Forget the gloomy market data – it’s a bunfight in some parts of London…

Forget the gloomy market data – it’s a bunfight in some parts of London…

The headline figures may show prices falling, but the reality is that buyers in many prime areas are facing stiff competition for anything decent, warns Black Brick.

There’s very little similarity between the market data and what’s actually happening on the ground right now, a PCL buying agency has warned those winding up for a low-ball offer.

Black Brick suggests purchasers would do well to “disregard” the average price falls being reported in the press, as these are being driven by discounting on large new-build developments or properties in less desirable areas or even streets – and are also based on limited data (transaction volumes have been running at 55% below average, according to HMRC).

The reality is, says the firm, that certain types of properties in prime London remain very much in high demand, and forced selling has been minimised by low interest rates and government support schemes – as such, hopes of securing a chunky reduction on anything decent are fanciful…

Camilla Dell, managing partner: “There’s a big gap between what the market analysts are saying about falling prices across London and what potential buyers of high-quality properties in the best areas are finding. Buyers were led to believe during lockdown that prices would come off – in many cases, that’s simply not happening.

“Those sellers that are in the market are not desperate…There’s a real Mexican standoff.”

Many buyers have been holding fire for two or three years and are desperate to move, added Caspar Harvard-Walls, a partner at the firm: “If you’re looking in Hampstead, Barnes, or Fulham, you’re going to face a lot of competition.

“We’ve seen buyers coming in with a low-ball offer, seeing it quickly beaten, and then responding by paying the asking price or even above. Once they realise the depth of competition for good properties, it gives them the confidence to pay up.”

“Agents are rushed off their feet, but we’re not seeing the stock they are selling being replaced with new instructions: there could be a real squeeze come September.”

However, predicting the future trajectory of the market is proving tricky, said Dell: “There’s still the risk of leaving the EU without a trade deal, taxes will have to go up to pay for the Covid response, Stamp Duty for foreign buyers is going up next April, while limits on international travel will keep many overseas buyers away. It’s really hard to form a medium-term view on the market’s direction.”

What buyers want now: Top town & country buying agents compare notes on post-lockdown demand trends

Two top buying agents – one focused on prime London, and one on prime country houses – reveal what is on their clients’ most-wanted lists.

The Covid-19 pandemic has affected lives in many ways, and talk of property markets may seem inconsequential in comparison to some of these. But the lockdown has had a dramatic effect on the resi sector, with some potentially long-lasting shifts in home-buyer priorities.

At the top end, luxury property buyers seem to be re-assessing what they value most in a prospective new home. Space to live and work has risen up the priority list in both town and country, while location has in some instances become less of a factor.

Two top buying agents – Camilla Dell, focused on prime London, and Charlie Wells, focused on prime country houses – reveal what is on their clients’ most-wanted lists.

Mayfair-based Black Brick has been sourcing homes for wealthy and corporate clients in London and the South East since 2002. Founder and Managing Partner Camilla Dell talks us through the changes she is seeing in her clients’ priorities since the Coronavirus lockdown:

In Town: Camilla Dell of Black Brick

What’s Going Up:
  • Home offices. With many large corporations struggling to navigate how to bring people back to work safely, let alone get on a tube or airplane, top of the list right now is home office space. Clients want spaces where they can hide away from the kids, ideally with sound-proofed walls, but lots of natural light and adequate space to avoid hunching over a small desk, making it a pleasant space to work for extended periods

  • Wifi speed. There was a time a few a years back when buyers would ask for space for large clunky servers. The use of the “cloud” and technology like Office 365 negates the need for large servers with air conditioned units to keep the room cool. Whilst tech has moved on, fast wifi speed is still critical.

  • Basements / cellars. We’ve become accustomed to working out by ourselves with an online class or 1:1 personal trainer on Zoom. So many buyers are happy to convert a basement or cellar into a personal gym. Clients are also asking for space to consider building a swimming pools, sauna and spas

  • Gardens with space for veg patches. A big trend for those with gardens and some extra time on their hands, is buying and planting veg. Over recent months, many have valued self-sufficiency, showing children when their food comes from and the satisfaction of growing your own. The kitchen is evolving into the kitchen garden. And much like the premium that goes on a “starchitecht” property, gardens which have been designed by a celebrity garden designer have added cache.

