Summertime property summary.
Here in London it’s been sweltering for weeks. Months, even, if you include the record temperatures for May. We are now into the third week of the current heatwave. But is the property market itself hotting up?
After a freezing March and only slightly milder April, the spring market (traditionally a time of abundance in prime residential London) was a non-event. Coupled with the still uncertain geo-political situation, I blogged about low-pressure meaning only one thing – the tide was about to turn.
There are signs that is happening, and I thought I’d share them with you here:
1. Commercial interest is up
We just completed on a serviced apartment block in Edinburgh – our first deal outside of London and a sizeable investment for our clients. We now have a partner in Scotland with whom we are working on another potential opportunity. There is appetite for large dry acquisitions in this sector and all of a sudden the market seems buoyant, with increasing activity across this field. Last week a client with a one-night stop over in London asked to view some commercial premises in Chelsea, on at £45m. Naturally I obliged - even at 10pm on a Friday night, a first for a viewing of this kind!
2. Residential market showing signs of life
It’s all about three key points if you want to succeed in prime-residential property just now. Firstly, you have to price correctly. The days of exorbitant price points are gone, and in their place are forensic buying habits, where price comparison is easier than ever before, and in a quieter market no one is in a mad rush. So unless properties are priced right, they won’t sell, or will be forced into damaging discounts. Secondly, if you want to sell quickly then finish your property well. More and more buyers expect their new home to be finished – and to exacting standards - before they exchange contracts. Perfectionism, in this case, is not a dirty word. Lastly, if you do have a property that needs work, expect low offers as established and up and coming developers will bite your hand off to get theirs on it.
3. Super-prime is up
In the past few weeks two super-prime W11 houses have sold, one for £25m and the other for £40m+. Those kind of deals haven’t happened much since mid-2016, and two in a week – or a month even – has been unheard of. There are reports of large amounts of business being done in Mayfair, and with the new super-soft Brexit looking like a non-event it could be that buyers are finally looking to get off the fence and invest their funds again.
4. Hybrid model emerging as online brands give in to the facts
Online property agents such as Purple Bricks and Emoov look to be slowly acknowledging the simple facts – that it takes painstaking customer service and many years of experience to succeed in the prime residential property game. Their website-only subscription models look doomed to fail without the support of a professional team of agents in the field, and several have announced recently they are moving to a hybrid model which accommodates both new technology and traditional agency methods. The doomsday prophecies look ill-informed as consumers wise up to the fact that very few people are actually selling their houses at huge discounts, especially in prime residential areas, and the online brands themselves realize it will take more than hyperbole to generate real business results beyond short-term subscription fees – and the inflated share prices this type of revenue can fuel.
5. I’m going into business with my wife!
My other half, the supremely talented and beautiful Najwa Mroue, is launching Homes One Atelier. Our team will assist you from start to finish, whether you have just bought your home or are looking to refurbish an existing one. We identify what needs to be done, co-create the design with our clients, invite contractors to tender, and oversee the entire development process. We believe that your living space should fit around you and support your flow, accommodating your daily routine and your rituals. For this reason we seek to understand our clients first and foremost, and see things the way they do. From there our response to each brief is unique and bespoke, and resonant with our client’s vision and values. This new division of our business is already working in our traditionally industrious ways, and we are looking forward to a busy summer, as always helping clients who are in unfamiliar territory to navigate the complexity of the London prime residential property market.