14 July 2008, Country Life Magazine
By Cheryl Markosky
THE HIGHER END OF THE PROPERTY MARKET IS HOLDING UP, AS DEMAND FOR THE RIGHT HOUSE IN THE RIGHT AREA CONTINUES TO DRIVE PRICES
With the gap between the super-prime and mainstream markets widening, so too is the differential between property types, says a new study.
As the number of property transactions fall, the quality of property becomes ever more crucial. This focus on ‘best in class’ will play a major role over the coming months, with ‘average’ property forced into greater discounts than their higher quality counterparts.
Factors such as location, proximity to noisy roads and the amount of modernisation required will be key negotiating tools for discerning buyers, reports top-end house finder Camilla Dell of Black Brick Property Solutions in its latest news bulletin.
‘The gulf between different types of properties has widened considerably. Period conversions in prime areas are showing impressive resilience despite difficult conditions, whereas prices of new build and off-plan properties in secondary locations are beginning to soften,’ she says.
Mrs Dell points out that prime central London is unlikely to suffer from a ‘crash’ because the majority of owners are affluent and unlikely to become ‘forced sellers’ (those who have to sell due to death, divorce or a change of job).
Nonetheless, even in the most desirable areas vendors will at some point have to lower their short-term expectations as the financial sector and the economy retrench, Mrs Dell believes.
‘For investors with an eye to the future, it is an exciting time to gain a foothold,’ she explains.
The report also suggests fears regarding the ‘non-dom’ situation – where non-Brit High Net Worth Individuals leave UK shores for tax purposes – has turned out not to be as serious as predicted.
With year on year sales of super-prime (greater than £10 million) property rising by 35% in the three months to May, the top-end remains in rude health.
‘Last year, overseas buyers accounted for 79% of our client list, but so far this year our clients have been exclusively international and primarily owner-occupiers.
‘Many are from emerging markets or oil-rich nations and their search for a home in London remains relatively unaffected by the credit crunch or changes to the UK’s tax regime. From our experience, the international influence remains a welcome force in UK property,’ adds Mrs Dell.