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:

60 per cent of property experts this transaction volume will increase in 2023

In 2023 will there be more or fewer transactions in your key market, compared to 2022?

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!

London Mansion Buyers Are Demanding More Than Just a Fancy Address

Britain’s clampdown on energy-wasting homes is prompting the rich to make green demands

By Damian Shepherd.

A trophy address alone doesn’t do it anymore for buyers of London’s mansions.

Along the tree-lined Avenue Road — a stone’s throw from Regent’s Park — with mansions priced at as much as £110 million ($134 million), there’s a burning question on the lips of prospective purchasers: How green are these homes?

“The wealthy want to be seen to do their bit, whether they believe in it or not,” said Jon O’Brien, founder of Domvs London, the developer of 52 Avenue Road, a project that’s set to transform the street’s biggest plot of land into 12 “eco-mansions” guarded by uniformed ex-Gurkha troops.

The developer claims the mansions’ thick walls will trap warmth in the winter, while elliptical staircases spanning the length of the building will remove summer heat through the roof. It plans geothermal heat pumps to warm the mansions’ sauna, steam room and fitness suite that’s being designed by a superyacht gym provider.

The special features at the mansions, which will be on average about 5,750 square feet in size with prices starting at £3,500 per square foot, are aimed at meeting the green demands of the rich.

“I appreciated not only their stunning architecture and layout but the significant ‘eco green’ design,” said Jeff, a 40-something native of New York, who has signed up for one of the mansions in the complex, but didn’t want to provide his last name for privacy reasons. The corporate finance executive with interests across the US and Europe had wanted a place for his family as he looks to expand from a base in London. The “environmental benefits really set the scheme above and beyond other London new-build properties we were viewing in the local area,” he said.

This newfound desire to be more green comes as the large carbon footprint of the wealthy comes increasingly into focus. The world’s richest 1%— the more than 60 million people earning $109,000 a year — are by far the fastest-growing source of emissions, according to the World Inequality Lab, driven by their diets, the way they live, travel and the cars and homes they own.

Also, governments are increasingly demanding more energy-efficient living. In the UK, tackling the energy inefficiency of real estate is seen as a crucial step in the nation weaning itself off fossil fuels. Almost half of Britain’s energy consumption is for heating, and refurbishing its drafty housing stock is seen as key to reduce demand and propel the nation toward meeting its climate goals.

The UK government wants all homes upgraded to an energy performance rating of C or higher on a scale of A to G by 2035. Landlords have even less time to upgrade their properties, with the latest government proposal requiring homes starting tenancies after April 2025 to have a minimum C rating — about 2.45 million properties currently fail to meet that criteria.

“It’s just like buying a car,” Domvs’s O’Brien added. “You’d be hesitant to buy one now that isn’t electric because you know that by 2030 it will only be electric cars allowed.”

Many of the homes built in Britain are made of brick and date back to the Victorian era. They lose heat three times as fast as those in European neighbors. Well-insulated dwellings use less gas and take better advantage of electricity-powered systems such as heat pumps.

Homeowners can improve their energy score by modernizing boilers or adding insulation, double-glazed windows and solar panels. But with upgrade costs averaging about £8,000, according to the English Housing Survey, landlords currently face renovation bills north of £19 billion.

For those renovating large, luxury homes, the fees are likely to be even steeper.

“There is some financial motivation to get these improvements underway, as there are quite stiff penalties,” said Jackie Bowie, head of Europe at risk consultant Chatham Financial. “There will be further tightening of requirements to come.”

Camilla Dell, managing partner at buying agent Black Brick Property Solutions, recently negotiated a deal on a block of seven investment apartments in London’s South Kensington district with energy efficiency ratings of D or lower. Black Brick was quoted £200,000 to upgrade the properties to a C rating, which the agent subsequently negotiated off the purchase price.

“So much of London’s property doesn’t meet the C rating,” Dell said. “Most listed buildings and Victorian buildings don’t, but they are some of the capital’s most sought-after prime real estate.”

On Avenue Road, potential buyers are already circling the plot of eco-mansions expected to be completed in June 2025. More than 120 expressions of interest were submitted in January, according to Domvs’s O’Brien, including a number of dollar-rich buyers from the US and Middle East looking to cash-in on the currency’s strength against the pound.

Wealthy, less debt-reliant buyers have helped London’s most expensive homes defy a slowdown in Britain’s housing market, which is facing disruption as it adapts to higher borrowing costs. New sales instructions for homes priced at £5 million or more were 74% higher in the final quarter of 2022 compared with the pre-Covid average, according to data compiled earlier this year by researcher LonRes.

The level of interest for the new Avenue Road mansions, set to be rated A and carrying an anticipated price of at least £20 million, is “demand that I’ve never seen before,” said O’Brien, and reflects the evolving priorities of buyers as fresh climate regulation looms.

“Buyers often raise eyebrows at the premiums being paid for new build property,” Black Brick’s Dell said. “But I can see this premium going even higher in the future as it’s the new builds that have the highest energy-efficiency ratings.”

Who are the new super-rich buying in London? Tatler reveals the five ultra-prime property tribes

Forget Londongrad, England’s capital has become a honeypot for tech gazillionaires from Silicon Valley – but who else is buying up the capital?

By Annabel Sampson

The Russians are out; European buyers have gone. So, who are the new super-rich buying in post-Brexit London? After the exodus of the oligarchs from the capital’s most desirable quarters – from the Boltons in Chelsea to Belgrave Square – you might have thought the odd multi-million pound trophy pad might sit derelict for a while. Not a chance – with a weak-ish pound, there’s a new set of super-rich making waves in London’s prime property scene. And it might not be who you expect: they come in sneakers, caps and sloganed tees. They can code, are fluent in AI and have a preference for Bulletproof Coffee. Yes, you guessed it: it’s the Silicon Valley billionaire brigade.

Bolstered by a strong dollar and keen for a close-to-Europe base, they’re arriving in droves. In super-prime London, according to research by estate agency Hamptons, American buyers in the most exclusive areas have increased from 2 to 7 per cent. Beauchamp estates, who dabble in the sale of the most luxurious properties, estimate that half the homes above £15 million went to American buyers last year (worth £620 million in total). But what about the others? Tatler introduces you to the new super-rich buying in London.

