Prime property

I have to admit, the 2% stamp duty increase took the property market by surprise. It had been leaked to the FT that morning but no-one thought it would take effect immediately, so we were straight on the phone to our buyers for property over the new threshold and plans for Wednesday afternoon were scrapped as we assisted affected Clients to exchange before the midnight deadline, saving all concerned hundreds of thousands of pounds.

In the longer term, Manse & Garret Property Search are not forecasting significant change to prime property sales in prime central London. Clearly the £2 – £2.25m price bracket will feel some aftershock for a few months, but given the lack of supply and increasing demand for stock in the best areas, we don’t think the increase in stamp duty will have a marked effect.

However affected property just outside the centre is likely to take a hit. Popular areas from Richmond, Chiswick and Fulham to the West, Islington, West Hampstead and Muswell Hill to the North and Greenwich and Blackheath to the East are likely to suffer few sales between £2m and £2.25m in the months to come. Motivated vendors are likely to take a hit on price but many will stick to their guns and hold out for the extra hundred thousand and these sales will stick.

Although about 80% of the prime central London market is dominated by overseas investors and many people buy using a corporate structure, in the grand scheme of things, given the capital gains which are routinely made in prime central London, we don’t see the new rules making a difference to price. After all, the best apartments on the best roads from Knightsbridge, Belgravia and Mayfair to Chelsea and Notting Hill are appreciating at circa 20% per year. Most investors will hold prime central London real Estate for 3 years or more so although the 7% stamp duty is an irritation, it won’t make a difference to the logical investor. Also the factors driving the prime central London property market remain, ie political instability in parts of the middle east, the rise of emerging markets who want to keep their offshore earnings offshore but in a stable political and economic situation and global economic uncertainty which favours prime central London real estate as an asset class.

The good news for buyers is that the current low stock levels are likely to be improved for the next year or so, as those looking to sell, rush to do so, mindful of the threat of retrospective legislation, when it comes in in 2013.

Super-prime property

It is the buyers of super-prime property £15m plus who will suffer most from the budget 2012 and it will be interesting to see the effect on this area of the market. There is very little to choose from in this market, few are advertised officially and those which are available are frequently priced using a multiple of their true value. Most of these houses and apartments are used as pied-a-terres and I suspect some will struggle for a few months, while the tax advisors of the super-wealthy find a scheme to mitigate tax and the prospective buyers consider whether they still want an awe-inspiring place in the UK.

The sub-£2 million property market London and Country

There will inevitably be a number of investors with large portfolios of property held by offshore companies who decide to liquidate ahead of the 2013 Finance Bill. As a result we anticipate more stock coming to the market over the next year but whilst this will increase choice for buyers, we don’t think it will have a huge impact in price, although prices should hopefully stabilise this year and not make the significant gains seen during 2011.

Given the issues with very restricted supply and burgeoning demand, which are likely to continue, we definitely don’t see the measures reducing prices.

Technorati Tags: budget, capital appreciation, prime central London property, Stamp Duty, Tax

Technorati Tags: budget, capital appreciation, prime central London property, ptime property, Stamp Duty, Tax

However the perils of being a leaseholder, whether it’s for 999, 99 or 9 years, are always something to bear in mind. Leases often contain restrictions about how someone can live in their own flat. Most of the clauses are quite common and most people will have encountered them or heard of them; pets are frequently forbidden, the running of a business from a premises is prohibited and changes to the outside of your home often requires permission from the freeholder.

But leases can go even further than this – as the owners of a flat in Eaton Mansions have discovered, to their cost. These particular leaseholders installed a wooden floor in their £4.7 million flat in the exclusive red brick building, moments from the chic Sloane Square. They were subsequently sued by their downstairs neighbours who could no longer cope with the noise of constant footsteps above them. It turns out that the lease provided by the Grosvenor Estate – the freeholder of Eaton Mansions – prohibited the installation of wooden floors. Indeed, the lease went further, it required carpet in every room except the kitchen and the bathrooms. The case has been heard by the Court of Appeal and judgment has been reserved, so it remains to be seen whether the courts will come down on the side of carpet or hardwood flooring.

