22 May 2008, The Wealth Net
Rich international purchasers continue to underpin the London residential property market, according to Black Brick LLP, a specialist search agent that often works with private banks to source property for clients.
Data collated by Black Brick, since its inception in January 2007 provides an interesting perspective of the dynamics of the market in central London, especially since the inception of the credit crunch and concerns about the UK’s new resident non-dom regime.
The average budget of Black Brick’s clients has increased risen from £1,649.870 in 2007, to £5,590,000 in 2008, according to Camilla Dell, Black Brick’s managing director. According to Ms Dell this is a sure sign that the top end of the London property market is still very active, with high net worth individuals, particularly international buyers, not affected or deterred by the economic climate or the new resident non-dom regime. Indeed, so far this year Black Brick has dealt exclusively with the international clients that accounted for just 79 percent of its list in 2007.
The start of 2008 saw owner-occupiers dominating the top end of the market (100% of concluded deals), with no interest from investors. But investors look set to re-enter the market with Black Brick instructed by several investment clients to buy sizeable property portfolios, ranging from £10 million to £15 million in size. Investment clients now constitute around 50 percent of Black Brick’s current list, an increase from the 39 percent during 2007.
“We have been very encouraged by our figures to date,” said Ms Dell. “It demonstrates a clear need for our services and an appetite for London property even in a weakening market, particularly from investors who see it as an opportunity rather than a deterrent.
“The biggest casualty in the property market in 2008 has been the volume of sales transacted – with vendors digging their heels in on price and buyers offering 10 percent to 20 percent below asking price,” she continued.. ”We forecast that this will continue into the latter quarters of 2008. We expect to see a further softening in the market and will continue to make strategic acquisitions for our investment clients on an opportunistic basis.”