Sellers stuck in denial are forced to accept the days of property price highs are over

By Alexandra Goss

Two houses were recently put on the market for £15m, one in Cornwall, the other in West Sussex. They were luxurious and sprawling, but they definitely weren’t worth that much.

“These were exceptional properties but their owners, aided and abetted by estate agents fighting for listings, had simply misread the market;’ says Philip Harvey, of the buying agency, Property Vision. His clients paid £10.5m and £9.5m respectively for them.

“We are now in a totally fragmented market, with the very best of the best remaining firm, and the overnriced and comnromised failing to sell!’

Price reductions are happening across the country. Hamptons estate agency says almost half of the properties that sold in April had been reduced, while separate data from the property portal Zoopla reveals that homes nationally are selling for an average of

£16,000 below the asking_nrice, equal to 3pc.

At the very top of the market, cuts of millions of pounds are not uncommon, such as with Harvey’s £5.5m discount.

“Asking prices are often quite out of sync with reality;’ says Adrian Anderson, of the high-end mortgage broker, Anderson Harris.

“Some owners are still expecting to get the prices they could have got during the ‘hot’ Covid market. Many sellers also don’t have to sell. So if someone comes along and pays what they want, they’ll take the offer. Otherwise, they’ll just stay put:’

Consumer confidence is shaky against a weak economic background, and affordability is stretched due to historically high mortgage rates. There is also a stark imbalance between supply and demand.

The property portal Rightmove says the number of homes for sale is the highest in a decade, while figures from Knight Frank estate agency show that its new UK sales instructions are currently about a fifth higher than the five-year average (excluding 2020), while the number of new prospective buyers is a fifth lower.

“Buyers are able to take their time at the moment because they have so much to choose from;’ said Andrew Groocock, of Knight Frank.

London squeeze

The most expensive region for housing is also recording more reductions.

In research for The Telegraph, Zoopla has looked at the areas with the highest percentage of homes for sale that have been reduced by at least 5pc in the past three months and found that central London’s WC postcode tops the table, with 18.6pc of properties on the market there seeing a price cut. The SW, EC, SE and W postcodes in the capital also feature in the top 10.

Discounts are biggest on the priciest homes. Of the homes in central London valued at between £Im and £10m that sold in the first three months of the year, 82pc went for less than the asking price, according to separate data from Coutts.

The bank adds that the level of discounting has reached a five-year high, with an average reduction of 9.3pc across Prime London in the first quarter of 2025, rising to 15pc in Mayfair and St James’s.

Tom Kain, of the buying agency Black Brick, says: “We have not paid full price for a property for a while. After a long period of denial, vendors have finally accepted that their properties are no longer worth what they might have sold for at the height of the pandemic:’

London houses that need updating are recording some of the biggest discounts, says Lulu Egerton, of Strutt & Parker estate agency in Chelsea. She is selling a pretty three-bedroom house on Pavilion Road that was put on sale almost a year ago with another agent at £6.95m. Egerton is now marketing it at £4.55m, a reduction of more than a third.

“This house was remodelled 10 years ago and now, because the costs and time taken for a refurbishment have spiralled, buyers would rather pay more for something that’s done up;’ Egerton says. “Unlike flats, where buyers come and go more frequently, people purchase houses for the longer term. This means properties often come to the market in a less good condition:’

Egerton adds that there is no shortage of people who want to live centrally in London.

“However, they’re saying that it’s less about buying the cheap thing than the right thing;’ she explains. “Some properties we are showing [to prospective buyers] 80, 90 or even 100 times:’

There’s a glut of flats currently for sale in expensive areas such as Chelsea, South Kensington and Notting Hill, according to Sara Ransom, of Stacks Property Search.

“There is a huge amount of property being offloaded by investors. It makes very little sense to be a private landlord in a climate where the responsibilities are becoming more onerous, maintenance costs are rising, and it’s hard to see any capital growth in the near future;’ she says.

“Non-doms are wanting to get their money out of the  country too:’

Southern discomfort

Price cuts are most prevalent across southern England. Property data company, TwentyCi, says 4lpc of listings in the South East have undergone at least one price reduction, higher than the 37pc average for the UK.

According to Zoopla’s analysis, the BN postcode, covering Brighton and Hove, has recorded the second-highest levels of discounting nationally, with 13.6pc of properties on sale reduced by at least 5pc.

Also in the top 20 are the Canterbury (CT) and Rochester (ME) postcodes in Kent, and the Guildford (GU) postcode in Surrey.

Richard Donnell, of Zoopla, says: “The housing market in southern England is where house price inflation is lowest and currently stands at less than lpc a year. There is demand for homes, but buyers are price-sensitive given higher mortgage rates:’

In the east of England, Norwich properties are also being widely reduced, with 12.3pc having their price cut by at least 5pc.

Polly Hughes, of Savills estate agency, says: “Properties that are realistically priced from the outset continue to perform well, with some even generating multiple offers and achieving sales above the guide price.

“However, many properties priced optimistically in Norwich are struggling to attract viewings. Effective price reductions are in the region of 7pc to lOpc;’

‘Bargains’ aren’t always what they seem

The desire to get a good deal is even stronger in a buyers’ market, but just because something has been reduced, doesn’t mean it’s a bargain – as you could still be paying too much.

Jo Eccles, of the buying agency, Eccord, says that, in many cases, asking prices are being set deliberately high to factor in room for negotiation. “However, buyers need to be aware that, even if they secure what appears to be a good discount, they may still be overpaying substantially.”

She tells the story of a buyer who negotiated £lm off the £10m price of a house in south west London. “He’s delighted with the discount, but the property needs a lot of work and, in reality, isn’t worth more than £Sm;’ Eccles says.

“In a muddled market like this, it’s very easy to overpay. Opportunities are certainly there, but buyers need to tread carefully, do their pricing due diligence and take realistic account of refurbishment costs:’

The price must be right

If you’re selling your home, setting a realistic asking price is crucial.

Robin Chalk, of Anderson Rose estate agency in London, says: “Properties get the most exposure at launch, so it is all the more important to go to the market at a price that prompts immediate interest:’

If sellers price too high to start with and then reduce, it can take over two months longer to find a buyer, according to Colleen Babcock, of Rightmove.

“Our data also shows there has been a 32pc increase in the number of sellers who have swapped estate agent to try to find a buyer;’ Babcock explains. “This reflects the high market competition, and the frustration of some owners that their homes aren’t selling, a process made much harder by setting an over-optimistic price to begin with:’

Indeed, some estate agents are over-valuing properties by up to 25pcjust to win the sales instruction, claims Jess Simpson, of the rural agency Stoneacre Advisors.

“It takes a very long time to manage and modify sellers’ price expectations after that;’ she says. “No one wins when the property is over-valued:’

Yet this may mean facing the uncomfortable truth of selling at a loss. Average Prices in Prime central London have dropped 19pc over the last decade, Knight Frank’s figures show, due to factors such as higher taxes and successive bouts of political uncertainty.

The estate agency says average prices in the “country”, which covers a range of urban and rural markets above £750,000 outside London, are 8pc down from their peak in 2022, when mortgage rates were under 2pc and the race for space was in full swing.

“As the well-worn disclaimer goes: ‘The value of your investment may go down as well as up’;’ Harvey says. “And money spent definitely doesn’t equal a commensurate increase in value:’

A cut above the rest

Reductions can work successfully to sell a home – as demonstrated by a recent sale by Harry Chennells, of Chef-fins estate agency in Cambridge. The house was initially listed at £525,000, reduced after a month to £495,000.

“This shift sparked renewed activity and, following a round of competitive bidding, it ultimately sold for £530,000;’ Chennells says.

If your home isn’t selling, you need to make enough of a reduction to capture the attention of new buyers, says Graham Lawes, of JLL Residential.

“Of course, this will often be proportional to the value of the home, but it’s also crucial to get it down to the next price bracket on the property portals to open it up to a whole new market;’ he explains.