Silicon Valley Whizzkids

‘Intimate’ breakfasts at London institutions such as The Wolseley and The Colbert are being hosted by the likes of Sloane Street’s Tedworth Property in an attempt to woo tech-gazillionaires fresh from a long haul-flight. They’ve landed in London with a view to suss out the super-prime property market. ‘These are unlike the American buyers of years gone by,’ Rupert des Forges, head of prime central London developments at Knight Frank, told the Times. ‘The fortunes being made at such a young age is remarkable.’ While they’re notoriously private, it’s known that J Russell DeLeon, an online gambling billionaire, bought a four-storey, seven bedroom house near Notting Hill last year. In addition, we’ve got Meta execs settling in London (the likes of former deputy PM and now one of the highest ranking Meta executives Nick Clegg and Instagram boss Adam Mosseri, for starters). Like homing pigeons, at No 1 Grosvenor Square – the former US embassy – 10 of the 30 families who bought there were reportedly US tech leaders, often spending £30 million on the property in question.

The pharma dudes

Super jet-set and super far-flung: the ultimate example of this kind is Ernesto Bertarelli, the Swiss biotech magnate, who bought up an 80-room mansion in Belgravia in June last year. Ker-ching.

BIG PHARMA: KIRSTY AND ERNESTO BERTARELLI (NOW DIVORCED) AND EVA HERZIGOVA AT THE THEATRE DU CHATALET

Oil and gas tycoons

Oil is up, the pound is down – and the London property market is a solid investment. Camilla Dell, managing partner at Black Brick, told the Times, that she has a few Nigerian clients and inquiries from Africa and the Middle East were on the rise. They’re reportedly buoyed by profits from the booming oil and gas markets and the strength of the dollar against the pound. So where better to buy?

Global super-rich

The wealthiest Indians – the Poonwallahs, the Ambanis – have long looked to London (and the UK) for its prime real estate. Lebanon’s billionaire Hariri family – of whom Rafic Hariri and his son Saad Hariri have both served as prime ministers of the country – last year sold their £19.75 million Cadogan Gardens mansion to another Lebanese tycoon. (It’s understood they are looking for an even larger London base in place.) And a Chinese property tycoon, Cheung Chung-kiu (whose property group CC Land also owns the £1.15 billion Cheesegrater skyscraper in the city), bought a 45-room mansion for between £205 and £210 million in 2020 – making it, at that point, the most expensive home ever sold in the UK.

The hedgeys

When did the super-rich finance guys ever not buy up in super-prime London? Right now, they’re coming from all across the world as well as from home. Sir David Harding, a British businessman who made millions through his investment management company, the Winton Group, bought a seven bedroom house near Holland Park in July last year.

SUPER-PRIME AT ITS PEAK: BELGRAVE SQUARE IN CENTRAL LONDON

Luxury Mayfair Homes Are Selling at the Fastest Rate Since 2020

Home deals worth over £5 million rising in Mayfair: LonRes
Wider UK housing market is in the middle of a slowdown

By Damian Shepherd

Wealthy homebuyers are snapping up Mayfair properties at the fastest rate in over two years, as London’s priciest homes defy a slowdown in the city’s housing market.

Fifteen homes priced at £5 million ($6 million) or more sold in Mayfair and St James’s in December and January, according to data compiled by researcher LonRes. Only one other month — December 2020 — has seen more than five deals north of £5 million in the past five years.

“Mayfair is the go-to safe haven place for wealthy buyers looking to park money on London property,” said Camilla Dell, managing partner at buying agent Black Brick Property Solutions. “There is an acute lack of supply and constant demand, supporting prices.”

Mayfair Home Sales

Deals worth £5 million or more in London’s Mayfair, St James’s districts

Source: LonRes

Mayfair and St James’s saw the same number of £5 million-plus sales as Knightsbridge, South Kensington and Hampstead combined in the same two-month period, the data show. The district is home to some of London’s most well-heeled tenants, including luxury retailers, art galleries and hedge funds.

Black Brick’s Dell says a sixth of her clients are actively looking to buy in Mayfair, with preferences ranging from £5 million flats to £15 million family apartments. Prospective buyers include Americans looking to purchase holiday homes in the district rather than regularly booking hotels for thousands of pounds a night, Dell added.

“Many of our clients visit in peak times — summer and Christmas — and spend up to 90 nights visiting London,” she said. “Even with service charges, you would still be saving money, plus you get the benefit of owning an asset that over time will appreciate in value.”

Luxury sales are outperforming the wider London housing market, partly because wealthy buyers are largely shielded from higher mortgage rates due to less reliance on debt when purchasing a home. At the same time, the weakness in the pound against the dollar is tempting more international buyers to the city’s luxury properties.

Luxury London Home Deals

Number of sales worth £5 million or more in December and January

Jo Eccles, managing director at buying agent Eccord, says demand for top-end London homes has continued into 2023. One of Eccord’s clients — a British family office — sold a Mayfair home in their rental portfolio for about £50 million in December, paving the way for a flurry of high value transactions over the winter months.

Luxury London Homes

New home instructions were higher than their pre-pandemic average

Source: LonRes

New sales instructions for homes priced at £5 million or more were 74% higher in the final quarter of last year compared with the pre-Covid average, according to a separate LonRes report published last month.

“Buyers across the prime and super prime market are showing they aren’t afraid to commit,” Eccord’s Eccles said. “We expect demand to continue for genuine trophy homes as London’s appeal remains with buyers.”

Enquiries are up 60% this year, reports PCL buying agency

Black Brick notes some ‘green shoots of hope’ across the prime postcodes.

Few were predicting a bouncy start for the housing market in 2023, but agents are making increasingly encouraging noises about activity levels across the prime postcodes.

Knight Frank’s central London offices recently reported an exceptionally high volume of offers being received for the time of year; buyer registrations have also been tracking above pre-pandemic levels.

