7 June 2017, Prime Resi
Prime London’s market seems to be bottoming out, agrees Camilla Dell
by PrimeResi June 6, 2017
Thing are looking up in the Prime Central London property market, says Black Brick boss Camilla Dell, despite all the uncertainty swirling around the General Election and Brexit negotiations.
Dell’s calling of the bottom of the market (or at least the beginning of the end of a downward run) chimes with analysis from a fleet of other key players including Cluttons, Knight Frank, JLL, Savills and – most emphatically – Humberts.
But Dell’s gone a bit further, offering up a practical insight into how one benchmarking play is getting decent amounts off those unrealistic asking prices for its clients: 2014 prices, less the value of George Osborne’s additional stamp duty, seems to be the magic formula for buyers.
Black Brick says it has negotiated below asking price on 67% of the properties recently purchased on behalf of clients, with an average reduction of 7%.
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, so buyers are wanting to get on and purchase.
The falls in Prime London pricing over the last 12 months or so correlate very closely with the Stamp Duty increase
We don’t expect prices to fall much further. 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.
This has given 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 a buying agent can really help – we are going in, negotiating hard – and it’s working.
The fall in sterling has seen cost reductions in the 30-40% range for dollar buyers which is partly the reason why these buyers are keen to invest. Many have decided that this is the year to add to their London portfolios and we have been instructed by a number of families to start the property search. Based on a Conservative win on 8th June, we don’t expect to see any material effects on the London property market as a result of the general election.
Camilla Dell is Managing Director of Black Brick