Putting an exact figure on what constitutes a meaningful reduction is tricky, says Paddy Pritchard-Gordon, of buying agency, Prime Purchase.

“Some properties are priced sensibly, others aren’t. Some may need to go down 20pc, others l0pc;’ he says. “However, you can’t go down 2pc or 3pc, it normally has to be 5pc to !Ope:’

Otherwise, Pritchard-Gordon explains, you end up reducing a bit, which doesn’t have any effect, and then reducing again.

“This makes you look desperate – it’s better to have one hard hit;’ he says. “The message you are putting out there by reducing the price is that you are listening to the market. It’s not a sign of desperation, you just want to sell:’

Faced with diminishing returns for hard work, middle-class families are fed up

By Alexandra Goss

Sarah and her husband Jack live in a leafy part of south-west London, own a holiday home on Spain’s Costa Brava and send their two young daughters to private schools. They work hard – Sarah is in PR and Jack is a cryptocurrency trader – and are well paid. Yet they want out of the UK.

“All our costs have gone up, from our mortgage rate to school fees, and living in London is really expensive,” says Sarah, who is in her 40s and did not want to reveal her real name.

“The addition of VAT [on school fees] will affect us. If you’re working hard, you want to have some reward for it. I know we are privileged, but we feel we are constantly chasing our tails.”

The couple both do their jobs remotely and are planning to move abroad. “And we are not the only ones seriously considering it,” Sarah adds. “It’s the biggest topic of conversation with friends at dinner parties or at the school gates.”

Scarcely a day goes by without a headline claiming the rich are checking out of Britain due to fears over the scale of Labour’s tax raid on high earners. VAT will be levied on private school fees from January and speculation is rife that the Chancellor will announce increases to capital gains tax and inheritance tax in the Budget on October 30.

The Adam Smith Institute, a think tank, has argued that people are leaving because the country is “a hostile culture for wealth creators”. It forecast that the share of the population who are millionaires will plunge by 20pc over the next five years, from 4.5pc now to 3.6pc.

Henley & Partners, which helps wealthy investors move overseas, says Britain is on track to lose a record 9,500 millionaires this year – more than any other country in the world except China. The firm says the number of UK enquiries it is receiving for alternative citizenship and residency programmes is the highest ever, with a record number of actual applications made in the second quarter of this year, representing a 325pc increase compared to the first quarter.

Au revoir, non-doms

Most of those leaving are non-doms, who reside in the UK but are domiciled elsewhere for tax purposes and pay UK tax only on the money they earn in this country. Some 74,000 people claimed non-dom status in 2022-23, according to HM Revenue & Customs.

While these wealthy foreigners have always come and gone, they now seem to be leaving in higher numbers, or are not coming here in the first place. Sales of super-expensive London homes over £10m fell 22pc in the year to July compared to the preceding 12-month period, according to Knight Frank estate agency.

Supply of these pricey properties is up: in the capital’s 12 central and most expensive postcodes, the number of homes on the market is 6.2pc higher now than last year, according to website Propcast.

Under changes announced by the Tory government, the existing non-dom tax regime is ending in April 2025. Labour’s first Budget will likely include details of further restrictions, although the Chancellor is understood to be rowing back over fears that it would force so many foreigners to leave it could hit tax revenues.

A further non-dom crackdown is what really has them worried. Marilyn McKeever, from the private wealth team at the law firm BDB Pitmans, says: “Many non-doms are leaving the UK or have already left. More have a bag by the door and are nervously waiting for the Budget.”

In May, a non-dom rushed to buy a house in the Bahamas and has now moved there and put his house in Knightsbridge on the market. As with the middle-class family in south-west London, it is the worried dinner party chatter and WhatsApp messages among friends that have prompted these moves.

Philip Hillier, of HG Christie estate agency, says: “One of the reasons he bought so quickly was because a lot of his non-dom friends were discussing leaving as well. He wanted to get out here before there was a rush and has since referred three friends to us.”

However, non-doms are far from the only ones eyeing the exit – there are the likes of Sarah and James, too.

“Tax is the primary topic of conversation with our clients at the moment, whether they are non-doms or not,” says Roarie Scarisbrick, from the buying agency Property Vision. “The general Labour narrative about impending doom does not help, either.”

It’s not all about tax, though

Robert Salter, of accountancy firm Blick Rothenberg, says: “Covid and the move to flexible working has resulted in many people partially relocating to countries such as Spain and France and becoming ‘treaty resident’ in that location. And, in my experience, they are primarily moving for non-tax reasons such as a better lifestyle overseas.”

And this doesn’t only apply to the top 1pc. Sarah and James aren’t non-doms or hugely wealthy – they have a mortgage, after all. “The quality of life in the UK just isn’t there anymore,” Sarah says. “Things don’t work and it all feels a bit downhearted.”

Crime is another factor. “Crime is bad all over the world but London is perceived to be up there with the worst,” says Charles McDowell, of the buying agency McDowell Properties.

“Many wealthy people now also see the UK as unwelcoming and unrewarding, and a lot of younger ones are heading elsewhere. It’s a brain drain like the 1970s, at a time when people are inherently more mobile anyway.”

Where are they going?

Locations such as Dubai and Singapore are increasingly enticing young high earners and ambitious professionals, says Toby Downes, of the buying agency Haringtons UK. “These places offer favourable tax regimes and vibrant career opportunities that are becoming hard to resist.”

Jason, a banker, has just secured a job in Dubai. He has given notice to his London firm and will start before Christmas; his wife and two children will move from their home in south-east England to join him “as soon as they can”.

“I’m not a non-dom and although I’m a high earner compared to many, working in the City is nowhere near as lucrative as it used to be,” explains Jason, who is in his early 40s and wanted to speak under a pseudonym.

“Moving to the UAE seems like a no-brainer. My six-figure salary is similar to what I’ve been getting in London, but my new employer will pay my rent for a year and pay for my children to attend an international school. It’s also exciting to be starting somewhere new when the UK feels so depressing right now.”

The UAE is a top location for many people looking to leave the UK; it’s the main place Sarah and James are considering, too. The country offers guaranteed sunshine, air-conditioned shopping and zero income tax, and it’s also a popular choice for schooling.

GEMS Education, one of the world’s largest private school operators, has seen a steady increase in UK families moving to its network of 44 schools in the UAE in the past two years.

Among them are the children of David Harkin, chief executive of the global education company 8billionideas, who recently relocated with his family to Dubai from the UK.

“Dubai has become one of the most innovative places when it comes to business and education, so it made absolute sense to relocate here and to also have better access to different parts of the world,” Harkin says. “Also, in Dubai, the schools’ extra-curricular activities are second to none, while the safety of the city appeals.”

Portugal is seeing increased interest thanks to its climate, lifestyle and perks such as no inheritance tax and a range of visas designed to appeal to high-net-worth individuals and their families. The Portuguese Chamber of Commerce in the UK says more than 7,500 British people have attended its “Moving to Portugal” events.

There has also been a boom in rich international relocators to Italy, where the non-Italian income of residents is tax-free so long as they pay a flat fee of €200,000 (£167,500) every year.

Diletta Giorgolo Spinola, of Sotheby’s International Realty, says: “There has been a dramatic increase in people of all nationalities, including non-doms previously resident in the UK, looking to move to Italy. In Milan, 80pc of all overseas purchasers are flat-tax buyers.”

Other British people are heading for the sunny shores of Spain. Charlie Mullins, founder of Pimlico Plumbers, announced last month he was selling his £10m-plus London penthouseto become a permanent resident in Marbella, while Nick Trafford, of Lucas Fox, an estate agency, says Barcelona is becoming more popular with British expats.

One in four sales in December were struck by the scourge of a renegotiated fee

By Alexandra Goss

Bargain-hunting home buyers have caused a spike in “gazundering”, a tactic when a buyer makes a lower offer at the eleventh hour to force the seller to cut a property’s price.

In November, 39pc of properties sold by the house buying company Quick Move Now were subject to gazundering, up from 13pc in October and at a level not seen since 2008.