The lesson here, for anyone purchasing a flat, particularly when they are spending a significant amount of money, is to check the lease very closely. At Manse and Garret we spend much of our time combing through old leases looking for onerous clauses that could affect our clients. We would always seek to ensure that if someone won’t be able to lay a beautiful oak floor in their drawing room they know about it before any money changes hands!

The primary argument in favour of the mansion tax is that it is a tax on ‘wealth’ as opposed to a tax on ‘income’. However at Manse and Garret we see on a daily basis that this simply isn’t the case. We deal with properties costing over £2 million and they are a far cry from a mansion. In prime central London £2 million normally only buys you a flat, usually a leasehold one – which means that you don’t really own the ‘mansion’ you have bought. In the London surburbs – Richmond, Putney, Muswell Hill, Highgate – over £2 million will get you a house but at less than £3 million it’s often semi-detached, with very little garden to speak of and it’s on a typical residential street. The simple fact is that if you picked these properties up and placed them in any number of good postcodes around the country – Lewes, Solihull, Alderley Edge– they wouldn’t fetch £1 million, let alone £2 million and above. So what we really have is a tax on London and it’s environs.

The tax will not even affect wealthy Londoners but rather people who are asset rich, many of whom have chosen to buy in and around London because they work in the city. They are being punished because they want to raise their families in a nice environment without a lengthy commute at either end of their busy working day or because they want to enjoy central London entertainment and shopping resources as a reward at the end of their long working day. The notion that the people buying the properties in London worth over £2 million are all fabulously wealthy, non-working and lazy individuals with money from some unknown but ultimately bottomless source is a myth. They are hard working individuals who contribute to the economic worth of Britain every day.

That’s why Manse and Garret do not favour a mansion tax, but if George Osborne decides that he does on Wednesday 23^rd March we will continue to be committed to helping our clients find fabulous properties, which will retain their value and make the mansion tax seem like a small price to pay for owning such a good investment.

When the GLC was abolished in 1986, the grand, Ralph Knott designed “Edwardian Baroque” building located on the south bank of the Thames became surplus to requirements. The site was eventually sold in 1992 to the Japanese property developer Shirayama for a reported £60m – just before a recession and property slump. Given the economic climate, this figure raised a few eyebrows in the property world and some were concerned that Shirayama would not have the money to convert the building, having already spent so much to procure it. With hindsight it was a solid investment. The luxury hotel, aquarium, museum, exhibition space and restaurants attract over 17million visitors a year. The converted flats sell for around £800 – £900 a square foot – outside of the popular Shad Thames, these levels are uncommon for the SE1 postcode. These well-located flats, in the handsome Portland Stone building with excellent views have never failed to attract buyers and tenants.

Last year it was announced that the long term viability of the Houses of Parliament as the seat of British government was being questioned. Having always been an expensive place to run, the whole building is suffering from subsidence, and is slowly sliding into the River Thames. Thought to have been affected by the excavation of the Jubilee Line extension in the 1990s, and the underground car parking complex on site, surveyors have said that repairs to the building would take at least five years to complete. Government accountants argue that it doesn’t make sense to spend an estimated £1billion to repair an estate that is worth £1billion, although I am sure that English Heritage might think otherwise.

The Houses of Parliament, if converted to commercial and residential premises would no doubt be an even more popular housing and property destination than County Hall.  With 872 ft of river frontage on a site of approximately 8 acres, the number of luxury residences that could be created would certainly tempt any number of wealthy buyers, many of whom would happily buy off-plan to own such a desirable piece of real estate in one of London’s best known buildings with the SW1 postcode to match. Proximity to Westminster tube, to the West End and the caché that comes with owning property in one of the world’s most iconic buildings would certainly create demand for any residential property that was available on site and it is likely that the price per square foot achieved would be well above the £1,500 average that this part of Westminster currently commands.

So it seems sometimes paying more for property in one of London’s best buildings can pay off, not to mention also giving you an address everyone will recognise and a home or business everyone will want to come and see. If you need Manse and Garret to locate a unique home for you or a unique addition to your property portfolio please don’t hesitate to get in touch.