  • Sustainability features. Clients see the benefits of developments which have recycling and waste disposal services to help control rubbish, especially where public serves have been under strain with reduced pick ups

  • Larger kitchens/ dining areas. Going forward, we expect people to do more home entertaining with a small “bubble” of friends, therefore space to cook and entertain will be higher up the wish list, possibly with personal chefs catering for small groups, with hygiene front of mind.

  • Large play rooms/ space for children to learn/ home school. Once the British winter comes and children can’t get outside as readily, space for children to play with siblings or a small bubble of friends will become the ‘new normal’ – we expect a demand for flexible spaces where children can play as they grow

  • Additional services. This has always been popular, but with an increase in online shopping and deliveries, a property with a concierge or housekeeping services will have added influence. We’re also seeing some developers being clever with added services such as private health care plans built into their management packages.

What’s Going Down

  • Proximity to the tube. The latest news from the BMA that any enclosed spaces will increase risk, means that people will be looking for alternative means of getting to work, or indeed, simply working from home more

  • Proximity to airport links. Similarly, the increase in remote working, will decrease the demand for international travel, so a home on the Piccadilly Line or close to the Heathrow Express will be less important

  • Apartment blocks. Especially those with shared facilities such as pools/gyms will become a lower priority, as people are now adept at training in their own homes

In the Country: Charlie Wells of Prime Purchase

Prime Purchase is the independent buying arm of Savills; it has been representing and advising purchasers across the country since 2002. Hampshire-based Managing Director Charlie Wells reveals what is on their clients’ most wanted list:

  • Number one is the general aesthetic and how the house looks – everyone wants a home they perceive to be attractive. This is where it gets tricky as tastes differ. One buyer may want a period property with high ceilings and Georgian splendour, another may want a more modest farmhouse or cottage. Some will want to preserve existing features and make the most of them, others will say they want period charm and then replace that charm with clean lines and modern finishes. It is all down to personal taste.

  • The need for square feet and acreage is important with buyers potentially requiring room to accommodate a hobby. The space you need and the space you want are two different things so never sell off outlying land until the main asset is sold.

  • Privacy and seclusion, particularly in the country, are high on the must-have list. Privacy comes in different forms, from not wanting your neighbours to see you from their upstairs study window to not seeing another house at all. For most people, it’s about not seeing anyone else and ideally not hearing them either.

  • Absence of blights, usually planes, trains and automobiles but also pylons and electricity wires which blight the view. However, the very presence of a blight can make a house affordable to the buyer so it’s not the end of the world to have them. Noisy neighbours tend to be highly undesirable, but it comes down to what you are used to – I live near a farm that houses 350 cattle in winter. Their bellowing and general smell is reassuring to a country boy like me but others might not be able to cope.

  • Train, rail and road access. Is your property an hour from the capital or two or three? Buyers have their limits whether they travel daily, weekly or occasionally. Covid-19 and homeworking will, I think, relax people’s views on a slightly longer commute in order to gain more space.

  • Proximity of schools, whether a good state primary and secondary, or private. Many of our overseas buyers won’t consider boarding schools and need to live near a good private school so they can take their children to school every day.

  • Surrounding countryside. Having quiet country lanes and a network of public rights of way for walking, running, cycling or riding have become especially important recently.

  • Proximity to an attractive town or large village. Most buyers want some decent pubs, restaurants, cafés and bars fairly nearby – most popular areas will already have these.

  • Friends, old and new. People want to be near their friends or have the opportunity to plug into a new social network for themselves and their children. Schools, pubs and sport all play a big part here.

London buying agency looks to Hong Kong after a ‘surge’ of interest from Asian investors

Black Brick is heading to Hong Kong to capitalise on an international investment trend

Camilla Dell’s buying agency Black Brick is taking a team to Hong Kong after seeing “a surge in interest from Asians looking to invest in the central London property market”.

“A surge in leads” has come through in the last six months, reports the firm, mainly from India, Hong Kong and Saudi Arabia (but also from China, Oman, Lebanon and Singapore). The agency has also completed on ten international-buyer deals in the last 18 months, representing clients from Singapore, Oman, Saudi Arabia, Jordan, India and Lebanon.

