders are usually required to pay an annual service charge for things like maintenance and upkeep of the property, in particular the communal areas.

A lease is normally for a period of 99 or 125 years, when first granted. But as the years go by, leases reduce in length and value – anything below 80 years is considered a short lease and can be more difficult to get a mortgage on. That’s why leasehold properties – especially ones with shorter leases – are usually cheaper to buy because of the risks involved. It is, however, possible to extend a lease for a fee.

“A lot of international buyers are instantly put off by the idea of leasehold, which seems at first like glorified rent and which can dramatically narrow their choice of properties unnecessarily,” says McGivern at Mercury Homesearch.

Dell at Black Brick agrees: “As a buyer, you shouldn’t be scared about buying a leasehold property, especially if you’re buying in London as you’ll be missing out on huge swathes of the market. We spend time educating our clients on how leases work – that they are robust, and they do protect tenants, and you have a legal right to extend your lease after two years of ownership.”

5. Planning permissions and building surveys

Many people buy properties with plans to renovate and develop them. But it’s prudent to work out what you can and can’t do before putting in an offer.

While most internal works and some basic house extensions are allowed without planning permission (they are classed as permitted developments), there are however far stricter rules governing flats, as well as homes in conservation areas and listed buildings. For instance, you may even need consent just to fit a new kitchen in a listed building.

“All properties can be renovated, but not necessarily in the way that you want,” says McGivern at Mercury Homesearch. “Planning permission is never certain, so you should always check with building specialists, architects or even the local authority before you put a bid in to get a sense of whether it’s likely to be granted or denied.

“But the strict laws shouldn’t dissuade you from buying listed buildings or in conservation areas. You just need specialist advice to ensure what you want to do is possible. Because if you do alter something you’re not allowed to, you’ll only get yourself into trouble down the line – and you’ll struggle to sell that property unless you put things back to how they were.”

When it comes to surveys, there’s no legal requirement to have a survey on a property you want to buy. But most buyers take one out, opting for the more detailed inspections, especially on higher-value properties – to get a full health check on what could be your most expensive asset.

Surveys can flag up hidden issues, bringing you peace of mind knowing there are no hidden surprises. Negative findings can also be used to negotiate on price.

The best buying agents for prime property in 2023

By Spear’s

Welcome to the Spear’s ranking of the best prime property buying agents, part of the Spear’s Property Index in association with One Green Way, for high-net-worth individuals.

We are delighted that three members of the Black Brick team have been included in highly competitive and coveted Spears ranking for “Best Buying Agents for Prime Property in 2023”.

Managing Partner Camilla Dell is listed as a “Top Flight” buying agent; Caspar Harvard-Walls is “Top Recommended” and Tom Kain is “Recommended”.

Division and optimism in the Spear’s Property Survey 2023

The 2023 Spear’s property survey uncovers a divided but optimistic sector of the market

The hundreds of prime and super-prime property experts ranked and profiled on spears500.com cover the most desirable postcodes from Mayfair to Muscat and, between them, know every detail of the market in countries all over the world.

The Spear’s research unit tapped into this deep resource of knowledge to get an idea of how the most rarefied reaches of the property market have changed – and how conditions may soon evolve.

It has been a time of great change for the housing market in the past few months, as a more than a decade-long period of extremely low interest rates finally came to an end. Suddenly everyone is talking about how the market will move. ‘I’ve spoken to more financial journalists in the last month than I did in the previous year,’ one adviser told us.

Even slowly rising interest rates would have been big news, but Liz Truss and Kwasi Kwarteng’s short-lived but tumultuous regime saw borrowing markets blow up after then chancellor Kwarteng’s financial statement promised increased spending with no corresponding increase in government revenue. Trussonomics swiftly unravelled, and the clean-up job was left to Rishi Sunak and Jeremy Hunt.

The prime property market is often said to be insulated from the daily swings of the larger economy. It rests on a relatively small number of transactions carried out by people who have greater assets and more disposable income – but dramatic changes such as the political decisions of the second half of 2022 or major geopolitical shifts can still move the needle.