In December, traditionally a quiet month for the property market, gazundering affected a quarter of sales.

Those who gazunder are taking advantage of a weak property market, by gambling that the seller is so far into the process that they will have no choice but to accept. The gambit is often made just before exchanging contracts to force the hand of the vendor.

Danny Luke, of Quick Move Now, says: “Anecdotally, we have not seen gazundering volumes like this since 2008. Some buyers lower their offers last-minute because they have a change in financial circumstances or their mortgage company won’t lend them as much as planned; others simply want to take advantage of their strong position in the current market.”

Gazundering is a controversial practice and buyers who do it can cause a property sale – and even an entire chain of sales – to collapse. While the majority of Quick Move Now’s sales that experienced gazundering last month were successfully re-negotiated at a lower selling price, 17pc were rejected and the sale fell through.

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In John and Francine’s case, and very unusually, gazumping actually happened after a buyer had exchanged – but before completion – on their much-loved home of 47 years in Thames Ditton, Surrey.

The couple, who are in their 80s and preferred not to give their last name, were selling up to move to a smaller, new-build home closer to their daughter in East Sussex.

They accepted an offer and exchanged contracts at the beginning of August, with a completion date set of Oct 31, which is when they in turn were due to complete on the purchase of their new home, in the Hillbury Fields development in Ticehurst.

However, on the morning of moving day, as the trucks with their belongings were on the M25, the buyer lowered his offer substantially. This breached the contract and meant the buyer would incur financial penalties – and also meant John and Francine wouldn’t have the funds for their onward purchase.

“Then followed frantic calls to the removal company to pull over and have a coffee while we worked out what to do,” says John, a retired lawyer. “Thank goodness we could stay with our daughter and son-in-law.

The couple’s daughter contacted friends and family who offered to lend money to help them make up the difference created by the gazundering and complete on their new home. “We transferred our savings and everyone’s money arrived in the nick of time,” John says. “Even our grandsons sent us several thousand pounds, which all helped, though it was nail-biting.”

John and Francine didn’t respond to the buyer’s new offer and he ended up completing four days later with the full agreed amount. “We did at that point enjoy a bottle of champagne,” John says.

While gazundering is still relatively rare, increasing numbers of buyers are betting they can get a bargain by looking at properties beyond their budget. In 2023, Hamptons estate agency found that 13.9pc of viewings were of homes that were above what the purchaser could afford, up from 9.4pc in 2021.

David Fell, of Hamptons, says: “These viewings are most likely to take place across the south of the country, where loans tend to be higher relative to incomes and house prices have come under most downward pressure from higher mortgage rates.”

There are certainly some good deals to be had. Will Watson, of property finders The Buying Solution, helped two clients buy properties in December at discounts of 10pc to 15pc compared with similar homes sold a year earlier. Meanwhile, Nigel Bishop, of the buying agency Recoco Property Search, found his client a property in Cornwall which was on the market for £2.1m but they managed to get the seller to accept a price of £1.85m.

As well as bargaining on price, buyers are negotiating very hard from the outset on other factors. The buyer of a house being sold recently by Josephine Ashby, of John Bray Estates in north Cornwall, was “incredibly demanding”, and asked for “a huge amount of extras to be included in the sale, from furniture right down to the family’s Hunter wellies”.

She added: “The sellers were exasperated, but it made sense to take a deep breath and see the sale through.”

There has also been an increase in renegotiations after an offer has been agreed, according to estate agents. Arlington Residential, a north-west London estate agency, found that the buyers of almost one in 10 homes it sold in 2023 sought to renegotiate the price during the buying process, double the proportion seen three years earlier.

Mark Crampton, who covers the southern home counties for the buying agency Middleton Advisors, says renegotiations are often for good reason – such as when a survey has flagged up expensive defects, or where there are legal or title problems. “Historically these issues would have been ‘taken on the chin’,” Mr Crampton explains.

“However, for the first time in around a decade, we are seeing buyers have the confidence either to reduce their offer or walk away from a deal if the seller doesn’t agree to a well-justified reduction.”

As mortgage rates fall, the outlook is brightening for anyone wanting to sell their home this year.

However, while well-presented properties in sought-after locations are getting interest from buyers, those with any sort of issue or which need extensive renovation works will take longer to sell and are more likely to experience gazundering.

Caspar Harvard Walls, of Black Brick buying agency, says: “Where properties are compromised there is much greater scope for buyers to try to renegotiate the price at the last moment.”

There are ways to reduce the chances of sales falling through. Most important is setting a reasonable price from the outset; the property website Rightmove predicts that new seller asking prices will drop nationally by an average of 1pc in 2024.

Tim Bannister, of the firm, says: “Motivated sellers still need to price below their local competition to secure a sale, as buyer affordability remains stretched.”

London estate agency Johns&Co asks buyers to provide a non-refundable deposit after their offer is accepted, as is common in the new-build market, because this provides reassurance for the seller that the buyer is committed.

Owners should also choose their buyer with care, says Charlie Wells, of the buying agency Prime Purchase. “Don’t necessarily opt for the buyer offering the most money,” Mr Wells says.

“I know of two £3m to £4m sales recently where the vendors went with the highest bidder offering the best terms and then the buyer either fell away because they tried to renegotiate too hard or their bid turned out not to be as rosy as it appeared.” In both cases, the sellers ended up going with the lower bidder.

And buyers considering gazundering should think very carefully before doing so. Clare Coode, of Stacks Property Search in Cornwall, says: “The loss of goodwill is so considerable it can end up poisoning the purchase, or sabotaging it altogether. Even if the sale goes ahead, the buyers will be moving into a house without any goodwill – or lightbulbs – and potentially unfriendly neighbours who will have been informed of the bad behaviour.”

Select locations across Britain are seeing pre-pandemic transaction levels

By Ruth Bloomfield

On the face of it, the Royal Borough of Kensington and Chelsea, with its palace, its Michelin star restaurants, and its fabulously expensive real estate, has little in common with the down-to-earth Lancashire town of Clitheroe, where the main attractions include a tiny Norman castle and some outstanding traditional pubs.

But these two locations, just over 200 miles apart, share a key property parallel. They top a new league table of the locations across England and Wales where the number of homes being bought and sold exceeds pre-pandemic levels.

In Kensington & Chelsea transaction levels today are 40pc over 2019 rates, while in Clitheroe, and the wider Ribble Valley, they are up 17pc.

This is important because transaction levels are a key indicator of the health of a housing market, showing where buyer confidence is strong enough (and their pockets deep enough) to commit to sales despite rising interest rates, the cost of living crisis, and fears of future property price drops.

And, the thesis goes, if buyers are active and business is brisk, price rises should follow. Research by Savills highlights the performance of a dozen different locations which are defying a gloomy national picture of price falls and subdued trading.

According to the latest data from the HM Revenue and Customs the number of transactions in the year to March 2023 were down almost 19pc on the previous year.

And the Bank of England reports that the number of mortgage approvals is down 25.5pc in the same period.

The dozen locations include a quartet of affluent, expensive London neighbourhoods beloved of young City workers, aspirational families, and overseas buyers.

Alongside Kensington & Chelsea, London’s top performers are Westminster, Hackney, and Islington. Affluent commuter neighbourhoods – Epsom and Ewell, in Surrey, Chichester, West Sussex, and Windsor and Maidenhead, Berkshire – also rank highly.

But the south east does not have things all its own way. Alongside the Ribble Valley and neighbouring Burnley, there has been strong transaction growth in West Lancashire, with its good-looking villages and appeal to commuters from Liverpool and Manchester, and Salford, Greater Manchester.

But of the UK’s coastal locations, which saw phenomenal demand and price growth during the height of the pandemic, only Northumberland has managed to sustain transaction levels to a level exceeding 2019.