Now Black Brick partner Caspar Harvard Walls (pictured) is heading to Hong Kong at the end of this month to charm private bankers, family offices and HNW expats living in Singapore and Hong Kong. “It is extremely difficult for those clients to conduct a London property search from so overseas,” notes Camilla Dell, “so using a buying agent makes sense.”

Camilla Dell, Managing Partner at Black Brick: “Asia has always been a key market for us and with a rise in interest from this region, we are keen to reach out to potential clients who need the services of a buying agent.

“Many Asian buyers can also often be confused by the sheer number of new build developments being advertised by London developers. Even for domestic buyers, it can be very confusing. We are able to help our clients to decide which development to buy above another and the nuances of the market. There are many pitfalls which overseas buyers can make when buying without advice such as overpaying, buying the wrong unit, buying in the wrong location and having the wrong advisors. For example, often developers will push buyers to use their own in-house solicitors and mortgage brokers who may not provide impartial advice.

“We are visiting Hong Kong to address this issue, and to meet with private banks, family offices and other professional intermediaries to spread the message that there is another way of buying. Paying for advice can more than pay for itself and avoid costly mistakes in the long run.”

https://www.black-brick.com/young-street

 

Chelsea mansion’s £16.5m price cut does the trick

Super-fast turnaround on Cresswell Place provides further proof that there is a market – when the price is right…

Turnkey Mansion

A turnkey mansion in Chelsea that took a well-publicised £16.5m price cut last month has been snapped up pretty sharpish.

The “one-off” behemoth on Cresswell Place came to market amid a blaze of publicity last summer at £37.5m, following a full-scale redevelopment programme at the hands of luxury specialist Albyns. A sale failed to materialise, however, and the property was put into receivership and relaunched just a couple of weeks ago at £20.95m – 44% below the original figure.

Last we heard, 50 viewings had already been booked in pre-launch, and we’re told a deal has already gone through (although the purchase price has yet to be confirmed).

The six-year project delivered an 11,046 square foot pile with bells and whistles aplenty; along with some glorious reception spaces and five bedroom suites, some “incredible” leisure facilities have been installed, including a 15m swimming pool, gym and spa. There’s also a car stacker for two large vehicles, a passenger lift to all floors, state-of-the-art tech throughout, and a separate staff area.

An unconfirmed report suggested an offer at £36m “fell away” last year.

Mayfair-based buying agency Black Brick recently flagged up a rise in the number of newly-developed properties going into receivership. The firm’s Camilla Dell said: “Sellers at every price point, including super-prime, are becoming more realistic. Understanding who you are buying from and their motivation for selling is crucial in order to get the best outcome on price. We have noticed an increase in the number of newly developed properties that were on the market for over inflated prices back in 2015/16/17 and which are now in receivership – in other words developers that got their timings wrong and are now suffering the consequences. Now could be an excellent time for buyers at the top end of the market to take advantage of sellers looking to close a deal and receivers looking to get their money back on un-sold properties.”

It’s not just PCL properties either. The remarkable Chalet Estate in Surrey has just reappeared on the open market on the instructions of LPA Receivers with an asking of £5m (a good £8m below the £13m it was originally launched at in 2016), with contents available by separate negotiation…

 

 

Black Brick signs top negotiator from Marsh and Parsons

New recruit Alex Oliver joins from M&P’s Notting Hill office

by PrimeResi September 14, 2017

Black Brick has bolstered its buying team with the hire of a top negotiator from Marsh & Parsons.

Alex Oliver has joined the Bruton Place-based agency as a buying consultant, after a successful stint at M&P’s Notting Hill office, where he was their highest-performing sales negotiator. He spent a couple of years at Foxtons before that, and has sold in excess of £50m worth of property to date.

Now nine-strong, the Black Brick team tripled its turnover in 2016 to hit £3m, and we hear there’s plans for further expansion in the coming months.

Camilla Dell, Managing Partner: “We are delighted to welcome Alex to the team. As a boutique company, we work on a one to one, bespoke basis with our clients and Alex’s knowledge, expertise and personal approach is the perfect fit for our company ethos.”

Buying agency secures Park Lane base for ‘London’s most prestigious vault’

Buying agency secures Park Lane base for ‘London’s most prestigious vault’

Prime Resi

Unusual off-market acquisition next to the Dorchester…

Mayfair buying agency Black Brick has just finalised an interesting acquisition on Park Lane.In a departure from high-end house and apartment sourcing, the firm dug deep to secure an off-market bank vault next to the Dorchester for the South African owner of IBV International Vaults, Ashok Sewnarain, who has plans for a super-luxe storage concept.