With this in mind, we asked our panel of advisers a general question: which way do you see property prices moving? Opinion was almost perfectly divided:

Property experts are split on how prime property prices will change next year

Which way do you see prime property prices moving in 2023 in your key market?

Our respondents come from a number of markets, but only one – Dubai – was unanimous in its belief that property would be worth more in 12 months than it is now. Everywhere else, across different functions of the industry from buying and selling to mortgage advice and property law, presented an even split between rises, falls and stasis. This market is clearly in a position of flux and uncertainty.

Spread Betting

Following up on our general question about the direction of the market, we asked for a more specific prediction of how far it would travel. Again, there was very little agreement to be found among the answers we received:

Property experts are divided on what next year’s market will bring

By how much do you think prime prime property prices will move in your key market?

Among those who thought prices would rise, opinion was widely spread, but the most commonly predicted price-rise bracket was 2-4 per cent. This is close to the average figure across the UK of 4.3 per cent per year for the past decade, but well down on the 12.6 per cent boom achieved in the 12 months to October 2022.

No one thought that level of increases would continue, although a small, optimistic few thought it could come close. Those who thought prices would fall were almost entirely within the 2-6 per cent range. That would be a much bigger loss than the momentary dips of 2011 and 2012, but a lot smaller than the fall of more than 15 per cent seen in 2009 as the financial crisis hit home.

Adrian Anderson of private client mortgage broker Anderson Harris observed that mortgage affordability still has an effect on the higher end of the property market.

‘A lot of people think that the wealthy don’t bother with a mortgage, but a lot of them do need one to get to where they want to be,’ he said.

‘Or they may not necessarily need it, but they like to use other people’s money. They like to have something on one side of the balance sheet and one thing on the other. It’s highly profitable for the banks to be lending against property because it’s securitised; the banks want to lend and people still want to borrow.’

Anderson has seen many clients switch to variable tracker mortgages, betting that rates will soon fall. Fixed-rate mortgages are currently priced based on assumptions made when government borrowing was less prudent, and some HNW borrowers think they will fall more quickly than anticipated.

Others are choosing to pay off all or significant portions of their loans, and HNW but not UHNW clients might choose to borrow less in the first place.

‘Sometimes the bank will take that decision for them, and sometimes the people who were going to take that mortgage will just decide, “Maybe I won’t get a mortgage of £3 million that’s going to cost so much; maybe I’ll just take one of £2 million or £2.5 million,”’ said Anderson.

‘And I think that will have an impact on house prices, because if people are not prepared to go buying at the level that they were, they will take a more modest mortgage. And I think that if other

people take a similar view, there could be a correction in property values.’

However, he added: ‘This is only some people – some will still go up as high as they can.’

 

Back to business for prime property market

For any agent, the average price of deals is important, but the number of those deals usually makes more difference to their bottom line over the year. We asked if our respondents expected to see more or fewer completions this year. Opinion was still divided:

The uncertainty of 2022 is coming to an end, and the development difficulties of Covid are starting to work out of the system, according to some of the more bullish experts that we surveyed.

Keir Waddell of Strutt & Parker said: ‘The super-prime new build market will continue to go from strength to strength as we start to see the completion of key developments such as The OWO and Peninsula Residences among others.

‘We expect to see a flurry of activity around the completion of key developments in the market next year. This, I believe, will have a material impact on transaction volumes and price growth in the second half of 2023.’

Many agents reported a record year in 2021 as the worst of the lockdowns eased and the pent-up demand around changes of life to accommodate home working and a desire to occupy a little more space was satisfied with moves to the country near big cities. That, in turn, led to a slower 2022 and now, many expect, a busier 2023.

