DBPR asked prime property experts Simon Barnes, Jamie Hope, Edward Cory-Reid and James Robinson to share views and provide an analysis of the current state of the London prime property market.
Simon Barnes of H. Barnes & Co
“While the mood of uncertainty and expectancy surrounding Brexit and the subsequent impact still looms over us, the reality is that nothing has or will change instantly. In the scheme of things there is no firm reason to sit on the fence, life really does have to move on and peoples’ motivation and need to buy property continues. If ‘you’ve got to do it, you’ve got to do it’ and although there’s no denying that the current market across PCL is tough and we are all needing to draw on our experience and nurture and handhold buyers, there continue to be wealthy buyer looking to extend their property portfolio in Prime Central London.
At the super prime level in the market what really impacts and can halt impulse property acquisition are genuine global economic events, like oil prices plummeting or the Chinese stock markets plunging. Most discerning UHNWI recognise that pitted against the peaks and troughs of the global markets, London remains both a safe haven and a consistent safe bet in which to invest in prime property irrespective of whether it sits inside or outside the European Union.”
Now is the time to be brave and unafraid to look above your budget and then make offers
For those serious buyers wanting and needing to forge ahead with a purchase, they need to be clear and importantly be realistic about what they really want and need. Now is the time to be brave and unafraid to look above your budget and then make offers. The current market dictates a degree of patience and flexibility – be ready to move quickly if required; have all the legal work and finances in place to avoid unnecessary delays, but also be willing to work with the vendor, be flexible on exchange/completion timescales. Do try and wear the buyers hat when you’re selling. In this current difficult market, the key message is for those selling and renting to be realistic in their pricing to reflect the mood and tone of the PCL market irrespective of Brexit, there’s always an element of compromise.”
Jamie Hope of Maskells
“There has been a correction in prices since the peak in late 2014 at around circa 10%. We now see that prices have stabilised and expect to see little change in the next 18-24 months with the return of domestic demand. The key drivers for correction are the reform in SDLT, compounded by Brexit and political uncertainty.
Timing has gone out the window
We are achieving good demand for best in class prime properties and family houses, such as Ladbroke Road attached. We have sold a number of houses in the first 10 days of marketing, but equally, good properties marketed at sensible prices have taken 18 months.
We have just exchanged on a flat where we received no offers for 18 months and then had two buyers who came out of nowhere and we had a contract race, achieving over the asking price. We also had a smashing house in Chelsea at £3.75m – 174 viewings later, we then had three buyers competing and we achieved a price far higher than our clients were hoping for.
Half of our transactions in the last 12 months have involved more than one buyer offering at the time an offer is accepted. Most in demand properties right now are in these prime addresses: Gledhow Gardens, The Marlborough, Ladbroke Road, Harley Gardens, Cadogan Square.”
Edward Corry-Reid of Aylesford International
“I would say we are 40-50% down on transaction volumes against what we would expect to see in any ‘normal’ spring/ early summer market. There have been one or two headline sales, however one has to be careful of conflating the odd ‘big’ sale you may read or hear about, with there being a buzzing market.
Genuine, ‘best in class’ properties will always attract a strong price, as they are by their nature rare and hard to find. These sales will inevitably make headlines and encourage the narrative that Prime Central London prices are defying expectations and pushing ever forwards, but it is the day-to-day market (in PCL between £1m and say £8m) away from the spotlight where the difficulty is found, and this market is extremely tough at the moment.
It is a confluence of factors that together have resulted in the current difficult conditions
The reasons for this are numerous. Of course Brexit plays a considerable part, but I think it would be wrong to attribute a majority of the blame to our leaving the EU. In terms of Brexit, I have found that the impact this has is more related to the uncertainty of the nature and format of our leaving, and lack of clarity regarding our future trading relations following Brexit, that is causing a problem for the market, rather than any sudden reluctance by overseas buyers to invest and spend time in the UK & London.
However, ultimately, I feel there will still be a demand from overseas buyers for good London property. After all, the basic underlying factors that drew them here in the first place – a good judiciary, equality before the law, stable political landscape (relatively!) strong infrastructure and geopolitical location, and world class education and health services, still remain. And don’t forget that the fall in sterling caused by Brexit has meant that London is now an appealing prospect for dollar backed buyers, who are picking up some of the slack. SDLT and tax is, in my view, the bigger problem.”
James Robinson of Lurot Brand
“Today the biggest obstacles to selling houses are the seller’s belief in unrealistic valuations.
Too many instruct us for our expert advice and mews specialism and then ignore our advice on the asking price citing a huge valuation given to them by a two year in boy in a suit working for one of the big five agents. On this market asking more than 10% above the location’s all-time record price per square foot is, in reality, a decision not to sell. These agents know this, but their business strategy is to grab market share and chip away at the asking prices until they eventually sell for less than if they were priced at launch.
The market is holding, but don’t be greedy
It’s astonishing how the millionaire owners are naïve enough to be duped by lazy estate agents giving un-evidenced ‘snake oil’ valuations. On this market a property will not ‘grow’ into its price, that kind of market has gone for the time being, however price right from the start and you can still achieve a record price.
No Prime Central London home owner wants to accept that ex-Chancellor George Osbourne reached in and stole a huge chunk of the equity of all prime central properties, but he did. And no it cannot be dismissed as a purchaser tax as no purchaser will pay an overblown price, plus the extra tax, on a pre-Brexit market.
We are still achieving record prices but we are doing so by giving accurate evidenced valuations supported by full market reports with the right marketing strategy to achieve it. The market is holding but don’t be greedy and remember all properties go up and down on the same tide.”