The publication of the election manifestos has confirmed our view – the forthcoming General Election on 8 June is likely to have little significance for London’s prime residential property market.
The manifestos of the three main parties all focus on supply at the bottom end of the market, with the Conservatives emphasising social housing more than in prior years, Labour supporting an extension of the existing help-to-buy policy, and the Liberal Democrats proposing a target of 300,000 new homes each year.
Two observations are worth making. First is that housing and property policy is not the priority it was in the 2015 election. Second, with most polls continuing to predict a comfortable win for the Conservatives, it is unlikely that Labour or the Liberal Democrats will be in any position to promote their policies.
Aside from headline housing policy, there are no indications in the Conservative manifesto or in comments from Tory politicians that changes to property taxes are on the cards. Stamp Duty was raised a number of times under the previous administration, and the clear message from the sector is that a period of stability would be welcomed.
Reinforcing this ‘steady-as-she-goes’ message is research from agent Knight Frank which finds that elections do not have much impact on the UK property market. “In terms of buyer demand across the country, no conclusive trend is apparent around election time,” Grainne Gilmore, head of UK residential research at Knight Frank, told PropertyWire.
“As we suggested last month, the most important thing for London’s property market is Brexit and how it’s negotiated,” says Camilla Dell, Managing Partner at Black Brick, with a large-scale loss of finance sector jobs to other EU financial centres being the worst-case outcome.
If such job losses were to materialise, the effect would be most felt in the £2-7 million bracket in areas of West London popular with bankers, such as Notting Hill, South Kensington and Knightsbridge. “But even here, there are lots of variables at play,” she adds. “Would those affected necessarily sell-up and move their families? Would they want to keep a foothold in the London market? There are still a lot of question marks.”
Recent data suggests that levels of activity are continuing to rise, which we expect to continue regardless of the election. According to figures from Strutt & Parker, transactions levels have risen for the last three quarters in Prime Central London.
“It is believed that the market may have already experienced the bulk of price falls,” the estate agency says. “In addition, the recent weakness in sterling has played a part in attracting overseas purchasers and given a spur to higher value market sector activity.”
This chimes with our experience. We are seeing vendors and agents become more realistic with pricing, and the market has now largely absorbed the Stamp Duty increases that came into force last April.
Indeed, the falls in Prime London pricing over the last 12 months or so correlate very closely with the Stamp Duty increase. Those properties at the lower end of the market, where Stamp Duty was basically unchanged, have held their value well. However, for more expensive property, price falls tend to mirror the increased Stamp Duty charge.
“It’s essentially worked as a sellers’ tax,” says Black Brick Partner Caspar Harvard-Walls. “But it gives a useful yardstick on which to negotiate with sellers – we can look at the property’s value in 2014, take off the additional Stamp Duty, and use that as a benchmark. It’s proving a successful approach for us and our clients.”
“It’s in a flat market like this where you really want a buying agent acting on your behalf,” he continues. “We are going in, negotiating hard – and it’s working.”
We are pleased to report that Black Brick has received a gratifying stamp of approval for our Vacant Care service from Azur, an arm of insurance giant AIG. The company offers, through insurance brokers, buildings and contents protection for high-value homes.
One of the greatest risks for homeowners is that of water damage – and risk levels rise dramatically if homes are left unoccupied for long periods of time. Our vacant care service involves weekly inspections, maintaining minimum temperatures in cold periods to prevent pipes freezing and, in some cases, installing meters that automatically detect leaks.
Azur carefully reviewed the policies and processes that underpin our vacant care service, found that it would substantially reduce risks faced by homeowners, and have named Black Brick as an approved supplier. “This is fantastic news and demonstrates how valuable our service is to insurers and their clients,” says Dell.
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Black Brick was also recognized in the fifth Wealth Adviser awards, winning the leading publication’s Best Property Adviser gong. This is the second time we have won this prestigious award. The awards are voted on by Wealth Adviser’s readers, who include wealth managers, financial advisors, fund managers, family offices, law firms, accounting firms and other industry professionals, before being subjected to a final review by the publication’s senior editorial team.
Partner Caspar Harvard-Walls accepted the award from Beverly Chandler, Editor of Global Fund Media at an award ceremony held on the 19th May at the Reform Club on Pall Mall.
We have also been selected as one of only nine buying agents listed in the new High Net Worth Guide produced by Chambers & Partners, the leading international legal directory. Its guide provides “objective guidance” on the law firms and service providers targeting the international private wealth market.
Our European clients were looking for a pied-a-terre that could also be used by their son while he is at university. While they were open-minded about the location, they wanted at least two bedrooms, to be in a safe area and be close to a high street and Tube station.
We found an attractive end-of-terrace 3-bed Victorian conversion close to West Hampstead’s stations, in good condition but with the potential for value-adding improvements. We successfully negotiated £72,500 off the asking price, securing the property for £1.2225 million, or £836 per square foot – substantially below the £950/square foot-plus for which flats in the area regularly sell.
Further up the prime London market, we secured for £21.15 million a stunning 4-bed apartment last month in the Clarges Mayfair development, an exclusive boutique scheme of 34 properties backing on to Green Park.
Our Russian client had taken advantage of our Rental Search Service when he first moved to London, allowing him to take his time getting to know the city. When he was ready to buy, he wanted to stay in the same neighbourhood, but had very specific and exacting requirements – lateral space, 24-hour concierge and security, a good view and ideally a swimming pool.
Although Clarges ticked all the boxes, no apartments overlooking Green Park were available. However, through our network we found an off-market seller, and we were able to negotiate 10%, or £2.35 million, off the asking price.
Knightsbridge has seen prices fall around 6.4% in the last 12 months, so our client looking to sell their 3 bed apartment on Hans Road faced a challenge. To compound the situation, the property had been rented out, so was looking tired, and was unfurnished.
We suggested and oversaw a light refurbishment, and also recommended a company that could provide temporary furniture to ‘dress’ the property – as buyers can often struggle to visualise how space might be used in an empty property.
The result was that we were able to secure an offer of £2.1 million, close to the asking price of £2.25 million, despite difficult market conditions.
We have been instructed to manage the sale of this stunning 2 bedroom garden flat right in the heart of West Hampstead. Measuring 1207 sq. feet, the property has two generous bedrooms, 2 bathrooms, reception room and large eat in kitchen leading out onto a beautiful west facing garden. The property has recently been completely renovated by the current owners and is presented in excellent condition. The asking price is £1.2 million.
Please contact Camilla.Dell@black-brick.com for further details or to arrange a viewing.