PCL buying agency Black Brick has now told of a 60% jump in new client enquiries in January, compared with the same month in 2022.

‘There are definitely green shoots of hope’, says Black Brick’s Camilla Dell

The firm, which acquired more than £100mn of property on behalf of its clients last year, said the surge “suggests a potentially busy year ahead”.

High numbers of enquiries have been coming in from across the UK and the Middle East, although buyers from the USA, Bermuda, and Oman are also active. There has also been a “new wave of interest” from China, now that Beijing has opened its borders.

The latest batch of search briefs range from two-bed pieds-à-terre at £2mn, all the way up to £50mn family homes.

It seems one area of PCL is proving especially popular: “We are still very, very busy with buyers looking for holiday homes. In times of global uncertainty, there is always a flight to quality and Mayfair has benefitted a bit from that. People feel really safe buying property in Mayfair.

“Also Mayfair has really come into its own as the leading area within prime central London and there is very limited supply on the market.”

Camilla Dell, Black Brick’s Managing Partner: “I definitely think that there is a lot less doom and gloom than there was last year in the aftermath of the mini budget. People feel that inflation has peaked, and mortgage rates are looking more sensible.

“I think that there are definitely green shoots of hope.”

Caspar Harvard-Walls, a Partner at the agency, noted a “real sense of urgency” amongst UK buyers: “What we are hearing from agents is that their buyers are really focussed. Some of them are keen to be able to use mortgages they have had agreed at lower rates than they would get now.

“We also still have a hangover of people who have not moved house for a very long time, first because of Brexit, then the pandemic, and they are now just feeling it is time.”

Knight Frank’s latest index shows average prices in Prime Central London were flat in January, leaving the annual increase at 1.2%. A dip of 0.1% was recorded in Prime Outer London on a monthly basis, putting annual growth at 3.6%.

Prices in PCL are currently 1% below their March 2020 level, and 5% higher in POL.

The market is expected to face its big test in the spring, when more transactions tend to take place, and against the backdrop of a much-altered lending landscape.

How wealthy foreigners are using the weak pound to snap up London homes

Demand from foreign buyers surges in wake of mini-Budget and falling house prices

By Rachel Mortimer

Wealthy foreign buyers are snapping up London’s most expensive homes in cash, tempted by a cooling property market and weak pound.

Half of the homes sold in “prime” central London in January were bought without a mortgage, up from 42% in the same month in 2022 and 38% in January 2021, according to analysis by estate agency Hamptons.

Demand from international buyers, especially those with currencies pegged to the US dollar, surged in the wake of the mini-Budget last year as the pound dropped to a record low and they pounced on huge discounts.

The pound has since recovered to the level seen in August last year, but buyers who exchanged funds during the market dip are now reaping the rewards.

Victoria Allner, of BNP Paribas Real Estate, said foreign cash buyers were effectively securing a “double discount” on London homes.

Ms Allner said that some people were buying in cash and then taking mortgages out later.

She said: “International buyers, particularly those who are dollar-pegged from the US, Middle East and Asia have been looking to actively take advantage of the devalued sterling since the mini-budget.

“Their strategy is to buy now but leverage later – making the most of the slight decline in property values and the discount given by current currency levels, while not subjecting themselves to mortgage rates until they become more attractive.”

Ms Allner said one super wealthy client from the Middle East had exchanged their currency last year when the pound plummeted and now had a budget 25% bigger ready to spend on property.

She added: “It’s effectively in line with the discount between the pound and the dollar at the low of September.”

Buying agent Black Brick reported the share of cash buyers had more than doubled as borrowing costs rose throughout last year. Half of its clients now pay in cash, up from an average of 20% in previous years.

Cash buyers are favoured by sellers because they offer a quick and simple sale, unlike mortgage borrowers who must contend with an often arbitrary lending process. Their appeal is no different in prime markets.

Camilla Dell, of Black Brick, said: “Many vendors will place significant value on securing a cash buyer for their property, particularly in a market currently riven with down-valuations and fall throughs.

“They may even accept a lower offer for their property if the buyer is able to pay in cash. It is a buyers’ market at the moment and being a cash buyer means that you have a better chance of getting a better price agreed.”

Business from across the pond, she added, was booming. Almost a third of the company’s transactions in 2022 were with US buyers, more than double the 12.5% recorded in 2021.

Ms Dell said: “There’s an investment case for US dollar buyers to be eyeing the market right now.

“Prime central London property values are down 18pc since the peak in 2014, combined with the currency effect, dollar buyers are now getting a 42% discount compared to then, all making it very appealing.”

Leading buying agency, Black Brick to visit UAE and advise where to buy in London this year

Currently, 23% of Black Brick’s active clients are from the Middle East, with budgets ranging from £1.5m to £45m.

Black Brick, a leading London-based buying agency, is pleased to announce that its managing partner and founder, Camilla Dell, will be visiting the Middle East with a business trip to Dubai and Abu Dhabi at the end of January 2023.

A regular visitor to the region, Black Brick founder Camilla Dell will be leading the trip and meeting with potential clients and partners in the region, including several private banks, family offices, and high net worth clients. The primary focus of the trip is to update Middle Eastern clients on the London property market and raise the profile on the benefits of using a buying agent when considering purchasing property in London.

Currently, 23% of Black Brick’s active clients are from the Middle East, with budgets ranging from £1.5m to £45m. London is a highly attractive asset for Middle Eastern clients, due in part to its stable political environment, strong economy, and world-renowned educational and cultural institutions. The current weak pound is also making London property more attractive for Middle Eastern buyers, many of whom are dollar-based. The city offers a wide range of property options, from central London apartments to country estates, making it a desirable location for both personal and investment purposes.

In a year marked by unpredictability, Black Brick has still purchased almost £100m worth of property on behalf of clients from around the world. As the market becomes more cautious, half of these homes were sourced off market, up from a third in 2021, and the average discount on the asking price that Black Brick achieved for their clients was 4% or £40,000 per £1m. Half of Black Brick’s deals in 2022 were off-market, which can be difficult to access without professional representation.

