July 2023

Could London’s property market serve up an ace this summer?

In a couple of days the world’s greatest tennis players will converge on south west London for Wimbledon fortnight.

With classic sporting events to enjoy, summer holidays to plan for, and exam results on the horizon, there are many reasons why the property market tends to cool down in high summer.

But motivated buyers who need a new home in time for the new school year, want to steal a march on the autumn season, or are keen to enjoy the best the capital has to offer with a pied a terre in the perfect location, shouldn’t waste the opportunity the next month or so offers.

Less competition is great news for buyers and vendors are starting to come around to the idea that prices have softened since the great pandemic buying spree.

“The next six to 12 months could be a good buying window, especially for cash buyers,” said Camilla Dell, managing partner at Black Brick. “We recently came across an apartment in a prime South Kensington address that was on the market at £5.25m. We were then made aware the sellers would look at offers as low as £4m because interest rate rises have left them overstretched.

“This won’t be the case across all of Prime Central London, of course, but I do think we will start to see these kinds of opportunities open up.”


Paved with Gold

So far this year Mayfair has emerged as London’s hottest property ticket.

Analysis of sale prices by central London postcode by estate agent Benham & Reeves found that W1K is leading the pack, with an average price of £8m. A few streets away Belgravia’s SW1X takes second place, with an average sale price of a comparatively modest £2.45m.

“Although, geographically, they are close, they are very, very different locations in terms of what they offer and the buyer profile they appeal to,” said Dell.

Mayfair has enjoyed a real rejuvenation over the last decade. This once slightly dreary hinterland of Oxford Street has been transformed into an exciting, vibrant destination, full of designer shops, great restaurants, and some of London’s most exclusive private members clubs.

Its transport links have been enhanced by the Elizabeth Line, it is home to many of London’s most successful hedge funds, and it looks prettier too.

“The Grosvenor Estate has spent lots of money beautifying Mount Street and the other main streets, and you have got some of the most sought after super prime new build developments in London, like 1, Grosvenor Square and 20, Grosvenor Square, 60 Curzon, and the upcoming 1 Mayfair,” said Dell.

The presence of these behemoth developments partly explains Mayfair’s higher average prices; Belgravia’s stock of apartments is more geared towards period flats, the best of which are often on garden squares. It is also, overall, a more sedate, residential sort of neighbourhood than buzzy Mayfair (although the King’s Road is just to the west), although it may provide a more fertile hunting ground for buyers looking for a substantial house.

“It appeals to oligarchs and international royals who want a 20,000 sq ft, really ambassadorial sort of house,” said Dell. “It has got some very, very large family residences, which are a rarity in Mayfair.”


Buyers Beware: Warning over “pom pom” pricing

When stock is short on the market the competition between estate agents gets fierce. And a strategy some use to woo vendors is to overvalue properties to win the instruction.

This is bad news for buyers who certainly don’t want to overpay for a property. And it can also be bad news for homeowners. Because while a high headline price might sound appealing analysis by estate agent Andrews – which likens overvaluing estate agents to cheerleaders waving pom poms in the air – it is a strategy which may backfire.

Andrews found that correctly priced homes, that do not require a price reduction to find a buyer, take an average of just over seven weeks to go under offer. Those which have to have their asking price cut waste significant amounts of time. The average process takes more than 18 weeks.

“This is an old sales pitch which agents use to get instructions – we always do our research before we make a shortlist of properties for clients to view,” said Dell. “If we see a price that seems too high we will want to use our contacts and talk to the agent to make sure that we have a realistic, motivated vendor. We don’t want to waste our clients’ time.”

Caspar Harvard-Walls, a partner at Black Brick, said that it can take years of experience to spot a price that simply doesn’t seem right, coupled with access to the latest market data. “We do our due diligence,” he said. “It may be that there is a reason for the price – it may be an outstanding property – but you do often find that there is no real reason. And if a buyer did agree to pay a crazy price for a property they would only find out, weeks later when they have had a bank valuation done, that it is not worth what they have offered. And by then they have wasted such a lot of time.”


Supersize Me

At the super prime end of London’s property market what buyers seem to be looking for is square footage, and plenty of it. The average size of homes sold for £15m or more in prime central London has shot upward over the past year.

The average £15m-plus house sold in PCL has grown from 7,000 square feet in the first half of 2022 to 11,200 square feet in the same period. Flat sales have also expanded, up from an average 4,844 to 5,232 square feet.

Unsurprisingly this means that the average spend in this sector is also on the rise, according to a report by Beauchamp Estates. It found that the average sale price has risen from £21m last year to £30m now (for houses), and from £22m to £25m (for flats).

This upsizing trend is the polar opposite to what is going on in the mainstream London market. Average prices fell by 1.6 per cent last month according to the latest Rightmove house price index, as buyers facing increased monthly repayments rein back on what they will spend.

“This end of the market has really not been impacted at all by rising interest rates,” said Harvard-Walls. “In fact, as interest rates go up they may actually be earning more from their investments and be doing better.”