 

Last spring Guy and Harry Dixon-Smith moved into their first home, a three-bedroom flat in Hackney Wick. The brothers were given a leg up onto the property ladder by their sympathetic parents, who understood that high (and rising) rents in the capital meant it was impossible for the pair to save for a deposit.

Their apartment cost £600,000, and mortgage repayments come in at £1,200pcm. But even when service charge is added Guy, 28, an estate agent who works in Savills’ Hackney Wick office, and Harry, 27, who works for a start-up, are still laying out less on accommodation than the £800pcm each were paying to rent rooms in shared flats.

Guy suspects that the reason Hackney – and neighbouring Islington – are trading so well is partly because they have become vibrant, hip destinations that appeal to buyers just like him. “They have got amazing restaurants, music and culture, and that is a draw to people,” he says.

And their relatively high buying costs – the average Hackney home costs £630,000 according to the latest UK House Price Index while Islington’s average price is £689,000 – are not a deterrent to the kind of buyer Guy currently deals with most frequently.

“Against the headwinds that we are seeing, the most prominent buyer is the cash buyer, and buyers less reliant on debt,” he says.

“There is a lot of bank of mum and dad going on. They see that they can bypass mortgage price hikes, and with rents getting higher and higher they are being pushed towards buying.

“It is definitely not the mass market which is buying at the moment.”

In prime central London, Caspar Harvard-Walls, a partner at Black Brick, is not jubilant about the strong performance of Kensington and Chelsea and Westminster, pointing out it must be put into context.

“In early 2019 we had Theresa May as prime minister, we were going through the agony of Brexit, and there was the worry of Jeremy Corbyn becoming prime minister,” he says.

“Confidence was very, very low, and transactions were low. Comparing now to then is a comparison to a real low point.”

This does not mean there are no reasons to be cheerful about the current scenario in prime central London.

“Overseas buyers have certainly been returning to London,” says Harvard-Walls.

“They are not worried about interest rates, it is all about confidence, and they are also benefiting from the weak pound. A lot of domestic buyers in these areas work in the financial markets and have done really well in the last couple of years so they also have money to spend.”

Add to this a renewed interest in buying flats, which were out of favour during the pandemic, and Harvard-Walls feels that prime central London is now “back to normal” after a difficult four years.

Few overseas buyers and high rolling City workers venture as far north as Northumberland.

Its strong showing is based more on British lifestyle movers attracted by the glorious scenery of its national park, its ruggedly beautiful countryside, and a strong sense of nostalgia.

Demand from foreign buyers surges in wake of mini-Budget and falling house prices

By Rachel Mortimer

Wealthy foreign buyers are snapping up London’s most expensive homes in cash, tempted by a cooling property market and weak pound.

Half of the homes sold in “prime” central London in January were bought without a mortgage, up from 42% in the same month in 2022 and 38% in January 2021, according to analysis by estate agency Hamptons.

Demand from international buyers, especially those with currencies pegged to the US dollar, surged in the wake of the mini-Budget last year as the pound dropped to a record low and they pounced on huge discounts.

The pound has since recovered to the level seen in August last year, but buyers who exchanged funds during the market dip are now reaping the rewards.

Victoria Allner, of BNP Paribas Real Estate, said foreign cash buyers were effectively securing a “double discount” on London homes.

Ms Allner said that some people were buying in cash and then taking mortgages out later.

She said: “International buyers, particularly those who are dollar-pegged from the US, Middle East and Asia have been looking to actively take advantage of the devalued sterling since the mini-budget.

“Their strategy is to buy now but leverage later – making the most of the slight decline in property values and the discount given by current currency levels, while not subjecting themselves to mortgage rates until they become more attractive.”

Ms Allner said one super wealthy client from the Middle East had exchanged their currency last year when the pound plummeted and now had a budget 25% bigger ready to spend on property.

She added: “It’s effectively in line with the discount between the pound and the dollar at the low of September.”

Buying agent Black Brick reported the share of cash buyers had more than doubled as borrowing costs rose throughout last year. Half of its clients now pay in cash, up from an average of 20% in previous years.

Cash buyers are favoured by sellers because they offer a quick and simple sale, unlike mortgage borrowers who must contend with an often arbitrary lending process. Their appeal is no different in prime markets.

Camilla Dell, of Black Brick, said: “Many vendors will place significant value on securing a cash buyer for their property, particularly in a market currently riven with down-valuations and fall throughs.

“They may even accept a lower offer for their property if the buyer is able to pay in cash. It is a buyers’ market at the moment and being a cash buyer means that you have a better chance of getting a better price agreed.”

Business from across the pond, she added, was booming. Almost a third of the company’s transactions in 2022 were with US buyers, more than double the 12.5% recorded in 2021.

Ms Dell said: “There’s an investment case for US dollar buyers to be eyeing the market right now.

“Prime central London property values are down 18pc since the peak in 2014, combined with the currency effect, dollar buyers are now getting a 42% discount compared to then, all making it very appealing.”

 

By Alexa Phillips

House hunters now hold more power – here are the tactics to use

 

Savvy property hunters may now be able to secure steep discounts on their purchases as chains break down and rising mortgage rates hit prices.

Demand from buyers has dropped by a fifth in the last two weeks, according to the property website Zoopla, creating a buyer’s market in many areas.

House prices could already be falling due to spiralling mortgage rates, but lags in collecting the data mean the impact cannot be seen yet. A slump of 10pc is expected over the next two years, according to estate agent Knight Frank.

Jonathan Hopper, of buying agents Garrington Property Finders, said Britain is moving from a seller’s market to a buyer’s market.

“A couple of months ago, asking for a double-digit discount wouldn’t have happened anywhere in the UK; you’d get laughed at,” he said. “Now we’re in a market where sellers are open to those sorts of discussions because there is far more flexibility and a pragmatic approach starting to emerge in the market.”

 

How to grab a bargain

 

Mr Hopper said prospective homeowners can improve their chances of snagging a better deal by showing sellers they are a reliable choice.

“There’s a lot of uncertainty about people who’ve had mortgage deals pulled or haven’t re-checked their finances and don’t know if they can still afford what they thought they can afford,” he said.

“If you can demonstrate that you’re organised and a strong purchaser, preferably who’s willing to offer a degree of flexibility – because there’s a lot of sellers whose plans have been shaken – that’s very valuable and very attractive to sellers at the moment.”

He recommended that buyers have up-to-date information from their lenders and are not relying on a months-old “agreement in principle”, a precursor in the application process which gives a buyer an idea of how much they can borrow.

Banks have been withdrawing some agreements over concerns that borrowers can no longer afford the same mortgage size due to rising rates.

Mr Hopper advised against being overly aggressive on price at the outset of negotiations, which can alienate sellers. He said buyers should first take time to listen to what a seller’s motivations are. “For some it may be price, but for others it may well be timescales or flexibility,” he said.

He said buyers can then make a structured offer, preferably in writing, which outlines why they are the best solution for that seller, with supporting evidence.

One of his clients secured 9pc off the asking price of a property on Friday by offering them certainty that the deal would go through. “We were deemed the strongest bidder rather than the highest bidder,” he said. The buyer had a large deposit, evidence of proof of funds and an agreement in principle that was only three days old.

He said the seller was then able to negotiate a discount on their own purchase by showing that the chain was unlikely to collapse.

“A couple of months ago, greed would have trumped insecurity, but we’re now in a market where certainty of one’s position is more important than trying to squeeze the last pound out of something,” he said.

 

‘Wait and see’

 

Henry Pryor, another buying agent, agreed that aspiring homeowners could gain an advantage by pitching themselves as a reliable option. “But don’t rush, wait for the other side to come to you,” he said. “The balance of power is swinging very much in favour of buyers away from sellers.”

He advised against making a property purchase right now, calling it a “huge financial gamble”. He said: “You can buy a house today, but it will be cheaper tomorrow and even cheaper next year.”

He also advised against being fooled by price reductions on listings websites, which have increased in recent weeks. “The asking price is not a statement of value,” he said. “It’s like the handkerchief that a magician uses in a conjuring trick. Just because someone was asking for a pound doesn’t mean it was worth a pound.”

