House price chasm widens

“The chasm which exists between Prime Central London and the rest of the UK continues to widen, with the most recent Land registry statistics highlighting that London was the only region to see annual house price growth (at 2.1%).

“Recent sales at Candy and Candy’s One Hyde Park (60 sales now confirmed), the “Bulgari” Penthouse in Knightsbridge and Abramovich’s purchase of a £90m mansion in Kensington Palace Gardens, as well as many more high value transactions within Kensington and Chelsea and Westminster emphasise the much vaunted opinion that prime Central London property is “indestructible”, “a safe haven” and the “must have” for high net worth international individuals. Indeed, we have recently successfully sold a first and second floor maisonette in Pont St at £6.25m and an un-modernised house in Evelyn Gardens at £4.35m.  The relative safety of London (particularly when compared to the former Soviet States), its educational institutions and its global positioning as the world’s leading financial centre, are important factors as to why London is the destination of choice.  A favourable tax regime and weak currency are also obvious contributors.

“It is apparent in these economically straitened times that we cannot be complacent and take Central London’s “indestructible” position for granted.  The market can be adversely affected by terrorism, poor perception of our security forces and global financial crises. It is only three year since the last financial meltdown and whilst we are all conscious of the debt crisis in the US and the Eurozone (it seems that everybody is an economist these days!), it is quite possible that the phenomenal growth that we have seen throughout Central London may well soften over the autumn and winter months.  I believe that prices will plateau but we will continue to see a healthy level of transactions, particularly from investor buyers between £1.5m and £3m, however, developers building future price increases into their current computations should proceed with caution.”

Lucy Morton, senior partner and head of lettings at W A Ellis, adds: “Short lets’ has become a new buzzword in the lettings industry in London with the Olympics coming up next year.
 
“Every summer, there are some in SW19 who vacate their homes and let them for the Wimbledon fortnight for a substantial and inflated amount.  News that local authorities intend to clamp down on these ‘short lets’ by insisting that landlords apply for licences has sent a nervousness into this market.  Councils such as Westminster require landlords looking to rent out their properties for less than three months to obtain a licence which is not guaranteed to be granted.  This came about in an attempt to protect both bed and breakfast and hotel businesses from being undercut, as well as from particular flats in blocks being used like a hotel for short term occupancy.

“Short lets are common in the Capital with the vast majority offered to visiting professionals, and there are many agents offering services to those looking to rent out their homes for short periods. With London preparing for next summer, there will be more than the usual demand for accommodation.  No doubt Lord Coe and the 2012 Committee will be hoping that London landlords will also rise to the challenge and although there are few records of prosecutions by councils, those caught without the necessary paperwork could face a substantial fine.

“For those looking for the long-term, we have seen increased activity at the very top end of the market – due to the lack of stock on both markets, the ‘super prime’ will now happily either rent or buy in order to secure the right property.  We have let several properties in the last month at the very top end, one of which is in One Hyde Park.  We see this trend continuing and we have an ever-increasing share of this market.”

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