Technorati Tags: Historic buildings, House prices in London, London property, Planning Permission, property market news, Westminster house prices

‘Property Porn’ is the nation’s past-time, and the Metro indulged commuters this morning with a story about a unique house, in Newquay, Cornwall, which comes with its own suspension bridge.  I don’t think the 30 ft suspension bridge is part of the appeal, but rather something that you’d gladly put up with to live on Towan Island – a rock surrounded by the sea when the tide is in and a sandy beach when it’s out. Originally a tea-room, the 1930’s house has been lived in by the current owners for just over 10 years and has direct and un-spoilt sea-views. The extraordinary location and sea-views could be yours for £1million.

Photograph taken by Ennor

What will £1million buy you in London, Brighton or Sussex? Well that of course depends upon the location. In Knightsbridge, arguably the most prime of prime central London, £1million would buy you a one bedroom flat on the second floor of a very nice mansion block. In trendy Shad Thames, SE1, beloved by city folk who hate public transport, you could get a spacious two bedroom warehouse conversion with roof terrace and view of Tower Bridge for the same amount.  In Sussex you could move in to a charming rectory with a beautiful cottage garden. In Brighton you can buy a luxury three bedroom apartment with roof terrace and direct sea views, or lots of family houses in good roads and still have a few hundred thousand in your back pocket.

As London and Sussex Property Finders we don’t know much about property in the South-West, but if you’re searching for a unique property in London, or sea views in Brighton or Sussex, call Manse & Garret Property Search, the UK’s Best Property Finders on 020 7923 7564 and let us find it for you.

Technorati Tags: Buyers agents, House Prices, House prices in London, London Buyer's Agents, South East House Prices, sussex house prices

First-time buyers have been able to climb onto the property ladder due to the re-availability of 95% mortgages and a number of schemes, such as FirstBuy, Lend a Hand and the Save to Buy Scheme launched by Nationwide.

At first glance, these schemes seem to be just what is needed for ‘first-timers’ to climb onto the bottom rung of the property ladder.  However, regardless of whether someone has spent years saving up for a 25% deposit, has a generous Aunt willing to put money aside, or manages to get backing from their Local Authority, this still does not guarantee that the mortgage application will be successful.

For a start, a bank or building society will only lend four times the amount of an applicant’s wage.  For those earning the minimum wage (roughly £12,600 per year) the amount a mortgage provider would lend is £50,400.  The average annual salary in the UK is around £26,200, which would generate a loan of £104,800.  This means that those earning the average salary would (at most) be able to purchase a 2 bedroom property in London – but only in areas such as Thamesmead, Abbey Wood or East Ham.  Those on the minimum wage would be able to afford a garage in Prime Central London, a one bedroom houseboat, or a share in a new build property, (which also works out more expensive per month than buying outright).

Realistically, unless you are fortunate enough to be able to purchase property outright, or to earn at least the average UK wage, the chance of owning your first property seems to be slim-to-non-existent.  Whilst there has been a rise in the number of first-time buyers purchasing their first property, I suspect that the proportion of first-time buyers unable to buy is much higher than the proportion who are.  The mortgage schemes available, for some, are most definitely a mirage, as they lack the substance necessary to be tangible.

Fortunately for top-end Buyer’s Agents like us, our first-time buyers are either able to meet the requirements for a residential mortgage, or have the funds necessary to purchase a property outright.  We are well placed to help them secure their first home in the right area and at the right price, as we know how property transactions work in the UK.  If you are looking for your first (or second!) property in London or Brighton, give us a call today to see how we can help you with your search, as we are officially the best Property Finders in London.

Technorati Tags: First time buyers, Mortgage Lending, mortgage schemes, mortgages, property, property market news

Of course there are always landlords who will consider tenants with pets, and it is worth checking the tenancy agreement to see whether consent will not be unreasonably be withheld and to contact the landlord to see if they will consider it. It is always worth making the best case for your animal: landlords are much more likely to consider a cat or a small dog, over a Great Dane!

