The Month in Numbers and the market reports for lettings, flats and houses in Prime Central London. Asking prices in K&C have fallen 4% over the year but we know that sale prices have risen. But what is truly impressive is that the number of homes selling in December for more than £2m has risen by 100% over the last year and in London, the number of homes selling over £1m (those that at least two prospective Chancellors hope to take a 'Mansion tax' from) rose by 200%!
The Month in Numbers always provides something interesting and this month is no exception. As they used to say, 'don't leave home without it'.
Don’t miss the point about the super rich and the top end of the property market.
People buying the most expensive properties aren’t worried about what they are worth. The über-rich are more concerned with the length of their super yacht or the last time they lunched with Nelson Mandella. Time was when “do you have a property in London?” was enough. These days, if the answer isn’t “One Hyde Park” then you are thought quaint at best. Like a beautiful woman on your arm, or a football team to cheer on, the richest need to own the best, but then it was ever thus.
After years in the planning and miles of column inches speculating about the project and the standard of finish, property wizards Nick and Christian Candy have launched One Hyde Park onto the market with a series of discreet parties. Invitations to these events immediately bestowed membership of an exclusive club - those who were invited were either some of the very richest people in the world or, at the very least, very personal advisors to these families.
Knocking the Candy brothers has become something of a sport of late for certain elements of the property world - often, by coincidence, by those who have not been favoured with their instructions. We know this to be a tragically British vice, the need to tear down those who we have often helped build up in the first place. Time was when Richard Branson walked on water but, once he had made it, he was fair game. Many in the property business simply can’t make sense of what the boys do and the fact that they make it work seems deeply unfair.
Yet the Candy brothers have been consistent in their creation of the very best property, designed and built to appeal to those for whom money really isn’t an issue. £6,000 per square foot would be a Central London record but those who worry about‘value’ miss the point of what it is that the Candys do.
People who buy a Rolex don’t do so because it keeps good time. Those who drive an Aston Martin almost certainly have another car that is more discreet, cheaper to run and perhaps even more reliable. People who buy the most expensive property won’t think twice about snapping up an apartment from the Candys because they aren’t troubled about its value. If you could find a surveyor bold enough to formally value these kinds of properties, they wouldn’t take account of the kudos that goes with just owning one!
It has been a record year already for the very best homes, with the rumoured sale of the most expensive house in the UK earlier this year down the road in Belgrave Square. One Hyde Park has been produced and presented by the masters of property marketing; people who understand the power and the value of a brand be it Nike, Coke, Sunseeker or Maserati. However rich or poor you are, we are all slaves to the brands that encourage us to pay more for something that you can buy cheaper to fulfil the same function. The very richest are no different and whilst this may mean that, like all dreams peddled by salesmen down the ages, super-prime Central London property could just be a phase, the Candys and their advisors have caught the mood just right and are rightly cashing in.
Like everyone actually involved in a project like this, we are legally constrained in what we can say about individual deals. I am sure that deals are already concluded at One Hyde Park well in excess of the fabled £6,000 a square foot. Some buyers will not be content with just one and will want a whole floor. Many who buy will never stay in the real estate they have acquired and, as a result, never appreciate the fact that Harrods and W A Ellis for example are both within walking distance. But then if you’ve got that much money, would you want to walk anyway?
Will new MP’s take advantage of the new expenses rules?
There is a perception that the property market grinds to a halt before an Election but in practice this is not really the case. With the prospect of a hung Parliament after May 6th, we may well be in for another Election in 2010 so it is imperative that we try to keep to ‘business as normal’ as much as possible. Low inflation, low interest rates, weak Sterling and international money keeps the London property market active but there is some understandable nervousness about higher taxes and how on earth any Government will remedy the huge black hole in our economy.
All three parties have their own ideas on Stamp Duty and HIPs but I do hope that they will all agree on one point in the Labour manifesto – to work with the industry to explore what further regulation of Estate Agents might be required to give buyers and sellers greater confidence and protection from poor practices. As a Board member of NFOPP, together with the RICS, I have been campaigning for this for some time.
The lettings market is a useful barometer for the economy. When the City is hiring, we are housing and when the City is firing, the supply versus demand ratio is turned upside down. The lettings market is strong at the moment with demand outstripping supply and this is an indication that there is an economic recovery which hopefully will continue after the Election with a sensible Government in place. There does not seem to be the changeover happening this year, ie tenants/employees are being kept in London and therefore renewing their tenancies and more are being brought over. The Government really needs urgently to encourage investors to buy property and to assist landlords in order to balance the shortage of stock.
This of course will also be in the MP’s best interests due to the change that is being made to MPs’ second home allowances. We have had the reluctant tenants, the reluctant landlords – we will now have the reluctant MPs. Proposals from Sir Ian Kennedy, the expenses watchdog, are that MPs will no longer be able to claim for the mortgage costs of a second home and, as a result, should not be tempted from the path of honesty. We are now aware that some MPs became part-time property speculators at the tax payers’ expense. The new rules mean that they will be allowed living expenses of up to £1450 per month. The suggestion is that MPs living more than a train ride away should instead be able to claim the rent of a one bedroom flat within a two mile radius of the Houses of Parliament - this could be anything from £170 per week to £3,000 per week. I trust Sir Ian has taken into consideration that, with interest rates so low and returns on property averaging circa just 4% in Central London, the opportunistic MP may see the prospect of buying a flat and then letting it to themselves as tempting as they could possibly achieve somewhere to live and a State-funded return on their money.
Being less sceptical, the rule change and an influx of new tenants (whether reluctant or not) will certainly benefit our landlords closer to Westminster.
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