One factor of 2022 that led to a great deal of change in London’s market especially was Russia’s invasion of Ukraine, leading to sanctions being imposed on some of the city’s wealthiest international residents and a freezing of assets. Big property deals were halted overnight. We asked if the Russia/Ukraine conflict had affected the advisers’ business, and the answer was a clear ‘yes’:

 

Over half of property experts say the Ukraine conflict has affected their property markets

Has the Russia/Ukraine conflict affected your key market?

Country house consultant Philip Eddell had a one-word answer when asked for further comments on the situation: ‘Sanctions!’

Joe Rai of off-market specialist Devlin McGregor noted that he hadn’t had any Russian clients at all recently – and would normally have had several. The same was true for Waddell.

Others were less convinced of Russian buyers’ importance to London. Camilla Dell of London buying agency Black Brick said: ‘Russians haven’t been a dominant force in prime central London for quite some time and have largely been overtaken by buyers from the US, Middle East and Asia.’

Dominic Wertheimer of central London property manager Lornham noted: ‘Yes, there were notable oligarchs in the prime central London market, but they did not purchase further down the market so their position as market makers has been overstated in the media.’

A number of people argued that the strength of the pound against the dollar makes British property a very attractive prospect for US buyers at the moment, meanwhile.

 

Key Pillars of the 2023 property market

Giving our advisers the chance to play prime minister, we finally asked them what would make the most difference to their market. The great majority agreed that there are three primary pillars to property: economic growth, stamp duty and interest rates.

Almost three-quarters of our respondents told us that improvements in one of those areas would help their business:

Property experts say economic growth is key to improving the property market

What would improve the functioning of the prime property industry/market from your point of view?

Of those who responded ‘other’, suggestions included global security as prime markets are international in their nature, and greater access to combined selling forums, which it was hoped would result in a more equal opportunity and free market for all players.

Despite being at odds on some subjects, our respondents agreed that prime property remains an attractive prospect for all HNW buyers.

Camilla Dell noted: ‘There is a flight to quality for the best assets in the best addresses, which will continue into 2023. A similar pattern emerged during the financial crisis – when markets globally are not doing well, high-net-worths are drawn to real assets and best-in-class assets that hold their value.’

Even discounting the investment value of prime houses in cities and the countryside, people who have resources to spend will always want to live in places that offer beauty, comfort, security and prestige.

The Spear’s panel of property advisers is expecting to spend their year assisting increasing numbers of people to achieve that goal and will report back at the beginning of 2024.

International Women’s Day 2023: Wisdom & career advice from inspirational real estate leaders

By PrimeResi Editor

Marking International Women’s Day, a global day celebrating the social, economic, cultural, and political achievements of women, PrimeResi speaks to female leaders from across the resi industry – including design, agency, marketing and development – to discuss their careers to date, proudest moments, and where they find inspiration…

‘I feel that being a woman in property is a super-power’

As we mark International Women’s Day 2023, PrimeResi asks leaders from across the property sector to share their inspirational career stories, and favourite words of wisdom…

 

Liza-Jane Kelly, Head of London Residential at Savills

My property career wouldn’t be what it is today without embracing the day-to-day challenges the job brings. Every day is different and all the more rewarding for the variety. A positive mindset will enable you to recognise the inevitable mistakes as an opportunity to learn, essential to successfully navigating your professional journey. Having an optimistic outlook will also lift and encourage your team.

You become more accomplished and capable through your capacity to learn. Whatever stage you are at in your career, there is an opportunity to learn from your colleagues, others around you and life’s rich tapestry of experiences. It can require courage to step outside your comfort zone but often it is in making that step you learn the most, grow your confidence and find the greatest rewards.

Having a mentor to bounce ideas off is a great way to grow professionally. I have found mentoring others equally rewarding. While I believe it’s important to give back, I have received huge benefit form mentoring within my industry and beyond, which often provides a trove of fresh ideas.

It’s important to have empathy as a leader and to spend time listening to your teams. I regularly visit our offices across London which provides valuable local insights and a proper understanding of the challenges they face.

Be really organised and create structure. If you are organised and plan ahead both at home and at work, it enables you to be really focused and prioritise important tasks.