New Arrivals

London’s population swells at this time of year as an annual influx of visitors and tourists arrives in the British capital. Some of the most long standing summer visitors make an annual migration from the Middle East, to escape the scorching heat at home. And many families visit so frequently, and are so fond of London, that they decide to buy a property.

This annual influx of Middle Eastern buyers has been going on since the 1970s. What has changed is their home-from-home requirements.

Traditionally these buyers would want a spacious mansion flat on the fringes of Hyde Park, either north of the park around Bayswater, or in Knightsbridge and within an easy walk of Harrods and Harvey Nicols.

“What we find is that they have been coming to London for generations, they feel very safe and welcome here, and they often went to school or university in the UK so they know London very well and regard it as a second home,” said Harvard-Walls.

But times change, and younger buyers dipping their toe in London’s property market are less excited by trophy Hyde Park adjacent addresses than their parents once were.

“The younger guys don’t necessarily want to live on the doorsteps of their parents, aunts, and uncles,” said Dell.

“What they do want is to be very looked after. They want a gym in the building, somewhere to park their car, hotel style services, and a concierge to book them a restaurant table.”

This is good news for new build developments in and around the West End, and Middle Eastern buyers have proved themselves to be loyal fans of London. “They are massively important to central London,” said Dell. “And when they buy a property they tend not to sell – it stays in the family – so they are very good from a stability point of view. They are not speculators on the London market.”


Acquisition of the month: Cheniston Gardens, Kensington, W8 – £1,700,000

We spent three months working with an Australian family who were looking for a top drawer pied a terre in Prime Central London.

They wanted a two bedroom period property, close to green space, and were particularly keen to find a light and airy home with high ceilings.

We carried out a forensic search of best in class London apartments and had a shortlist ready to view when the client was able to make a flying visit from Sydney.

The long journey was worthwhile. The family picked a lovely first floor property with two balconies, which had been stylishly and recently refurbished, and is within a short walk of Hyde and Holland parks.

Unsurprisingly this high calibre home attracted interest from a series of buyers. Our client did not make the top bid for the property, but the vendor decided to opt for our slightly lower offer because we convinced them we were organised and prepared to press ahead swiftly with the deal.

Managed Sale of the Month: The Knightsbridge Apartments, SW1X – £6,950,000

Black Brick is known for helping buyers to source properties. But we are also adept at helping them secure a sale.

The Knightsbridge Apartments is set in an enviable location, moments from Hyde Park, Knightsbridge station, and the shops and restaurants of Brompton Road, and is considered one of the very best fully serviced building in London. Homes here rarely come up for sale.

Amenities include 24 hour concierge services, a swimming pool, spa, gym, and a business suite.

This three bedroom, four bathroom apartment has been recently and stylishly interior designed making it a turnkey option for a buyer looking either for a pied a terre or a London home. For more information or to book a viewing please contact chw@black-brick.com


Black Brick International: A Focus on Paris

Many of our clients own and like to buy property globally. Purchasing overseas in unfamiliar markets requires expertise, guidance, and trusted partners. That’s why we’ve made it our mission to partner with top buying agents in key locations.

Each month we will be bringing you an “in focus” look at one of the new markets that we now cover, from Berlin to New York or Miami, Dubai to Sydney. This month we take a look at the French capital:

The city of romance is shaping up as one of the savviest spots to invest in a European bolt hole.

A new report from Knight Frank has anointed Paris as the big winner following Britain’s exit from Europe – its status as the EU’s financial heartland is being cemented by an big increase in the number of investment bankers based in there, while its profile is being raised by the imminent Rugby World Cup, which kicks off in September, and next year’s Olympic Games.

Like London, the performance of Paris’s mainstream market has been lacklustre during 2023. But the iconic arrondissements in the historic heart of the city are thriving in the post pandemic world.

City-wide, average real estate values have been hovering around the €10,000 per square metre since 2019 according to house price monitor Meilleurs Agents. But prices in the chic, central 7th Arrondissement, home of the Eiffel Tower, grew 14 per cent to just over €19,325 per square metre. Oher outperformers include the 8th, around the Champs-Élysées, up nine per cent, and the 6th, close to Le Jardin du Luxembourg, where prices have increased eight per cent.

Values in this golden triangle have a long history of investment strength, irrespective of the national and international backdrop, because of their sheer scarcity. And the strength of the dollar has encouraged an influx of American buyers over the past year, adding to demand. US buyers accounted for 55 per cent of sales to international buyers made by Junot Fine Properties.

Meanwhile, for buyers looking for the next big thing, young Parisians, firmly priced out of the city centre, are creating some brand new hotspots in the 9th and 11th arrondissements which are also worth exploring.

If you are thinking of purchasing in Paris, please contact Camilla.Dell@black-brick.com to find out how Black Brick and our network of international buying agents can assist you, and have a look at our recent Paris Case Study.

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