The difficulty for buyers is in knowing what properties are worth due to the changing nature of the market, he added.

Casper Harvard-Walls, of buying agency Black Brick, said some estate agents are deliberately choosing high asking prices knowing they will be negotiated down. Others are opting for lower asking prices to attract more offers, but may expect higher bids.

He recommended that buyers keep a close eye on sale prices in the area they want to buy in. “They can then compare what sold previously to what they’re being offered by the agent to build a picture and tailor their offer,” he said. He said this is a much smarter strategy than just making offers that are 10pc below the asking price.

By Melissa Lawford

Dollar buyers cash in big savings as pound plunges

A plunge in the pound this year has brought a rush of American buyers hoping to snap up prime London homes with tens of millions in dollar discounts.

Demand from wealthy overseas buyers spiked following Chancellor Kwasi Kwarteng’s “mini-Budget”, which caused the value of the pound to tumble to a record low after it sparked fears of even higher inflation.

Sterling has since recovered to the level seen earlier in September, but it is still down by a fifth compared to its high in May last year.

Thea Carroll, a London buying agent, said: “The dollar buyer situation at the moment is a bit overwhelming. In the last three weeks it has hit a crescendo. [After the mini-Budget], the general consensus was that the opportunity cost of missing the currency exchange was greater than the future economic headwinds.”

Ollie Marshall, of buying agency Prime Purchase, noted a London house that was marketed new with a £55m guide price in 2016. When the pound was at its peak against the dollar in June 2016, just before the Brexit referendum, this was equivalent to $81m.

Since 2016, PCL house prices have fallen. The property has also lost its new build premium. Now, it is on the market for £35m.

When the pound hit a record low against the dollar on the Monday after the mini-Budget, with an exchange rate at 1.035, for an American buyer, this property cost $36m.

This was a saving of around $45m compared to five years ago – a drop of 56pc.

 

The Pounds Plunge Means Dollar Buyers Make Big Savings.

“Within 24 hours, my client was viewing the house, having flown 5,000 miles to see it,” Mr Marshall said.

Even if the sterling price of the property had not changed, a dollar buyer would have saved $24m compared to if they had bought at the 2016 peak.

The pound has since stabilised a little. Last week, the house’s dollar value was $40m.

Roarie Scarisbrick, of Property Vision, a buying agency, said: “Obviously there has been a pick up. Whenever there is a suppressed pound, the phone starts ringing. There are definitely a lot of people thinking this is deal time.”

He added: “In areas like Mayfair, Belgravia and Knightsbridge, the international-type properties that have been sat around for the last two years are now being hoovered up because of the currency rates.”

The British economic outlook might be turbulent, but London still looks favourable to some overseas buyers, Ms Carroll said. “The flight of Russians to Dubai means prices have become extortionate there.”

Camilla Dell, of London buying agency Black Brick, said: “The currency exchange rate has definitely helped. We can say to our clients that their stamp duty bill is effectively paid, compared to if they were buying this time last year.”

International buyer numbers plunged in the wake of the pandemic. At the start of 2020, overseas buyers accounted for 49pc of all sales in prime central London, according to Hamptons estate agents.

That share hit a low of 35pc in 2021, but then bounced back this year. In the first six months of 2022, the international buyer share in PCL was 48pc.

“Last year, 80pc of our clients were domestic. They were looking for family homes in the suburbs. Now that has been flipped on its head and at least half of our buyers are internationals looking in central London,” Ms Dell said.

“It’s Americans, buyers from the Middle-East, and from Africa – people who have made their money in oil and gas, in industries pegged to the US dollar, which are benefiting from the current crisis,” she added.

Yet the jet-set is not necessarily rushing to sign transaction contracts – they are circling.

“People are stockpiling sterling, getting ready to deploy when they have more clarity on the market,” Mr Scarisbrick said.

Ms Carroll said: “I am telling my clients to change their money now and acquire when the market is right.”

She noted buyers with budgets of £14.8m and £7m who exchanged their dollars into sterling.

Wealthy internationals are less dependent on the mortgage market, meaning buyer demand will be a little more shielded from the blow of rising interest rates.

“Prime central London markets tend to be underleveraged and much of the borrowing tends to be more related to tax and structuring,” Mr Marshall said.

But Mr Scarisbrick cautioned that the sector would not be immune to the turmoil of the past week and expectations for big rises in rates.

“They have a great win on the currency, but these people still need to borrow, it is not a pristine moment,” Mr Scarisbrick said.

House prices are on the turn and older homeowners are taking advantage

By Ruth Bloomfield.

Clive and Gina Collins are a practical sort of couple. Barely had their youngest daughter left home before they began to consider what to do with the family house they had lived in for 26 years. Last summer, after a pandemic spent ruthlessly decluttering, their decision was made. They sold the 1920s house and moved into a brand new apartment.

Their timing has been impeccable. A perfect storm of factors – household bills rocketing, interest rates rising and warnings that house price growth will start to taper off – means that there has rarely been a better time to downsize.

As mortgage rates rise, the market could now be peaking. Buying agent Camilla Dell of Black Brick, said savvy downsizers were already trying to “cash in before the market takes a turn”.

Lucian Cook, of estate agency Savills, agreed that the market appeared to be at a turning point.

“But we have just had a strong burst of house price growth, the first for several years, and that means the gains made on an existing home will far outweigh the increased costs of buying a smaller property, even with stamp duty,” he said. “And as we go into winter, the cost of running and heating a larger home will start to become a greater issue.”

‘I would have been spending £1k a month on bills’

The Collinses, both 62, had raised their two daughters in a five-bedroom house in Bushey, Hertfordshire. With its large garden it was a great home for children, but Mr Collins was keenly aware how much it cost to maintain.

“With gas and electricity going through the roof I would probably have been spending £800 to £1,000 a month on bills if we had stayed,” he said. “It also cost a lot to pay gardeners and cleaners.”

New research from estate agent ­Purplebricks suggested that many other homeowners were making similar calculations. More than half of all house hunters would be willing to downsize if it would cut their bills, it found. Of those in the process of downsizing, 60pc were doing so specifically to reduce ­household costs.

Tom Greenacre, of Purplebricks, said: “People’s concerns over increasing energy bills are now translating into real action. Some are taking the significant step of downsizing their home and are moving somewhere smaller to save on household bills, a reversal of the ‘race for space’ we saw at the start of the pandemic.”

The Collinses sold their family house for £1.255m. Their apartment, at Squires Park, Bushey, which they share with their dog, Teddy, cost £860,000. They spent some of the equity they released on furnishing their new home and put the rest into a pension.

Over the past year, while most of the country despairs at rising bills, the couple have seen their living costs drop. Their power bills are down from £450 a month in their old home to around £250 a month.

Beyond releasing equity by buying a more modest home, the day-to-day savings of downsizing can be significant. A study by the AimC4 project suggested that domestic gas and electricity costs were around £15 per sq m per year. Bills have gone up dramatically since the research was done, so these costs are now likely to be closer to £25 per sq m. So moving from a 140 sq m (1,500 sq ft) house to a 65 sq m (700 sq ft) flat should save almost £2,000 a year in bills.

Moving to a more walkable area can also pay, because driving currently costs around 40p a mile, according to the car insurer Nimblefins. Driving five miles to a nearby town three times a week would, on this basis, cost more than £600 a year. And buying a less expensive home will often cut your council tax bills too, although local costs are something of a lottery.

‘It was a big house with a big garden to look after’

Alison and Douglas Gibb’s motives for downsizing were more about meeting their future needs than cutting current living costs. The couple met at art school and bought their six-bedroom house in Gullane, 18 miles east of Edinburgh, in the early 2000s for £316,000.

Although the couple, who have two children in their 20s, have made contributions to a pension over the years, they were painfully aware that they had not put enough aside to live on in retirement. “We had put more into the house,” said Mrs Gibb, 56. “So we always knew that when we stopped working we would need to sell it and downsize.”