In the past 12 months, seven out of ten of the homes purchased by Black Brick were apartments, compared to five out of ten in 2021. There has also been a resurgence of investor buyers, with one in five deals made on behalf of investors in 2022 compared to just six percent in 2021.

Black Brick has clients from a variety of nationalities, including the UK, the US, Africa, the Middle East and Europe.

Camilla Dell said, “We are excited to bring our expertise and unique approach to the Middle East and help clients in the region find their dream homes in London. Our commitment to excellent customer service and our focus on acting in the best interests of our clients make us a valuable asset in the London property market.”

Where to buy in London this year:

From historic West End enclaves with some of the best nightlife and shopping in the world on the doorstep, to leafy London villages with buzzy atmospheres and improving transport links – anybody considering buying a London home this year certainly has plenty of choice.

Picking the right postcode is a fine art – as well as considering the lifestyle and local amenities on offer, buyers need to have an ear to the property market ground to select a location with the staying power to ride out the inevitable ups and downs of the housing cycle.

To help you decide where to buy in 2023, these are Black Brick’s selection of the five key locations to watch over the next 12 months:

PRIME CENTRAL LONDON: MAYFAIR.

This roughly one mile square grid of streets and squares has been a prime London address ever since the late 17th century and clever curation of its public spaces and shopping streets means that when it comes to PCL Mayfair has firmly overtaken Knightsbridge as the place to be.

Stock is in short supply, and demand remains strong from both domestic and international buyers. Add to that the fact that few Mayfair vendors will be in a position of having to sell, means prices are likely to withstand any economic shocks the year may bring.

“Mayfair is one of those places where buyers are willing to pay a premium to live,” said Camilla Dell, managing partner of Black Brick. “They don’t expect to get big discounts.” Homes range from elegant townhouses to modern, ultra-luxury apartment buildings like Clarges Mayfair, Burlington Gate, and 1, Grosvenor Square. The average sale price stands at £4.3m according to data from Rightmove. “One of the key things about Mayfair is the huge amount of investment that has been put into the area by the Grosvenor Estate – they are very particular about things like which shops go into Mount Street and – and there has also been a real explosion of exclusive new private members clubs and restaurants,” said Dell.

The delayed opening of the new Crossrail line at Bond Street in October has given Mayfair an extra fillip. “It will really appeal to buyers who come in and out of Heathrow,” said Black Brick property consultant Tom Kain.

PRIME LONDON FRINGES: NORTH KENSINGTON.

Samantha and David Cameron were early adopters of the W10 postcode, only leaving their family home to move into Downing Street in 2010.

Since then, North Ken has been on a quiet ascent. Golborne Road Market is a more peaceful, less tourist flooded, and altogether hipper alternative to Portobello Road, with pretty stalls and food trucks, artisanal cafes, restaurants, vintage shops, and boutiques. This fact has not gone unnoticed by young British, European, and American buyers looking for a buzzy new neighbourhood to call home. And they are also cottoning on to the fact that they can get great value for money compared to Notting Hill, less than a mile away. In W10 a really smart property would sell for around £1,400 to £1,500 per sq ft said Kain. A similar property in Notting Hill could cost anywhere from £4,000 to £5,000 per sq ft.

UP AND COMING LONDON VILLAGE: HERNE HILL.

In the 1780s streets of fine houses were built in Herne Hill by wealthy merchants and bankers, earning it the nickname the “Belgravia of south London”. In more recent years it Herne Hill was overshadowed by the hipsterfication of its nearest neighbours, Brixton and Peckham. But as property prices there have swelled so buyers looking for value for money have started to explore Herne Hill.

What they have found is good quality period houses, plentiful green space, and an increasingly impressive range of gastropubs and restaurants. Little wonder that a ripple of young families – the “dogs and sprogs” crowd –looking for space and quality of life have adopted Herne Hill.

The most famous of these are, of course, Boris and Carrie Johnson, who are reported to have chosen a Edwardian villa on Stradella Road as their post-Westminster home.

The average sale price of apartments in Herne Hill last year was just under £500,000 according to Rightmove, with semi detached houses selling at close to £1.5m. Prices are now 10 per cent up on pre pandemic levels.

PRIME OUTER LONDON: ST. JOHN’S WOOD.

The jewel in the crown of north London, St John’s Wood with its affluent high street, amazing schools, and beautiful white stucco villas has long been a popular roost for families who tend to stay put for decades. “St John’s Wood has done really exceptionally well over the last 18 to 24 months,” said Dell.

The current average price for a flat in NW8 stands at just under £1.2m according to Rightmove, while semi detached houses fetch an average of just over £4.2m. And current sale prices are up 11 per cent compared to the 2018 peak. Beyond average prices, there have been some really super prime deals struck over the past couple of years. Three houses on the area’s premiere street, Hamilton Terrace sold for north of £20m, while unmodernised properties on the almost equally sought after Avenue Road are now trading for an exceptional £3,000 per sq ft.

“I think we will definitely see prices plateau this year, but this is the sort of area where people don’t need to sell if they don’t get the right price, so I don’t think we will see a drop off either,” said Dell. Historically one thing that SJW has lacked is prime apartment buildings to tempt local homeowners to downsize. Most local stock consists of dated mansion blocks.

There is clearly latent demand: homes at One St John’s Wood, a 12 storey building opposite Lord’s Cricket Ground, which completed in 2022, sold strongly at prices starting from £2.6m. And in November preparatory work finally started on the redevelopment of the St John’s Wood Barracks, which has been in the works for more than a decade. This 2.2-hectare site, formerly the headquarters for the Royal Horse Artillery, will bring 179 brand new homes to the market.

CROSSRAIL OUTPERFORMER: ACTON.

Ever since it was announced that London was to get a new train line, smart buyers have been eyeing this Victorian suburb as a natural step out from Notting Hill or Holland Park. And now that it is up and running its super-fast train links to the City and Canary Wharf are starting to tempt buyers who might once have preferred to live in Islington or Clerkenwell.

When the line is fully operational journeys to the City will take just over a quarter of an hour, and travellers can be in the West End in ten minutes.