No matter how busy you are at work, it’s important to take time for yourself and do things that energise and inspire you. Despite the obvious hurdles I exercise in the morning before work as it clears my head and sets me up for the day – I think the expression in business is “eat the frog”!

 

Priya Rawal, Founder and CEO at The Luxury Property Forum and Co-host of The Real Rendezvous Podcast

There are two pieces of advice I received early on which I have lived by throughout my career.

The first is build your own personal brand. This is not as easy as it sounds and takes you to ask yourself tough questions: what you want out of your career? how you view yourself? how you would like the industry to view you? What do you stand for? what would you like to be remembered for? However, once you have asked yourself these questions and come to the answers you will know which makes your unique and what value you can bring to your clients, your boardroom, and your industry. It will give you a foundation to build upon and develop over time. This will not only build confidence, allow you to have gravitas and make an impact. Further it will keep you grounded and positive when times are tough because they inevitably will be.

The second is surround yourself with people who will make you stronger. A supportive network is essential to being successful in any sector (especially in luxury property). Building relationships with those who you admire and are aligned with values, are key to guiding you down the right path. I have been so lucky that many of these people (both men and women) have become mentors, who I have been able to turn to in times of difficulty and to whom I am forever grateful.

 

Linda Morey-Burrows, Founder and Principal Director of interior design and architecture firms MoreySmith and StudioMorey

Never underestimate just how important and effective your network is. As we celebrate our 30th anniversary at MoreySmith, many of our projects completing this year are with long standing clients that we first worked with in the early 1990s. Building strong relationships is fundamental to the success of any property business and I particularly have enjoyed collaborating with and mentoring other women in the industry over the years.

There is a real sense of community in the sector and developing a robust network of women colleagues means you can lean on each other when needed, which is especially useful when growing a company. As the industry is still at times very male-dominated, it really helps to have a black book of supportive contemporaries you can rely on.

My biggest piece of advice for anyone joining the industry is to look for a position or career path you will absolutely love doing and don’t feel limited by your gender when choosing a vocation. The sector encompasses so many different career pursuits and there are lots of exciting opportunities for everyone, so don’t listen to those stuck in the past who tell you what you can and cannot do!

Particularly in architecture and design, the industry is starting to make significant strides towards a gender balanced representation after years of feeling like a boys club. Having passionate women architects and designers in the room is essential to any project and something I am proud to champion at MoreySmith. We can only create incredible spaces that work for everyone if a diverse team is involved throughout the design and building process.

 

Camilla Dell, Managing Director of buying agency Black Brick Property Solutions

I’ve never felt that being a woman meant I couldn’t do or achieve anything I wanted to. Maybe I was/am naïve but I simply refused to believe I was at a disadvantage because of my sex. I think mindset is key and believing in yourself no matter what. I absolutely recognise that women are severely underrepresented in the property industry, but that is starting to change. And it’s not just property – the world of finance, private equity, hedge funds even charities are too white and too male.

One of the reasons I left my previous firm over 16 years ago was that there was only one female proprietary partner in the entire business – it set the wrong tone, but thankfully things are changing and moving in the right direction now.

I also feel that being a woman in property is a “super-power”. As a buying agent I feel I have the edge and the ability to empathise with my clients much more. With many of our clients, its often the female partner in the relationship that ultimately makes the decision. As a female property advisor, I stand out. All those things are good and I would encourage any woman thinking about a career in this industry to go for it. The property world needs you. Look to work for firms that have a diverse leadership team.

 

Jane Cronwright-Brown, Head of UK Lettings at Savills

When I moved to London aged 16 to attend the Royal Ballet School, I never imagined it would lead me to the board room and a successful property career at one of the UK’s leading estate agents.

The skills I acquired throughout my dance training, discipline, resilience, high standards, creativity, strong communication, competitiveness, an eye for detail, preparation, determination, drive, practise, perfection and continuous improvement, have continued to shape my progress and guide me through my lettings career.

