Views & Predictions On Central London Property Market | Janine Stone
By Simon Barnes
In demand and undaunted– London’s prime property market looks certain to remain strong and attract international buyers in 2015, so says Simon Barnes, property guru, who has been buying and selling high end property in London’s most desirable areas for more than 20 years.
In recent weeks, there has been much talk in the press about what 2015 will mean for the prime property market in central London.
Despite the predictions of many, I do not anticipate that the General Election in May 2015, a predicted increase in bank interest rates, or the potential introduction of a Mansion Tax will actually have any real impact on purchases at the ’ultra-prime’ level of the London property market. It has always been a fact that would-be buyers are inclined to cite such events as a reason for not going ahead with a purchase, or for some hard negotiating.
It is my belief that, through the first six months of next year, those people buying property in the £2m to £3m price range may well use any uncertainty as a negotiation point. That said, in reality buyers who do this, in my experience, tend to be looking for a convenient excuse to delay their purchase or simply pull out. It’s worth pointing out that this year by late summer 2014, many properties in prime central London were overpriced with greedy owners trying to cash in on the property boom. However, throughout the year the best properties in the best locations have continued to sell and I can see no reason for this situation changing in 2015.
Property in prime central London is a two-tier market. The first tier is made up of a limited number of properties in most price ranges which can be found in the right condition and perfect location and which are offered at the proper price. The second tier consists of a large number properties located ‘on the fringe’, perhaps on the wrong side of the street, lacking key amenities or not presented in absolutely the best condition.
International factors which we cannot anticipate may affect the lower end of the market as they have done in the past. However properties at the very top end of £20 million and above will continue to be popular and attract wealthy overseas buyers, because London is continually viewed as a safe haven with political stability and a sound economy. Historically, London has benefitted from the backdrop of unrest and political and economic uncertainty experienced in other countries and I see no reason for this being any different in 2015. Consequently, I predict that purchases of ultra-prime property in PCL will continue to happen, underpinned by the view that the capital remains a sound investment proposition.
Throughout 2014, there has been little pattern or predictability as to who is buying property at the top end of the London market. This year, I have seen interest from buyers from a very wide range of countries and this continues to be one of the London property market’s great strengths. Over the past 11 months, I have found buyers from areas I had anticipated, Russia, China, USA and the Middle East, but also buyers hailing from ‘new’ locations such as France, South Africa and India. Other markets will almost certainly emerge and my instinct tells me that two possible and largely untapped markets for 2015 could be Africa (Angola, Nigeria) and South America (Brazil).
Although London may be protected because of these existing and emerging markets, a significant change in international buying patterns in 2015 will mean a shift in the popularity of certain types of property. For example, Asian and Middle Eastern buyers, with their reliance on service staff, will want properties where working areas such as kitchens are hidden away from the main family accommodation and which offer separate staff accommodation. In contrast, buyers from Europe, USA and UK want genuine family homes, even if they are only intending using the property for part of the year.
While the layout and functionality of property varies in line with the cultural and practical needs of buyers, one thing which remains constant is that most buyers in prime central London will pay a premium for properties which are well presented and which offer the ‘instant gratification’ with top quality fittings and layout. Certain things, such as the quality of the interior finish and fittings, strong design, the designer make of kitchen and cutting edge audio-visual equipment ‘set the tone’ for the quality of a property. Never more than now do these factors remain key in influencing buyers and determining how or if a property will sell.
Above all, the ultra-prime London property market is based on quality and, as with most things, quality will sell. So despite variables, known and unknown, anticipated and unanticipated, my view is that in 2015, the winning combination of best location, the best property and the best price will continue to sell a property.