But during the pandemic Mr Gibb, 58, who had earned the family nickname of “the janitor” because of all the work he did on the house and garden, started to feel that those plans should be brought forward. “He started to say that life was too short,” said his wife.

“It was a big house with a big garden to look after and he just wanted to free himself to work less and live more.”

In September 2020, they sold the house for £725,000 and later bought a four-bedroom house near ­Berwick-upon-Tweed for £325,000. Their new home is not only smaller than their old one but more energy efficient. As a result, despite rising fuel costs, their energy bills have dropped from £193 a month to £150.

As the couple are self-employed – Mr Gibb is a photographer and his wife a journalist – they needed the capital they had freed up by downsizing to provide them with a long-term income.

“We are not into spreadsheets and yields, so we really agonised about what to do with the money,” said Mrs Gibb. Eventually they decided to invest in property and bought a pair of flats in Edinburgh to rent out.

The Collinses and the Gibbs opted to downsize in their 50s and 60s, and, according to research from Savills, these younger age groups are now far more willing to relinquish their family home than older generations.

Owners in their 50s, for example, own around 22pc of Britain’s property stock and are responsible for 21pc of all sales. Those in their 60s hold 19pc of property stock and make 13pc of moves. But those in their 70s and above, despite owning almost a quarter of all properties, account for only 8pc of house moves.

‘It is something we just had to get on with’

Not long ago Linda and Christian Pegley thought they would live in their family home for ever. They had moved to their three-bedroom cottage on the eastern fringes of Dartmoor in 1983, paying £18,000 for the property. In 2001 the neighbouring cottage came up for sale and they bought it for £78,000. They amalgamated the two properties into a six-bedroom home for them and their two sons, who are now grown up.

Mr Pegley, 74, retired six years ago and devoted himself to the house and its two acres of garden. But after Mr Pegley, who has Parkinson’s, had a couple of bad falls in the sloping garden, they decided to move to a more practical, less remote home. They sold their Dartmoor house for £630,000 and paid £525,000 for a three-bedroom bungalow at the Little Cotton Farm development near Dartmouth.

The couple have invested the bulk of the capital they released in their new home, building a glass-topped veranda, from which they can see the sea, and landscaping the garden.

Today, Mr Pegley said he had mixed feelings about the move. Having neighbours nearby has taken some getting used to after almost 40 years of perfect solitude. On the other hand, their household bills are lower, as are their transport costs, since Dartmouth is nearby. More importantly, their new, flat garden is a lot easier to cope with, and having people living nearby means help is at hand should the couple need it.

“It is something we just had to get on with,” said Mr Pegley.

By Liz Rowlinson

City living has suffered during the pandemic, but some village-like pockets have thrived

In the past year, many of us who live in towns or cities have been forced to embrace a more local way of life. Working from home, we’ve become regulars at our local coffee shops, or at neighbourhood businesses we rarely used before, patronising those on our doorstep instead of rushing off to the office for a Pret al desko.

This idea of communities that offer everything we need within a quarter of an hour’s walk, without getting in a car – the so-called “15-minute city” – is the dream of many town planners. It has been created anew in the community of Poundbury in Dorset, championed by the Prince of Wales, and is being sketched out in Fawley Waterside, a project it inspired on the site of a former power station in Southampton.

Prince Charles embraced the term “urban village” 20 years ago, yet there are dozens of vibrant villages within cities that have evolved organically. Many have become highly desirable places to live, even before the pandemic accentuated the appeal of “staying local”.

Properties in such areas can cost nearly double the average house price of their city, according to data from estate agency Savills. While the current property boom has been characterised by buyers fleeing urban life for more rural or suburban areas, small pockets of cities are holding their own.

Frances Clacy, of Savills, said: “Rather than turn their backs on the ambience and amenities of the city altogether, there are signs that some buyers want the best of both worlds.” Here, we find some of the best 15-minute cities.

Manchester

Just four miles south of the city centre is Didsbury, an area that is big enough to offer more than the one village. While East Didsbury is the most affordable option, there is also Didsbury Village and West Didsbury. In the latter, the average house price is £336,494, according to Savills.

Helen Tabor and her family have lived in the area for 12 years. “West Didsbury is more bohemian, with many independent shops on Burton Road, while the Village is more family-orientated,” she said.

With three parks, good schools, sports clubs and the famous “Didsbury Dozen” pubs, there is enough on the village’s doorstep to make the 40-minute peak-time drive into the centre of Manchester a rare event. “During lockdown, sitting outside the café in Fletcher Moss Park along the river has helped us keep our sanity,” said Mrs Tabor, 50.

There are plenty of late Victorian homes to choose from, with two-bedroom flats for sale from around £400,000, three-bedroom semis at £550,000 and new detached six-bedroom houses up to £2.45m. These prices are far higher than comparable suburbs around Manchester.

Sheffield

West of Sheffield city centre are the villages of Dore and Totley. Here, buyers pay a hefty premium to live in this ancient rural enclave on the edge of the Peak District that is popular with families for the Ofsted “Outstanding” rated schools (local resident and Olympic athlete Jessica Ennis-Hill is an alumna of King Ecgbert secondary).

Dore and Totley have all the amenities necessary to make sure you rarely have to leave: pubs, Indian restaurants, the all-important fish and chip shop, a hairdresser and a car mechanic. A train from Dore and Totley Station is only six minutes into Sheffield.

Katrina Wooltorton rents in Dore with her boyfriend, Jon, who has recently graduated from university. “Within five minutes, you are into Ecclesall Woods, or it’s only 10 to the village of Hathersage, sitting in the beautiful Hope Valley in the Peak District,” said Ms Wooltorton, 23. “We love the community feel of Dore.”

However, it’s not great for first-time buyers. “When we buy our first home, it will need to be in a more affordable area – such as the village of Dronfield – before we hope to move back again.”

To buy a small detached house, you’ll need £450,000, according to James Ross, of agent Eadon Lockwood & Riddle. “We are seeing a lot more buyers from down south. The market for three-bedroom houses at £350,000 to £500,000 is really strong, but you can pay up to £2m.”

Bristol

In northern Bristol, separated from fashionable Clifton by the thoroughfare of Whiteladies Road, is Redland, another popular village within a city. Chandos Road is cherished for its restaurant scene, although the Michelin-starred Wilks has shut permanently because of the pandemic.

Good local schools will continue to draw families, said Francine Watson, of estate agent Knight Frank. “You get more for your money, plus bigger gardens and more off-street parking in Redland than in Clifton,” she said. Family homes cost £600,000 to £1.4m.

London

The capital is fringed with urban villages that have recorded some of the highest levels of activity within the city during the pandemic. Camilla Dell of Black Brick, a buying agency, said: “Buyers that might have bought in central London have been looking at Richmond-upon-Thames, Kew, Wimbledon, Chiswick, Hampstead, East Sheen and Dulwich. Access to parks has become more crucial.”

Dulwich, in south-east London, has been especially popular since the pandemic started, although the area has always been in demand, with house prices steadily growing.

The average property value in the area grew 1,150pc between 1995 and 2017, which was the highest in the UK, according to Knight Frank.

The area has an abundance of parks, and while the hub of Dulwich Village has Gail’s Bakery and the Crown and Greyhound pub, there are more shops and restaurants along Lordship Lane in nearby East Dulwich.

A good choice of independent schools is another draw, but state options such as the Charter School North Dulwich and Dulwich Hamlet Junior School are also pulling buyers from outside the area, said Christoper Burton, of Knight Frank. “The family house market in Dulwich Village is around £1.4m, but you get more value for money in East Dulwich, where there are plenty of smaller Victorian terraces from £700,000.”

Further west, sandwiched between the River Thames and the green spaces of Sheen Common and Richmond Park, is East Sheen. It has everything you may need: a Waitrose, a library, cafés such as Valentina Italian Deli and great schools, which is just as well as this area of west London is not very well connected.