After five years in the ballet studio, I was driving around Notting Hill in my mini metro as a trainee lettings negotiator! I’ve now been in the lettings industry for over 30 years and since joining Savills in 2005 I’ve grown the team to 450 strong covering over 70 locations from Tunbridge Wells to Edinburgh. It’s important to embrace opportunities and during my time at Savills I have sat on many boards and working groups. I’m currently a member of the Savills UK Board, Chair of the Lettings Executive Board, UK sponsor for The D&I Age Group, D&I ally and Chair of Savills Innovation Group. I’m proud to have a dynamic and diverse team which has enormous benefits for the business.

I enjoy all aspects of my job, but especially being a leader, working hard to inspire my team and consistently strive to develop my team to be the best that they can be. As a working mum I understand first-hand the importance of maintaining a healthy work-life balance and the challenges that many of my team face in today’s fast-paced world.

It’s important to set goals and to be ambitious, but at the same time authentic and true to yourself and your core values. I’m focused on leading the business to further growth whilst giving the best customer experience. Embrace each day with the mindset: Today is another day, and what I can do better than yesterday?

 

Jo Eccles, Founder and Managing Director of prime London buying agency Eccord

The property industry is extremely people-focused. Relationships and reputation are crucial, and I would advise anyone starting out and planning a long-term property career to earn their stripes by being clear about their values, remaining humble and going above and beyond – not just at the beginning, but throughout their career. The London property industry is a small world and people will remember you if you work hard and treat them politely, fairly and with integrity. The trust placed in us by our clients and the many professionals who recommend us, is not something we ever take for granted.

Since I set up Eccord in 2006, I’ve been inspired watching so many women build successful companies and rise to leadership positions across the property sector. I think the secret to success is very simple: love what you do. I have had the privilege of working with some very impressive people and viewing thousands of truly incredible homes during my career, but I never tire of it. If you live and breathe property, your passion and authenticity will shine through.

 

Phillippa Dalby-Welsh, Head of Savills Country Department

I think one of the key things I have learnt in business, is to never underestimate the importance of a network of mentors. I’ve always been lucky to benefit from the support of a number of people within the wider business structure, whom I got to know for no other reason than they were nice, engaging people who took an interest in my career. This group of unofficial mentors actually ended up becoming my friends and my confidants, who were always there for advice and support. Take an interest in other people’s journeys and experience and they will take an interest in yours.

Another piece of advice would be to volunteer for things above and beyond your role. Putting your hand up might not necessarily lead to career gains or financial reward, but the knowledge obtained from being involved in things outside of your day job and the people you get to interact with, really can help broaden your experience and enhance your career. One of the things I really dreaded was presenting, but I kept on putting my hand up, built my confidence and gained visibility in the business and exposure to people and opportunities I wouldn’t otherwise have done.

I think that many people don’t necessarily believe that they can do a job until they’re actually already doing 90% of the things that something requires and as a result don’t put themselves forward enough for things when actually their capabilities are already there.  For these people – and I was one of them – I’d say, don’t be afraid to put your head above the parapet, you might not know how to do everything from day one but a good business will recognise potential and offer appropriate support to help you develop that skill set.

There is also something to be said for humility over the challenges of balancing work and family. In my opinion, it’s important for women in positions of responsibility to champion the need for boundaries between work and motherhood, but equally not to pretend that ‘balance’ is something that is achieved and maintained, it ebbs and flows with the demands of work and life and there are of course sacrifices along the way on both sides but equally reward. There is no one size fits all – it requires weekly if not daily review.

 

Mel Constantinou, Regional Partner at Knight Frank

You need to believe in yourself, your ability and what you have to offer, don’t take obstacles personally and move on positively and collaborate to overcome them.

Learn as much as you can from those around you, be coachable and be open to constructive criticism.

Don’t be afraid to put yourself out there especially if it takes you out of your comfort zone because when you’re uncomfortable that’s when incredible things happen!