New certainty in the post-Brexit situation boosts activity in London’s real estate market. A three per cent tax on foreign buyers of homes in the UK that were included in Boris Johnson’s Conservative party’s manifesto ahead of the election saw a rush of sales in London’s luxury property market during the fourth quarter of 2019. A surge of deals on London’s most expensive properties shot up by 78 per cent compared to the same period a year before with heightened activity in home sales across London’s priciest markets. As 2020 is subsiding most of the uncertainty after the reach of the Brexit exit agreement, favourable factors are coming together for a buoyant spring market, releasing the pent-up demand for luxury properties.
Artist’s rendering of the life and buzz in the vicinity of Newham’s Yard South, London, UK.
Clarity Driving Demand
After a period of prolonged political uncertainty that culminated in the Brexit exit agreement and the election, the uncertainty shrouding London’s residential real estate market has been lifted, with a return to growth in the city’s prime neighbourhoods. The rise of properties listed by new sellers has been steadily increasing since December 2019, while the average asking prices have increased by 2.1 per cent, according to Rightmove House Price Report. The win of the Conservative Party is also good news to luxury home buyers – a win of the Labour party would have meant unfavourable to the luxury property market reforms to taxation and changes to laws for landlords.
Dining, living room, and dining configurations at Newham’s Yard South, London, UK.
With the Brexit saga out of the way, sellers are gaining confidence in a market no longer affected by Brexit deadlines. The optimism is spreading among wealthy overseas buyers with demand steadily rising even after the late 2019 buying frenzy in the hours after the general election result. Buyers are treading cautiously but with increased confidence, emboldened by better political and economic certainty. “There is a widespread perception that the London prime market has turned a corner and residential property now represents better value,” says Ed Lewis, Head of London Residential Development Sales at Savills. “This seems to be borne out by increased activity in these markets since the new year and a return of buyer confidence.”
Timely Bargain
While the unprecedented levels of interest are also driving the asking prices up, prime London’s sales prices were still 5.5 per cent lower than the year before. The luxury residential market, therefore, is still filled with bargains – amidst the cautious optimism, vendors are still hesitant to hike prices too much as not to stall the freshly buoyant residential market.
Prime Markets
Across London’s priciest neighbourhoods, including Mayfair and Chelsea, luxury residential sales increased by 34 per cent in the last months of 2019 and continuing into 2020. London’s golden postcodes of SW1 and W1 have seen much of the recent activities. “Neighbourhoods such as Marylebone and Fitzrovia look dynamic and exciting locations in the heart of Prime Central but at a more affordable entry price than Mayfair,” comments Lewis. East London’s boroughs have recorded the highest house price growths since 2014 due to continuing regeneration, driven by the success story of Canary Wharf and the construction of micro towns like Barking Riverside. Crossrail Line, expected to open in 2021, which will run out of Shenfield in Essex is triggering an upgrade to town centres in the eastern branch of the Elizabeth line. Prices are expected to rise 17 per cent in Redbridge – the highest of any borough – and spread to Lewisham, Barnet, Islington, Haringey and Richmond expecting to see double-digit growth.
As London remains an attractive place to invest from a domestic or international perspective, despite global uncertainties at large. Key reasons for “why London” remain: security of tenure, currency, language, time zone, great education, a massive pool of tenants, wide section of property type, diversity of the city. Lewis predicts that the noise around the UK’s trade deal may bubble to the surface in the final few months of 2020, but London “will always be a great aspirational city.”
BRITISH PROPERTY OUTLOOK
by John Koh, Regional Director of International
Project Marketing & Sales, One Global Property.
What kind of homebuyers do you anticipate these days especially with the shifting climate and geopolitical issues?
John Koh, Regional Director of International Project Marketing & Sales, One Global Property
Primarily, we attract new first-time investors who are just started looking at overseas property investment. There are also experienced investors looking to add to their portfolios. In addition, there are parents looking to invest overseas for their children who may be studying in the future. Not forgetting health and wellbeing will also be a big consideration for a lot of home buyers moving forward coming out of the Covid-19 pandemic that has gripped the world and will have a long-lasting impact on where buyers look to invest.
What do you foresee in the next few quarters in London’s real estate business?
We have already started seeing the very strong return of interests translating into actual sales since the latter half of 2019 all the way up to Feb2020 before the market went into COVID-19 lockdown. If we are able to find a vaccine for the current pandemic, we should see the return of the momentum that we’ve seen since early this year. In terms of the hottest countries to invest in, the United Kingdom would definitely be a key consideration. The UK has been ranked and recognised as one of the “top 3 destinations” for property investors year after year for various factors. These include the nation’s standing in global wealth, a longstanding Mecca for education, buoyed by the current favourable currency exchange rate and an all-time low-interest rate in housing as compared to many other global cities. Also, the demand is constantly outstripping supply in the housing market, which all leads to supporting the strong rental and resale market. All this is bolstered by a robust and transparent legal framework to protect buyers and sellers.
Newham’s Yard South
With a stone throw away from some of London’s most prestigious shopping and nightlife haunts, Newham’s Yard South offers luxurious city living with the convenience of access to London’s South Bank and adjacency to quiet gardens and public green space so coveted in London.
Offering a choice of highly refined one-, two- and three-bedroom apartments, the overall development also unveils a mix of restaurants, offices, gym, hotel and courtyards for the residents’ use and convenience. With the internationally renowned interior designer Rabih Hage at the helm of interior design and high-quality specifications of the apartments, Newham’s Yard South is a new benchmark in understated luxury and prestigious living.
Price: Starting from USD 865,000
https://www.ogpsglobal.com/en/property/detail/Newham-s-Yard-96
101 on Cleveland
A brand-new luxury development in Fitzrovia – located in central London – comprising 88 apartments, designed by award-winning architects Assael is 101 on Cleveland. The chic project offers a range of one-, two- and three-bedroom apartments in the new emerging hot destination to live in Prime Central London.
Contemporary interior furnishings at Cleveland 101.
Price: Starting from USD 1.8 million
www.101oncleveland.com