Demand for East Sheen Primary and Sheen Mount Primary keeps property prices up, and values are higher “Parkside” – close to Richmond Park, said Michael Randall, of Savills.

“You’ll pay over £1.2m for a four-bedroom family house in the school catchment areas, or £1.7m to £2.5m for one of the bigger Edwardian houses near Richmond Park,” he said.

“But people love this area as you tend to get bigger gardens and more lateral space than in nearby Barnes or Richmond. Buyers coming out of central London like the slightly slower pace of life.” And it looks like they will pay a premium for it, too.

Will it be a £66m penthouse or a two-bed home on a remote Greek island? Experts predict what the ultra rich will be investing in for 2021

By Zoe Dare Hall

After a tumultuous year, what lies in store for London’s prime property market in 2021? And where will the wealthy be looking to invest? The experts share their knowledge.

London calling

For many City workers no longer needed at their desks, 2020 was about an escape to the country. 2021 will see the reverse, thinks Camilla Dell, managing partner at Black Brick buying agency. “Half of them stayed commutable in the Home Counties. The other half moved to Somerset, which is risky if you are suddenly called back to your desk at 8am tomorrow,” says Dell.

Most didn’t sell up in London, though; they just bought the country house too – which is just as well because in 2021, “the masses will flood back to the city,” Dell adds.

Post-Covid – or, at least, post-vaccine – London will also see the return of overseas buyers. For UK buyers with serious money, their absence currently opens up opportunities in prime central areas such as Mayfair and Belgravia. “Apartment prices in central London’s golden postcodes have fallen by 8.2% in five years and houses are down by 1%. There are no viewings taking place and none of the usual audience is here. But by next summer, it will be more competitive again,” says Dell.

Some foreign buyers will feel compelled to tie up purchases before that, though, as April sees the introduction of an extra 2% stamp duty for non-UK residents. “We currently have two overseas UHNW buyers who are unwilling to travel at the moment. One has a budget of £40m-£60m for a family house, so will save at least £1m if he buys before April,” says Marc Schneiderman, Director at Arlington Residential in St John’s Wood.

Wealthy UK-based buyers are keeping the super-prime market ticking over nicely until foreign buyers can travel again, though. “Despite the vaccine, expect more house moves, upgrades and a continued search for space in 2021,” says Liam Bailey, global head of research at Knight Frank. “London is seeing a surge in demand for larger houses. The £10m+ market is very strong and this strength will continue into 2021.”

End-user buyers will be looking for areas with easy access for weekend escape – given many have invested in holiday homes in England instead of abroad this year. That trend is already in evidence Television Centre in White City, where a number of owners flee to their Cotswolds homes every Friday. Flats in the latest Architects Series cost from £3.4m through Savills.

East London is also “one to watch”, says Camilla Dell – and handy for a weekend home on the Suffolk coast. “People who wanted to live in leafy parts of north London – especially those working in the media or tech – now prefer to be East,” says Dells. Long & Waterson in Shoreditch – with apartments from £715,000-£2.16m through Savills – is just the kind of new development they’ll like, she thinks.

Ultra-prime London launches

London has its fair share of landmark schemes launching, or completing, in 2021 – and views over Hyde Park are a common theme.

Mayfair Park Residences sees the world’s first Dorchester Collection homes, with Clivedale’s scheme of 25 apartments and townhouses on Park Lane – priced from £4.25m – overlooking Hyde Park. They have access to the adjacent Dorchester hotel’s services, whether it’s 2am mojitos delivered to your door, use of the 10,000 sq ft health club, or dinner at Wolfgang Puck’s first European restaurant, CUT.

On the park’s Bayswater side, Fenton Whelon’s Park Modern sees 57 new one-to-six bedroom residences overlooking the park and Kensington Palace Gardens. Prices start at £1.95m through Knight Frank.

And in late Spring, expect completion of the £66m penthouse at The Bryanston, Almacantar’s new super-prime parkside scheme in Marble Arch. Other apartments in the high-rise designed by Rafael Viñoly start at £2.6m.

Among the historic landmarks undergoing transformation is The OWO, formerly known as The Old War Office, which will be home to London’s first Raffles hotel and 85 Raffles-branded residences. No prices have been released yet, but with its historical pedigree, prime St James’s location and kudos of being Raffles’ first ever branded scheme, these will be properties to watch.

The Herculean task of reinventing Battersea Power Station reaches a pivotal point in Spring 2021, as it’s when the first residents will move into the reinvented Grade II* listed Power Station. The development also sees the opening of the new Northern Line tube station in Autumn.

Brand new but inspired by the Georgian proportions of Thomas Cubbit’s historic Belgravia homes that surround it, Qatari Diar’s Chelsea Barracks launches its townhouse collection, with the six-storey properties priced from £38m. Each house features a swimming pool that runs under the entire length of the garden, and some have their own mews house.

Alpine hotspots

In early 2020, ski resorts were considered Ground Zero for Covid in Europe, but in 2021 they will be among the hottest places to invest. What we buy – and how we use it – is changing, though.

While old-style après-ski is out of the question because of the virus, buyers want to bring the party back home, so large private chalets are in hot demand, “especially those with five-star entertaining areas and wellness facilities,” says Giles Gale, founding director at Alpine Property Finders. With the catered chalet model also largely impossible, and the communal aspect of hotels out of favour, in-chalet/apartment hotel services are on the rise, says Gale. He suggests Manali Lodge in Courchevel 1650, a new luxury apart-hotel residence, where three-bed apartments cost from €2.02m.

Ski properties aren’t just for Christmas any more, either. Month-long or even entire-season stays will become more popular next year, with work-from-home culture rife among wealthy digital nomads on the slopes, says Jeremy Rollason, head of Savills Ski. Many will seek a large, lateral rental apartment first, so they can try before they buy.

Buyers shouldn’t expect many bargains in the leading resorts, though. “Covid has increased our appreciation for the natural environment and prices in the top 10 resorts have increased by an average of 7.2% this year, despite the pandemic,” says Rollason. Courchevel 1850 tops the prime price league at €25,000/m2 – making it 60% more expensive than prime Paris.

For price growth and new development opportunities, Knight Frank tip the French Alpine resort of Saint-Martin-de-Belleville in 2021, overtaking last year’s winner, Val d’Isere. The small Swiss resorts of Grimentz and Champery will also be in demand, says Knight Frank’s head of Swiss Alpine sales, Alex Koch de Gooreynd. “International buyers are looking at Switzerland as a permanent base because of its handling of the crisis and the lifestyle it offers. The appeal of owning a Swiss property is now strengthening too with interest rates negative and Swiss banks effectively charging clients to store their capital,” he says.

Hotspots for sun, sand and sea lovers

Marbella is ensuring it looms large on the super-rich radar in 2021 with the launch of Epic Marbella, Fendi Casa’s first ever European scheme of branded residences. The 56 apartments of up to 1,000m2, plus 400m2 terraces with private pools, cost from €2.5m-€7.5m and sit on a prime seaview spot on the Golden Mile, near Puerto Banus. There are Fendi touches throughout, from logoed wardrobe handles to rugs, and the five-star amenities include the biggest swimming pool in a European residential development, according to developer Carlos Rodriguez of Sierra Blanca Estates.

Barbados has also sealed its place in the spotlight in the coming year as the 2020 launch of its Barbados Welcome Stamp – a 12-month work visa, costing $2,000 per person and aimed at digital nomads – has proved a big PR coup for the island. So far, three quarters of international relocators are first-time visitors to the Caribbean island and aged under 45, according to Terra Caribbean.

For those seduced into buying, Apes Hill, under new ownership, re-opens in November after a £24m upgrade. It promises to be “the best golfing experience in the Caribbean” and include a new club house, a fitness and paddle sports centre, farm shop and three/four bed villas from £1.15m.