These new arrivals have helped hike house prices in Acton by 59 per cent between 2012, when work on Crossrail began, and last year. And they have also contributed to a groundswell of organic local regeneration which is in the throes of transforming Acton from rather bland backwater into the new East Dulwich. Its de-facto high street, Churchfield Road, has become a hotspot for interesting independent shops and restaurants, galleries and gastropubs, many founded by new locals.

Acton has already had its fair share of investment – the £800m regeneration of the South Acton Estate to name but one – and more is to come. Transport for London is poised to start work on a £1bn scheme to build 850 new homes, plus offices, shops, and restaurants, close to the station which will give the gateway to Acton just the face lift it needs.

For more information about Black Brick and its services, please visit www.black-brick.com.

The new house price hotspots favoured by high earners

By Jayne Dowle

Wealth drivers — people with executive jobs — have long influenced house price growth. Now we reveal where they’re moving to next

If you want to follow the money, head to Dartford in Kent, Waltham Forest on the Essex borders, Trafford in Greater Manchester or Rushcliffe near Nottingham.

While gilt-edged London boroughs such as Kensington and Chelsea and Richmond upon Thames still attract the seriously wealthy, research from Savills finds some unlikely England and Wales hotspots where high-earners are making a huge impact on house prices.

Pulling together information from the 2021 national census and Land Registry house prices over the past ten years, the estate agency has focused on how an influx of “wealth drivers” (identified as managers, directors and senior officials, plus those in professional occupations) correlates to house price gains.

“Why did we do it? Because it’s a once in a decade opportunity to get your hands on this data,” says Lucian Cook, the report author and head of residential research for the estate agency. “The census is a really useful snapshot of household income. We’re already aware of some of the trends, but connecting the data with sold house prices allows you to investigate. It really tells us about the housing market and people’s life choices.”

Posh

Four London locations — the City of London, with 65 per cent of residents classed as high-earning, paying an average of £828,113 for a home; Richmond upon Thames (55 per cent, £976,160); Kensington and Chelsea (54 per cent, £2,409,454); and Westminster (53 per cent, £1,746,404) — top the locations with the largest concentration of wealthy residents. No surprises there then.

“These certainly are gilt-edged, although for different reasons,” says Guy Meacock, director of the buying agency Prime Purchase. “Kensington and Chelsea is London’s most cast-iron borough with a consistent density of high-income households and no weak spots; people will pay £50 million for one of the biggest houses on Upper Phillimore Gardens. It has enduring domestic appeal, although plenty of Americans are also interested.

“Westminster covers a wider cross-section of demographic and household income but includes top-end Belgravia and Mayfair — attractive to Middle Eastern buyers and ‘new money’.”

Meacock adds that the City of London is experiencing growth thanks to recent office-to-residential conversions creating handy pied-à-terres, and Richmond is a classic family favourite between town and countryside.

However, snapping at their well-shod heels is the city of Cambridge, fifth on the matrix of high-earners and high prices. As in Westminster, 53 per cent of homeowners in Cambridge are in the high-income bracket, but the average house price, at £557,714, is less than a third of that in the London borough — for now.

“In about the last four years we have seen a marked increase in buyers looking for houses in higher price ranges,” says Richard Freshwater, director of residential at the east of England estate agents Cheffins. “We have had a huge amount of people coming out of London — a lot attracted by the schooling and the fact that they can cycle to the station [the average rail journey time from Cambridge to London King’s Cross is an hour and 16 minutes]. However, it coincides with a massive change in the labour market. Increasingly, they are not having to go to their place of work every day.”

Getting posher

“When it comes to the rising ones in London, I could probably have told you without the data,” Cook says. “Less immediately obvious, boroughs such as Waltham Forest and Greenwich have seen quite significant increases, and so have Dartford, Bexley and Newham. London house prices are such that if people want to meet requirements for space, they will be pushed into areas they wouldn’t have previously considered buying in.”

Camilla Dell, managing partner at the buying agency Black Brick, says that a significant factor is lack of supply in better-established — but still, to some, outlying — family-oriented areas, such as Dulwich and Wimbledon. “The £2 million-plus market in Dulwich suffers from severely restricted supply, with many people staying for 20 to 30-year periods without moving,” she says.

However, it’s the Greater Manchester borough of Trafford — home to fancy, family-friendly Altrincham, Hale, Hale Barns and Bowdon — that tops Cook’s “Posh and Getting Posher” category, bringing together high-earners and impressive growth; 44 per cent here are top-flight professionals, a figure that has risen 28 per cent in a decade, underpinning a 73 per cent increase in house prices to an average of £417,306.

“The profile of the people I meet moving into the area reflects this,” confirms Philip Diggle, head of Gascoigne Halman’s Hale office. “But one key point is that I’m constantly acting for and finding properties for business owners. There’s a lot of entrepreneurial spirit in the north, people in control of their own destiny, rather than working for someone else.”

When it comes to a concentrated number of high-income households outside London and the South East (including Cambridge), Rushcliffe — centred on the Nottinghamshire town of West Bridgford — is highest, with 47 per cent, but its average house price remains a relatively modest £346,302.

“Until recently Rushcliffe wasn’t really on the radar, but the schools are good and it’s within easy striking distance to Nottingham city centre,” says Steven Gray, director of the local estate agency FHPLiving. “And the average house price hides some expensive properties — people are prepared to pay £625,000 for a Victorian semi with no parking.”

Cook also highlights Cardiff as gentrifying — more than a third (37 per cent) of residents are now classed as high-earners, a 19 per cent increase since 2011.

At £282,158, the average Cardiff house price also hides expensive individual homes. “The M4 corridor coming down towards Wales has been very busy,” says James Thomas, associate director at Savills in Cardiff. “And you can get to London [Paddington] from Newport by train in two hours — it’s really changed the way Cardiff is performing. We are lucky in that we have about six or eight suburbs that are really desirable, including Llandaff, Penarth and Cyncoed.”

Not so posh

Inevitably, Savills has also identified locations experiencing “entrenched challenges”, meaning less than 25 per cent of occupations are classed as high-earning, leading to subsequent low growth in house prices.