The 2,077 square foot subterranean space, formerly leased to Barclays Bank, has been secured on a long lease of 19 years at a passing rent of £172,500 per annum, with a rent-free period to allow for a “luxurious” refurbishment.

IBV will be launching the offering in November as “London’s most prestigious vault”, aimed at HNWIs looking to store their jewels, gold and priceless belongings.

“Guests” will be collected in a chauffeur driven car and driven to the high security premises, where they will enter an “opulent” entrance, complete with a 24 carat gold flecked pavement, and meet one of the firm’s representatives. 3,300 safety boxes will be available in total, and the company also plans to sell gold bars and precious metals from the site.

Camilla Dell, Managing Partner at Black Brick: “As a buying agency which specialises in residential property, this was a very unusual deal for us, made possible by our excellent connections as the vault was only available off-market. Our client operates IBV vaults in across several locations across South Africa but was keen to expand into London, where he could offer his VIP service to the world’s elite.

“The vault is set to become the most prestigious and luxurious in London and marks a growing trend for discerning individuals to store their precious jewels and personal items.”

Barclays sold another of its vaults off in 2016 to Chinese Bank ICBC who needed somewhere to store £57 billion of gold bullion. The location remains a secret…

Super-prime storage has been in the news already this year; In January, high-spec property developer Amazon delivered a 10,000 square foot, £30m, three-storey underground super-prime storage facility for the most valuable of valuables, located 40 feet beneath Great Portland Street.

The Armitage Vaults are “the capital’s answer to Fort Knox”, said the developer, which has spent five years on the project. They offer high net worth types somewhere hyper-secure and quite plush to leave anything from artworks, jewels and wine to documents, luggage and ski paraphernalia, on either a short- or long-let basis. And there’s not a bulk-buy offer on packing boxes in sight.

Amazon’s new ‘Armitage Vaults’ are located 40 feet beneath Great Portland Street.

internationalvaults.com

‘Look at the property’s value in 2014, take off the additional Stamp Duty, and use that as a benchmark’ – Black Brick

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
black-brick.com

Property magnate becomes the American President: The prime resi industry reacts

View the article online here

The forecast for the prime London market? That depends on which part…

Forecast season may be upon us, but headline figures are of little use in the micro-markets of prime London, says Camilla Dell…

As we approach the year end, the UK’s leading agents and property analysts have the tough job of predicting the outlook of the property market. This year, their job is tougher than ever as the UK market faces extreme uncertainty as a consequence of the Brexit vote. Not only will the terms of the UK’s relationship with the EU have a profound effect on the country’s overall economic performance over the next few years, but the treatment of the financial sector will bear particularly on the London property market.

The collective response to this uncertainty is expected to be inaction, with both JLL and Savills predicting no growth for Prime Central London (PCL) in 2017. This is followed by a growth of 15.2% and 20.8% respectively over five years to 2021. Although we largely agree, we caution the usefulness of a single number for such a heterogeneous market as prime London. As we have seen in the past, just as some geographic areas have performed better than others; some parts of the market are likely to outperform the average.

For example, we expect the lower end, below £1 million, to remain active and resilient, supported by government programmes, such as Right to Buy. Furthermore, the current stamp duty regime continues to make properties at this end of the market relatively attractive to investors. This implies that outer prime locations are likely to do better than a more traditional – and more expensive – PCL.

There will also be outliers at the higher end of the market; we’re seeing stock dry up as vendors refuse to countenance the discounts needed to close deals. This can have effects in both directions; those sellers which come to the market are likely to be highly motivated to sell, and open to offers, while limited supply can see buyers pay up for high quality properties.

For the opposite reason, we remain very cautious on the new-build segment, which we think is still the most vulnerable part of the market. Some parts of London are flooded with supply and we’re likely to see properties offered with substantial discounts.

Of course, there is a near-term wildcard, in the Chancellor of the Exchequer’s Autumn Statement, due on 23 November. Budgets under George Osborne delivered raid after raid on the property market and we don’t know what – if anything – Philip Hammond has up his sleeve.

 

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