Greece is also garnering a reputation as a UHNW hotspot with such five-star branded schemes as Amanzoe – where two-bed villas cost from €3.2m and – launching in 2021, by the same developers, Dolphin Capital, in partnership with Kerzner International – the One&Only Resort on Kea Island, with turnkey two-bed homes from €3m. The Kilada Country Club, near Amazone in Porto Heli, is another Dolphin Capital resort on its way, with 260 golf residences set around a Jack Nicklaus course.

Greece also offers the most affordable Golden Visa programme in Europe – newly-relevant to British investors as we wave goodbye to the EU.

By Melissa Lawford

Premiership players with budgets of £15,000 per month are finding it difficult to rent in the footballer zone south-west of London

Footballers in the Home Counties are having to move into hotels ahead of the new season as the supply of high-end rental homes has dried up.

Alex McLean, head of the sports team at Knight Frank’s relocation services business, said that a lack of pricey properties to rent along the A3 corridor out of south-west London means “a lot of players are ending up in hotels”.

Accommodation budgets of Premiership players, who often opt to rent, especially at the start of their club contracts, often exceed £15,000 a month, said Mr McLean. But the pandemic has shrunk local supply in their favoured towns, which include Oxshott, Esher and Cobham in Surrey.

This means that newly-signed players, such as Thiago Silva and Ben Chilwell who are moving to Chelsea, may find it difficult to rent a property near the club’s training ground in Cobham.

James Dodds of Grosvenor Billinghurst, a Surrey estate agent, said: “I can’t remember a time when there was this much movement in the super high-end rental market.” Footballers in these areas also have to compete with wealthy workers at nearby tech firms.

The post-lockdown property “mini-boom”, driven by Chancellor Rishi Sunak’s stamp duty holiday and a shift to working from home, means that many high-end homeowners are taking the opportunity to sell their homes now while prices are high, and renting until prices fall when the impact of the recession bites. The sales market had been sluggish for several years before the pandemic.

In the three months to August, the number of homes worth more than £5m for sale outside central London doubled compared to the same period in 2019, according to Knight Frank.

Meanwhile, between April and August in the south-west corridor, which includes areas such as Ascot and Cobham, the number of high-end rental properties coming to the market fell by 20pc compared to the same period in 2019. For homes renting for more than £15,000 per month, the number fell by 55pc. 

The footballer zone along the A3 is an anomaly: across London and the Home Counties, over the same period, the number of overall rental listings jumped by 28pc year-on-year. 

Within the capital, the contrast is even more stark. Camilla Dell, of Black Brick, a buying agency, said landlords who have recently renewed tenancy agreements in London have had to accept 10pc and 20pc rent reductions. “Flats without outside space are faring the worst,” she added.

There is more demand than usual from footballers to rent big homes in this area, and some are moving there because they want more green space after lockdown. “Chelsea has spent a lot of money on new players, but there are also footballers for the London clubs who have decided to move out this way,” said Mr Dodds.

There is new demand for pricey rental homes in this area from footballers at south London clubs such as Crystal Palace and Millwall as well as Chelsea, Fulham and south coast teams such as Bournemouth and Southampton, said Mr Dodds.

The footballers looking to rent now are late to the trend. When the pandemic started, “there was a snap reaction from some very, very wealthy Londoners to rent a Surrey mansion,” said Mr Dodds. 

“We had a chap where there wasn’t a figure for a budget, we were trying to negotiate him renting a whole hotel and its cottage in the grounds. The deal was going into a couple of hundred thousand pounds a month,” said Mr Dodds.

But while demand for luxury rentals has spiked, supply has dropped. 

By Melissa Lawford

Agents are reporting a sales surge, while analysts are forecasting imminent price falls. Is there a way to make the most of the difference?

The property market is on a rollercoaster: while agents have reported a surge of demand and deals since restrictions were lifted in England, analysts have forecast deep price falls this year.

So is there a way to take advantage of these peaks and troughs?

One way to do that is sell up now, while the market is in a frenzy, then rent while biding time as prices fall – and then snap up a bargain.

This is what Theo Taylor, 71, plans to do. He has lived in Hemel Hampstead, Hertfordshire, for 20 years with his daughter and his wife, who passed away last year. Before coronavirus hit, he was preparing to downsize to Wiltshire with his dog, Pebbles. 

“Now, I’m thinking of selling this year as planned, trousering the cash, renting in Wiltshire and then buying over the next year with the added leverage of being a cash buyer,” he said.

e is about to put his house on the market for £765,000, and intends to move west with a budget of £600,000 to £650,000. He wants to wait until he finds a home that he really wants, and then will be able to move quickly.

But he could benefit from falling house prices, too. “I think prices are going to fall,” said Mr Taylor. “The furlough scheme will end soon, and when it does I think there will be significant redundancies and business closures, and when that happens I think the property market will go down.”

Is now the best time to sell?

Buyers have rushed back into the market in England since the restrictions were lifted. Agreed sales are nearly at pre-lockdown levels and sellers are so optimistic that in May, asking prices were 1.9pc higher than in March, according to property portal Rightmove.

 

David Ruddock, of estate agents Carter Jonas, said that while pent-up demand is driving the recovery, it is not just rooted in lockdown. “It has been building since the middle of last year, long before the pandemic began,” he said. Buyers had been holding off since the June 2016 referendum to see what would happen with Brexit and were just starting to return to the market after the decisive Tory election victory brought more clarity in December. 

There is also a new group of buyers who have become dissatisfied with their homes during lockdown, said Mr Ruddock. 

But the effects of the coming recession have not yet filtered into the market. Nine million people currently have their wages supported by the government and one in seven mortgaged households are currently protected by a mortgage holiday. When these measures end in the autumn, there could be a spike in forced sellers, and a major hit to buying power.

Lenders are certainly expecting the recovery to have a short life expectancy. The building society Nationwide has forecast a 13.8pc drop in house prices and has withdrawn mortgages to buyers with less than a 15pc deposit accordingly.

The current huge level of demand and the pessimistic outlook suggest that now may be the best time to sell for some time. 

How will price falls vary across the market?

These forecasts are largely for the UK as a whole, but there will be major differences in house price changes across the country and at each stage of the property market.

The entry-level section of the market will likely be worst hit, said Mr Ruddock. First-time buyers are most likely to be affected by redundancies. They are also most reliant on the availability of lending, and mortgages for those with small deposits are scarce. The number of agreed sales at the lower end of the market is not recovering at the same rate as those of prime homes.

Meanwhile, values in rural areas are more likely to hold their value. The markets here are less vulnerable to changes that affect buy-to-let investors and overseas buyers, who are currently held back by travel restrictions and face a new stamp duty charge. Affordability here is already better than in the cities, and rural markets will benefit from new demand for homes with outdoor space.

Camilla Dell of Black Brick, a buying agency, said: “A lot of people want to move out of London now that they can work from home.” 

In the capital, “the market has already dropped,” she added. “The deals we had agreed pre-Covid have been renegotiated by about 5pc.” Large-scale new build developments will be particularly vulnerable to further falls.

When will price falls bottom out?

“Playing the market is a risky strategy, as timing the bottom of the market is something nobody can predict,” said Ms Dell. “I think we are looking at a few months.” 

Estate agents Savills and Knight Frank have both forecast that house prices will return to growth in 2021.

The housing market’s recovery will be closely tied to the UK’s economic strength. But the relationship between the two is not necessarily always one of cause and effect. Analysis by Deutsche Bank showed that during the global financial crisis, GDP started to fall in March 2008 and bottomed out in June 2009 – a gap of 15 months. Meanwhile, house price falls started earlier in September 2007 and lasted for a longer period of 18 months. 

In this case, however, GDP has fallen first, with a plunge of 20pc in April; perhaps this time around, an eventual rise in GDP could be a precursor to a house price recovery.

But even if a buyer calls the market right, they could be held up by a lack of available homes, said Ms Dell. When a market is falling, sellers are also less keen to list their properties, meaning that pickings are slim.

“It is a bit like going to the Harrods sale,” said Ms Dell. “Yes, the discounts are bigger, but is there anything you want to buy?”