At the top is northeast Lincolnshire, where 21 per cent of residents are high-earning, representing a rise of 13 per cent over the past decade. In this period, house prices in local towns such as Grimsby and Immingham have risen by 38 per cent to a northeast Lincolnshire average of £160,528.

Tim Downing, director at the Lincolnshire-wide estate agency Pygott & Crone, says that recent opportunities — such as the offshore wind farm industry, the Freeport incorporating Immingham, Grimsby, Hull and Goole, and £20 million for Grimsby’s regeneration from the government’s Towns Fund — will help to turn this tide. “And going forward I would like to see a mainline service to London [from northeast Lincolnshire] and better train accessibility to Leeds and Sheffield,” he says.

Northeast Lincolnshire is followed by Bolsover in Derbyshire (23 per cent high-earners; £171,895 average house price) — handy for Sheffield and Leeds — and Walsall in the West Midlands (25 per cent; £213,391). All three areas have had a 13 per cent rise in high-earners since 2011.

Cook says that future activity depends on “whether the levelling up agenda can gain traction in these areas, because wealth is generated by employment”.

However, he predicts that the change in working patterns, with more people employed on an agile basis, will eventually lead to property searches over wider areas.

He singles out Exeter as a good example of this. “An area that piqued my interest in the South West, for example, is Exeter [where high-earning occupations have risen by 25 per cent in a decade, to 34 per cent of resident homeowners, rather than second-home owners]. The question is, does Exeter have the capacity to do a Bristol, where house prices have rocketed in the last ten years? It depends on the traction of higher-value earners. It might well be one to watch.”

The recession forecast: How will the property market fare in 2023?

Until the end of last year, the UK property market was going great guns. Prices were at an all-time high, even despite the fact that a pandemic had been raging for the best part of two years. At the start of 2020, the Bank of England feared that UK house prices could fall by 16 per cent; in actual fact, they went on a growth spree, jumping by almost 10 per cent in 2021 alone.

Then things began to change. War in Ukraine. Brexit fallout. The effects of Covid finally catching up with the economy. Cue a cost of living crisis, inflation, rising interest and mortgage rates… you know the drill all too well. January marks the fourth consecutive month that prices have fallen in London, and experts almost unanimously agree that the cooldown will continue, with one report by The Guardian forecasting drops of between 5 and 12 per cent (for the UK as a whole).

What will happen to the luxury property market?

All of that said, the luxury market is a different beast. Those purchasing prime property are less affected by the cost of living crisis and rising rates; research from Savills suggests that only a third of Prime Central London (PCL) homeowners have debt on their property. This means fewer forced sales and more holding of value. “Luxury, rare assets will always have demand over areas that are more susceptible, outside of prime central London,” says Camilla Dell, Managing Partner and Founder of independent buying agency Black Brick.

Dell forecasts that prices in prime London will drop two per cent this year, which is low, although she stresses that this should be taken with a pinch of salt: “Predicting property values is extremely difficult, particularly in a market like London where different property types and areas all factor hugely in determining how values will perform over time.” Even if the picture is worse than imagined, it may be a case of simply holding out, as inflation is predicted to peak in the middle of the year, meaning that “we should see some light at the end of the tunnel as we enter Q3 2023”.

Is now a good time to sell?

Buyers are hesitant at the moment, says Dell, and will probably “only take the plunge if they feel the deal/discount seems worthwhile”. So, the answer to the question? Only if you’re willing to be pragmatic on price, as “anything that is wildly overpriced probably won’t be considered at the moment”.

That said, demand is highly subject to where a property is located. London is a patchwork of neighbourhoods and many are retaining their value. The market is still active and even competitive for family homes with gardens in the £2-5 million range in suburbs such as Richmond, Wimbledon and Dulwich, for example.

On a more general level, buyers are looking for proximity to transport links, a good local high street and a park, according to Dell. “Post-pandemic, buyers want to feel like they are buying into a community,” she says. A premium is also being placed on properties with air conditioning as summers in London get hotter.

Is now a good time to buy?

If you’re buying in the current climate, you should make sure that your investment is a worthwhile one. Mayfair is always a good choice – a prime address since the 17th century, stock in this one-mile-square grid is in short supply, and demand remains strong. In prime outer London, look to St John’s Wood. Here, current sale prices are up 11 per cent compared to the 2018 peak.

If you want to be smart, Dell also recommends North Kensington, which she says “has been on a quiet ascent”. “Golborne Road Market is a less tourist-flooded and altogether hipper alternative to Portobello Road,” she continues. “Buyers are also cottoning on to the fact that they can get great value for money compared to Notting Hill, less than a mile away.” In W10, property sells for around £1,400 to £1,500 per sq ft; a similar property in Notting Hill could cost anywhere from £4,000 to £5,000 per sq ft.

Acton is another good choice. It has been the subject of considerable investment – including the arrival of super-fast train links to the City and Canary Wharf – and a £1 billion scheme to build homes, offices, shops and restaurants next to the station is in the pipeline. These new arrivals have helped hike house prices in Acton by 59 per cent between 2012 (when work on Crossrail began) and last year.

Finally, consider Herne Hill, says Dell: “It has previously been overshadowed by its neighbours, Brixton and Peckham. But as property prices have swelled, buyers looking for value for money have started to explore Herne Hill. Little wonder that a ripple of young families – the ‘dogs and sprogs’ crowd – have chosen this area.” The most famous of these is Boris and Carrie Johnson, who are reported to have chosen an Edwardian villa on Stradella Road as their post-Downing Street home.

It seems inevitable that prices will fall this year, and we shouldn’t expect more than above-inflationary growth for the next few years. However, the pinch will mainly be felt in the middle market, as opposed to prime London. That said, buyers will be more sluggish, and sellers should therefore be realistic about valuing their property. There are areas, however, that may, if not buck the trend, then outperform. Look for up-and-coming postcodes bolstered by great transport links, proximity to other areas and possession of other coveted features.

