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The State Of Super-Prime In London

By A Property Insider

London A Safe Bet For The International Investor, so says Simon Barnes at H. Barnes & Co

‘London has long been regarded as a safe haven for overseas investors and those seeking to buy into one of the most desirable capitals in the world.  London never dates, never goes out of fashion; it is a rich melting pot of culture with theatres, galleries and museums.  It offers an elite selection of private schools and the largest number of universities in one city, ranking as some of the best in the world.  Renowned for its iconic landmarks, St Paul’s Cathedral, Westminster Abbey, Buckingham Palace and Tower Bridge to name but a few, its breadth of architecture, amazing skyline and river views never fail to capture the imagination of its endless visitors and residents.

London doesn’t standstill, its retail offering is consistently reinventing itself as Mayfair undergoes a radical transformation and unique characterful ‘independent villages’ are created such as Chiltern Street, backed by the likes of major landlords – the Portman, Grosvenor and Cadogan Estates are all committed to creating bespoke shopping and social hubs with a distinctive character.  Massive investment continues to pour into the capital to improve the transport system and ‘clean up’ the city.  New skyscrapers and developments pepper the cityscape indicating that London attracts global investment which will continue to expand.

Currently the majority of international investors and buyers drawn to all the benefits that Prime Central London offers are coming from China, Asia and India, while there are always a steady flow of wealthy Middle Eastern buyers.  Recently, there has been a slight shift in the buying pattern of Chinese and Asian investors, having previously preferred new build developments, where they would buy up say ten units in one development, now they are focusing more on ‘trophy homes.  Certainly, I’ve noticed that the last few ‘big deals’ were transacted by wealthy Chinese buying large single residences for upwards of £10m.

The flow of money from China into UK property may be about to diminish though as reported in August this year by Rhiannon Bury in the Daily Telegraph: “China’s cabinet on Friday issued guidelines to regulate overseas activity in a change that could signal the end of the country’s frenzied M&A activity in recent years. Beijing will limit deals in property, hotels, entertainment, sports clubs, and the film industry, stepping up its campaign against what the state planner described as the “irrational” acquisitions of foreign assets. But some property experts have indicated that this might have an effect on prices for property in the UK because demand has been driven by Chinese buyers in recent years.

As a buying agent, one has to be adept and respectful when dealing with all clients.  In the case of looking after overseas buyers it is important to respect that their lifestyle and cultural reference points.  Also there can be an element of ‘education’ and ‘enlightenment’ involved when advising international buyers because the Prime Central London has its own idiosyncrasies in terms of postcodes, good and bad streets, types of architecture, leaseholds, Conservation areas and Listed buildings, even restrictive covenants for some buildings, all of which need careful explaining and handholding when managing buyers from overseas.

Preferred areas for overseas potential buyers continue to be the traditional Prime Central enclaves of Knightsbridge, Kensington and Belgravia, while St John’s Wood is popular with the pull of the business school. Areas such as Chelsea and Notting Hill tend to attract Europeans who prefer to rent rather than buy.  The weak value of the pound has made buying in London an attractive proposition and without doubt, now is the time for investing in Prime Central London as it’s a buyer’s market.  We’ve seen a shift from Non-Doms moving out of London to Switzerland and Monaco, tired of feeling increasingly penalised by the Government’s changes to tax legislation, including Capital Gains being liable on property owned by Non-Doms, uncertainty over Brexit and hikes in Stamp Duty.

Personally, I would advise buyers to steer clear of large new build developments being sold off-plan, where many units remain empty or rented and where there is an over-supply so sale prices are compromised.  Take Battersea Power Station where initial take up was considerable but now around 90% of flats are back on the market, resulting in reduced sale prices due to a surplus of stock.’