10 November 2008, Wealth Management Magazine
By Camilla Dell
Although it seems that the UK residential property market is in freefall, there remains a demand for prestige London properties, especially amongst international clients, says Camilla Dell, managing director of Black Brick Property Solutions. She outlines how private banks can benefit from working alongside property search agents to offer clients a complete package for their financial and property needs.
There is no doubt that there is uncertainty in the current property market, with a general sense of negativity portrayed by the media. But although there is a substantial fall in demand in the sub £5 million market, we are seeing a distinct increase in activity amongst international high net worth individuals, who are relatively unaffected by the credit markets. This section of the market, which has a strong affinity with London as a business capital, is proving to be resilient to the wider market changes. At Black Brick, a top end property search agent based in London, we have seen the average budget of our clients increase from £1.6million in 2007 to £5.6million in 2008, showing that the very wealthy are still vigorously seeking property. Black Brick works closely with private bankers to find property for their clients. A large proportion of our clients come from private bank referrals, many of whom are of Middle Eastern and African origin with backgrounds in the oil industry. As oil prices continue to increase and the oil sector continues to expand those involved are not so adversely affected by the shaky economic climate. They are often owner-occupiers looking for homes in London either as a pied á terre or as a family base to take advantage of the UK education system. We are also instructed by several investment clients to buy sizeable property portfolios, ranging from £10million to £15million. A bank’s engagement of a buying consultant to assist their clients through the minefield of the property market provides a win-win situation. Bankers retain control over structural and lending aspects of the deal. The agent focuses on sourcing the property and closing the deal so that the client receives a duality of excellent service. We build our business in much the same way as bankers build theirs; looking after a small number of high net worth individuals and ensuring that they receive exceptional service. These parallels enable us to provide a perfect complement to private banking. Our objectives are the same: to achieve the very best deal for our clients, and to do it quickly. Involving a firm like Black Brick in the process not only saves the bankers’ time, but, by working together, we can bring the client to the point of purchase that much more quickly and efficiently. Clients left unaided can look for years to find the perfect property, and from a banking point of view this can be extremely frustrating. Introducing clients to a firm like Black Brick allows them to take advantage of unrivalled expertise in the property market. Our ability to source properties off market and our wealth of contacts means we are well positioned to meet the needs of even the most discerning clients. This incomparable knowledge of the industry and hard work at the negotiation stage allows clients to purchase the right property at the right price and enhances the chances of a deal’s completion. In addition, our appetite for securing a good deal means that in 2007 we succeeded in saving an average of 5.7 percent off asking prices for our clients, and 11.5 percent during 2008. More than ever before, private bankers understand that their cash rich, time poor clients want transactions to go through with as much ease as possible, which is where a property search firm like Black Brick can come in. Not only does the partnership function well on an individual transaction basis, but we also aim to build up long-term relationships with our banker clients, offering referral fees and incentives, and even collaborating on joint pitches to overseas clients, where we travel to potential clients’ homes, be they in South or West Africa, the Middle East, Asia or Europe. Regular feedback shows that this kind of partnership helps build better relationships between bankers and their clients. The more we work together, the more we are both in the position to refer new business in either direction. In general our clients want property in prime Central London locations, such as Belgravia, Knightsbridge, Chelsea, Kensington, Hampstead and St John’s Wood.
Secure portered blocks or gated developments are favoured, as many of our clients do not live permanently in the UK. As with any good property search agent, we have extensive knowledge of the London property market. Drawing on contacts built up over years in the industry, most acquisitions are secured off market. London is very much holding it’s own as Europe’s business capital and, as private bankers will know, clients still have a need for a London home, whether for work or family reasons. The city continues to offer the type of buyer we deal with a very attractive base, as the top end of the market looks to remain incredibly active. By working together, private bankers and property search agents, particularly those that are independent and owner-managed, not only ensure a thorough and efficient service for their clients, but look to maximise their own business opportunities. There is much value to be gained in encouraging such a relationship.