Read the article: https://luxurylondon.co.uk/property/property-market-forecast-2023-london-recession/

This is where to buy in London in 2023, according to a top buying agency

Looking for our 2024 guide? Our updated insights on London’s prime property market can be found here

North Kensington, Herne Hill, Mayfair, St John’s Wood and Acton have been picked out as the top places to buy in London this year.

PCL acquisition firm Black Brick – which bought almost £100mn worth of property on behalf of its clients in 2022 – has come up with the list of neighbourhoods to help buyers choose a location “with the staying power to ride out the inevitable ups and downs of the housing cycle”.

Mayfair makes the cut in PCL, having “firmly overtaken Knightsbridge as the place to be”. Low supply and strong demand means prices are “likely to withstand any economic shocks the year may bring”, said the firm, and the arrival of Crossrail has provided another big boost.

Elsewhere, buyers priced out of Notting Hill are directed to nearby North Ken, while Herne Hill is the top pick for the “dogs and sprogs” crowd south of the river, on account of its fine housing stock and plentiful green space.

Here’s the team explaining the rationale behind the selections…

Prime Central London: Mayfair

“Mayfair is one of those places where buyers are willing to pay a premium to live,” said Camilla Dell, managing partner of Black Brick. “They don’t expect to get big discounts.”

Homes range from elegant townhouses to modern, ultra-luxury apartment buildings like Clarges Mayfair, Burlington Gate, and 1, Grosvenor Square. The average sale price stands at £4.3m according to data from Rightmove.

“One of the key things about Mayfair is the huge amount of investment that has been put into the area by the Grosvenor Estate – they are very particular about things like which shops go into Mount Street and – and there has also been a real explosion of exclusive new private members clubs and restaurants,” said Dell.

The delayed opening of the new Crossrail line at Bond Street in October has given Mayfair an extra fillip.

“It will really appeal to buyers who come in and out of Heathrow,” said Black Brick property consultant Tom Kain.

Prime London Fringes: North Kensington

Samantha and David Cameron were early adopters of the W10 postcode, only leaving their family home to move into Downing Street in 2010.

Since then, North Ken has been on a quiet ascent.

Golborne Road Market is a more peaceful, less tourist flooded, and altogether hipper alternative to Portobello Road, with pretty stalls and food trucks, artisanal cafes, restaurants, vintage shops, and boutiques.

This fact has not gone unnoticed by young British, European, and American buyers looking for a buzzy new neighbourhood to call home. And they are also cottoning on to the fact that they can get great value for money compared to Notting Hill, less than a mile away.

“In W10, a really smart property would sell for around £1,400 to £1,500 per sq ft,” said Kain.

“A similar property in Notting Hill could cost anywhere from £4,000 to £5,000 per sq ft”.

Up and Coming London Village: Herne Hill

In the 1780s streets of fine houses were built in Herne Hill by wealthy merchants and bankers, earning it the nickname the “Belgravia of south London”.

In more recent years it Herne Hill was overshadowed by the hipsterfication of its nearest neighbours, Brixton and Peckham. But as property prices there have swelled so buyers looking for value for money have started to explore Herne Hill.

What they have found is good quality period houses, plentiful green space, and an increasingly impressive range of gastropubs and restaurants. Little wonder that a ripple of young families – the “dogs and sprogs” crowd – looking for space and quality of life have adopted Herne Hill.

The most famous of these are, of course, Boris and Carrie Johnson, who are reported to have chosen a Edwardian villa on Stradella Road as their post-Westminster home.

Prime Outer London: St John’s Wood

“St John’s Wood has done really exceptionally well over the last 18 to 24 months,” said Dell.

Beyond average prices, there have been some really super prime deals struck over the past couple of years. Three houses on the area’s premier street, Hamilton Terrace sold for north of £20m, while unmodernised properties on the almost equally sought after Avenue Road are now trading for an exceptional £3,000 per sq ft.

Historically one thing that SJW has lacked is prime apartment buildings to tempt local homeowners to downsize. Most local stock consists of dated mansion blocks.

There is clearly latent demand: homes at One St John’s Wood, a 12 storey building opposite Lord’s Cricket Ground, which completed in 2022, sold strongly at prices starting from £2.6m.

And in November preparatory work finally started on the redevelopment of the St John’s Wood Barracks, which has been in the works for more than a decade. This 2.2-hectare site, formerly the headquarters for the Royal Horse Artillery, will bring 179 brand new homes to the market.

Crossrail Outperformer: Acton

Ever since it was announced that London was to get a new train line, smart buyers have been eyeing this Victorian suburb as a natural step out from Notting Hill or Holland Park.

And now that it is up and running its super-fast train links to the City and Canary Wharf are starting to tempt buyers who might once have preferred to live in Islington or Clerkenwell.

When the line is fully operational journeys to the City will take just over a quarter of an hour, and travellers can be in the West End in ten minutes.

Its de-facto high street, Churchfield Road, has become a hotspot for interesting independent shops and restaurants, galleries and gastropubs, many founded by new locals.

House of cards: why are so many property sales collapsing?

By Ruth Bloomfield

The number of deals falling through is rising

Moving house is said to be one of the most stressful life experiences, right up there with bereavement and divorce. But what about the stress of not moving? Amid the upheavals of the past few months increasing numbers have seen their property ladder dreams collapse around their ears.According to market analyst TwentyCi there has been a ‘sharp increase’ in the number of deals falling through. More than 90,000 agreed sales disintegrated between July and September, an 18 per cent increase on the same period in 2019.

Wendy and William Waterton know exactly what it feels like to be on the sharp end of a collapsing sale. In the past two years it has happened to them twice. The couple bought their one-bedroom starter flat in Woolwich, south-east London, for £320,000 in 2017. By November 2020, with a young family, they were ready for a larger home closer to family in north London.

They put the flat on the market for £325,000, but small flats without outside space were a hard sell during the pandemic. It was not until December 2021 that they accepted an offer of £315,000.

The couple packed their bags, planning to move in with relatives and start house-hunting once the flat was sold. They hoped to complete in March this year. ‘Then in February our buyers said they had found a property which suited their needs better – we had no idea they were still looking – and pulled out,’ said William, 30, a management accountant. ‘It was devastating.’

