Thoughts from our Property Experts

"Central London’s luxury home market always sees a transition in activity and demand for London real estate in the month of July," notes Laurence Lai, YOUhome Chief Operating Officer.

 

"Reflecting on several months of tough market conditions, we have experienced active sales price cutting across all sectors of prime central London's property market. There have been rising numbers of homes available and even longer sales lead times on the market before a sale. It is important to understand where buyers and sellers stand today.

 

 

The government policies towards non-doms, HNWIs, and stamp duty taxes continue to take effect. Wealthy London residents who are free to move, are leaving the UK. A predicted net 16,500 millionaires will leave Britain this year, up from circa. 10,000 last year. This is impacting the number of active buyers in the market.

At the annual Mansion House dinner in the City of London in July, Rachel Reeves provided more insights into upcoming changes to the UK financial services sector. Although no clear details were forthcoming, there may be further changes to wealth tax this autumn. Some Labour MPs have suggested a 2% tax on assets worth £10m and more. We wait to hear more.

 

One visible shift arising from this exodus, is the focus on a more domestic based buying clientele. We can see this in our website traffic trends, and in recent buyer registrations. Domestic buyers may not replace the true volume of international buyers and this will impact future demand.

 

 

Early July always signals the end of the academic year, and the school summer holidays beckon. London parents heave a sigh of relief, as they pack their cases and head off to holiday destinations abroad, where coastal living, summer entertaining and a slower pace of life are embraced. 

July and August are naturally slower sales months in prime central London. However, there is still a wave of preparation taking place for the September back to school season. Families like to be settled before the new term begins. Mindful of the impact of the government’s recent private school taxes, local schools will be relying on greater international pupil intake to replace their lost domestic families. These families invariably require new living arrangements. Furthermore, London tourism is heightened at this time of year, and with it new international buyers registering their interest in a London home. 

 

Prime London neighbourhoods tend to remain fairly constant in popularity. Golden postcodes do not change significantly: SW1, SW3, SW7, W8 & W11 remain familiar and robust. They continue to be a magnet for international clients. These areas offer a safer investment for the longer term and proximity to buyer cohorts. They also benefit from highly visible investment in terms of new residential and commercial real estate.

 We are currently selling an immaculate luxury apartment in Eaton Square, Belgravia. And, we are seeing a younger buyer profile considering this area, drawn to the local lifestyle lifted by Elizabeth Street and Eccleston Yards. Heritage still counts enormously, security and discretion are key, but it is the vibrancy of the surrounding newly regenerated areas that embody ‘luxury lifestyle’ today.

 

Looking at sales trends for Kensington, Notting Hill and Holland Park Q2, sales transactions were down almost 25% versus last year. Between April and June the average discount on initial asking price was just over 8%. But, if we look at actual offers on homes, only 16% of all homes listed for sale went under offer.  (*Lonres)

 

That said, there is always a shortage of ‘best-in-class’ homes, and a growing list of discerning buyers waiting for the ‘right home.’ I’ve written about turnkey properties before and offering an immaculate home in a golden postcode area, will carry great weight at the negotiating table. 

 

Today, home buyers are planning for the longer term in central London. The cost of moving dictates a longer stay in one place today. Buyers will strive to use all spaces to maximum effectiveness rather than plan another move. Location matters, proximity to schools and local amenities makes city life easier.   

 

In summary, as local families head out of the city for their well-earned summer break, London welcomes a continuous flurry of seasonal visitors, both domestic and International. The city will no doubt ignite the passion and desire from some to make the transition to live and work here. It is a well-documented, enduring cycle. Enjoy your holidays!"