In May he and Wendy, also 30, who runs an online cosmetics store, steeled themselves for another attempt to sell and put the property back on the market. The couple and their two children also went ahead and moved in with William’s parents so the flat would be vacant.

Over the summer they accepted an offer of £312,000 and, once more, everything seemed to be progressing nicely. Then came the mini-Budget. By the end of that week, with the mortgage markets in turmoil, their buyer had pulled out.

To make matters worse the couple had used the Help to Buy scheme when they bought the flat, which means renting it out for a while is not an option. All they have been able to do is drop the price, to £305,000, and hope for a case of third time lucky.

‘Our fear is that it has now been on the market for so long that people will think there is something wrong with it,’ said William. ‘In reality it has just been a series of events – the pandemic, the war in Ukraine and the cost of living crisis – happening around us.’

Given the likelihood that interest rate rises will continue, and amid forecasts of substantial house price drops in 2023, it is likely that Wendy and William’s experience is going to become more commonplace, afflicting all sectors of the market.

In the north London suburbs veteran agent Jeremy Leaf, of Jeremy Leaf & Co estate agents, said his team have had to do some ‘severe arm-twisting’ to keep deals on track, particularly when dealing with anxious first-time buyers confronted with the prospect of higher monthly repayments. He agrees things could get worse before they get better, with the number of completed sales dropping off next year. ‘Buyer enquiries have reduced substantially since the mini-Budget and are only slowly starting to improve,’ he said.

Agents have started to hear whispers of the return of gazundering – the practice of attempting to renegotiate a lower price on the verge of exchange

Another breed of buyer, meanwhile, is keen to use the faltering economic situation as an excuse to try their luck. Camilla Dell, managing partner of buying agency Black Brick, has started to hear whispers of the return of gazundering – the practice of attempting to renegotiate a lower price after an offer has been accepted and a deal is on the verge of exchange.

In prime central London, she said, this approach tends to fail because few owners are so desperate to sell that they will take a last-minute lowball offer. ‘What has happened is that not only have the vendors said no, but they have also decided not to sell their property to that buyer, so it is not a strategy which is working,’ she said.

Beyond London, locations which were red-hot during the pandemic are now seeing a wave of deals fall through. Carol Peett, managing director of West Wales Property Finders, has noticed a string of properties ‘reappearing’ on the market a couple of months after going under offer. She blames the surveyors who carry out valuations on behalf of mortgage lenders who, she feels, have a habit of undervaluing properties.

‘In many cases, they send valuers from outside the area who do not understand the nuances of the local market,’ she said. ‘A property with a sea view may be three times more valuable than one in the same postcode without a sea view or slightly inland and down value accordingly. Unless people have a substantial deposit to cover the shortfall, the transaction falls through.’

In Cornwall, another lockdown property hotspot, Josephine Ashby, a director of John Bray Estates, said many discretionary second-home owners simply change their minds and withdraw property offers – and the way the UK buying system is designed can do so without penalty. Unfortunately, their decision can break lengthy chains of buyers and sellers, sending everyone back to square one.

‘Reservation deposits prior to exchange is an interesting idea,’ she said. ‘We see them frequently with new-build properties, but they could be used more for existing properties. This would make buyers think twice before withdrawing from a transaction they entered into.’

Jeremy Leaf thinks that vendors should have to produce an information pack giving details on their property upfront, to avoid would-be buyers discovering late in the game that a home suffers from subsidence or has a Japanese knotweed issue. He would also like local councils and managing agents to be encouraged to respond to queries faster; the more time spent chasing up information during the conveyancing process, the more time there is for buyer or seller to get cold feet or mortgage deals to expire.

Whatever happens over the next year or two, buying agent Nina Harrison, London specialist at Haringtons, who has been buying and selling property for 30 years, has comforting words for younger buyers shocked by the sudden deflation of the property market. ‘In 2023 I think we will see a dip which is something that Gen Zs have never experienced before – but as with all roller-coasters there will be a climb again,’ she said.

Gazundering backfires for buyers as deals collapse

One major London estate agency has seen 20% of its sales pipeline fall through as a result of buyers trying to renegotiate prices, reports acquisition firm Black Brick.

The practice of gazundering reared its head in the wake of the ill-fated mini-budget, but it doesn’t sound like vendors have been buying it.

“Some buyers treated the Truss imbroglio not as a problem but as an opportunity”, according to PCL acquisition firm Black Brick, as punchy purchasers lowered their offers at the last minute to push sellers into offering a deal.

Buyers’ attempts to renegotiate at the last minute are not working in PCL, says Camilla Dell

“I spoke to a large central London agency – they have seen 20% of their pipeline fall through where buyers have tried to renegotiate prices,” said managing partner Camilla Dell.

“What has happened is that not only have the vendors said no, but they have also decided not to sell their property to that buyer so it is not a strategy which is working”.

Opportunities to buy at distressed levels “will be few and far between,” she added, suggesting a “more constructive” way to approach the delicate negotiation process is to understand both what a fair market price is for a particular property and the needs of its vendor.

Despite the somewhat gloomy market conditions, if sellers do not have a mortgage or are simply testing the market, buyers are warned that a below-market offer is “highly unlikely to be positively received”.

Inevitably there will always be those keen to chance their arm and this, said Dell, means that while central London prices should remain fairly stable over the next few years, transaction numbers “may well tail off”.

Some investors and buyers ‘have a fixation on discounts and bargains’

Those holding out for GFC-level price falls are likely to be disappointed, she added: “Some investors, and buyers in general are really hoping that prices will come down 20%, like they did in the financial crisis…they have this fixation on discounts and bargains.

“But in Prime Central London only one in three people have taken debt to buy their properties.

“Frankly, they don’t need to sell, and if prices do come down they won’t.

“I know that is going to be very, very disappointing to some people, but buyers should be focussing on whether a property is the right home for them and their family, somewhere they are going to be able to live for ten years.”

Both Savills and Knight Frank expect PCL to outperform the rest of the country in the years ahead – with the least dramatic price correction in 2023 and the highest cumulative price growth to 2027.