 We managed to secure a beautiful house in Chelsea for a couple who had a much adored (and pampered) dog who was very much a part of the family. In this case, when briefing the search to all the relevant agents we always specified at the beginning that they had a small dog, and that the landlord would need to be ok with this. The landlords of the property that they loved were dog-lovers themselves which meant that they were quite flexible on the issue once we had vouched for the dog’s good behaviour! However what also helped our clients is that they were renting a freehold house, so the only potential obstacle was the owner.

 When renting a leasehold property, as the majority of flats in London and Brighton are, it is not simply the landlord’s discretion which matters – this is because there is an overall freeholder for the building and many of the head leases for properties in London and Brighton specify that there are to be no animals kept in the flats which make up the building.

 This is therefore also an issue for people looking to buy their own flat. You could be forgiven for assuming that if you are the owner of a property, your cat, dog, or parrot can live there with you but this is often not the case; if you own a leasehold property this may be forbidden on the lease. It may be worth contacting the freeholder to see if they will make an exception, however this can be a lengthy process and more often than not the freeholder will say no, as they have to consider the other owners of the building.

 That doesn’t mean that you should give up hope. Last year we found our clients a wonderful pied a terre in Shad Thames in a well-known block. Their dog was not to be a permanent resident, which no doubt helped their case. The management company granted permission for the dog   Having written consent we advised the Porters, who man the reception 24hrs a day, to let them know that the dog was not to be refused entry and that we had the appropriate permission, and the dog happily visits on weekends, so all may not be lost for your property search.

 If you are looking to rent or buy in London or Brighton and have a pet that needs to be taken into consideration, please call the UK’s Best Property Finder on 020 7923 7564.

Technorati Tags: buying, freehold, leasehold, pets, property search, renting

The link is expected to cut journey times between London and Birmingham by 30 minutes. Commuters who traverse this route will benefit from shorter journey times but it is the disruption during construction and the on-going noise created by trains travelling at speeds of up to 225mph in 2026 that is causing concern for property owners.  A Department of Transport Report from 2009 predicted that 21,300 households would experience an increase in rail noise, which in our experience is not what people look for when buying a house.

If your house is under the route then you can expect to receive a compulsory purchase order from the government, however not until 2015. The government has promised that property will be purchased based on the open-market value, “as if unaffected” by the scheme. Owners will also receive a home loss payment of 10% of the property’s value and reasonable costs will be paid. The problem with this is that many of the affected areas have already experienced a decline in house prices because the scheme has been years in the making and it is not clear if these home owners will be bought out at pre-HS2 prices.

Perhaps those in a worse position are those whose homes will not be considered for compulsory purchase, but who will be affected by the noise.  The government says that 3,100 properties will experience a “noticeable” increase in noise. Homeowners will be able to claim for any loss of value on their property resulting from noise, vibration or artificial lighting, but only once the railway has been open for a year. There is no amount of secondary glazing or sound proofing that can help you to enjoy your garden in peace and quiet and it is these homeowners who may have trouble selling their properties even at lower prices. The good and influential people of Primrose Hill were successful in making enough of a fuss so that the proposed route under Primrose Hill was changed so that they would not be negatively affected by vibration from the trains. Unfortunately the good people of Belsize Park have not been so lucky, Adelaide Road, Fellows Road and Eton Avenue are now likely to be affected instead.

What will happen to property prices in Birmingham and London? The value of property in Birmingham is likely to increase, as demand for property in Birmingham increases, becoming more attractive to those who may not have considered commuting this distance before now. As for London, will an extra rail-link into Euston boost property prices in this area? It’s unlikely that there will be that much of an increase; Birmingham is not as enticing a location as Paris and so proximity to this rail-link is unlikely to be at the top of many property buyers’ wish lists.

Technorati Tags: Birmingham, high speed 2, House Prices, House prices in London, HS2, London Buyer's Agents, Primrose Hill

Taken by EG Focus

Nine Elms is a 200 acre stretch of undeveloped land south of the river opposite Pimlico. Situated between Battersea Park and Vauxhall it is just over 3 miles from Covent Garden. The re-development of the iconic Battersea Power Station and Tideway Wharf into luxury flats is something that has been discussed for at least twenty years, and there have been more recent plans in place for the US embassy to relocate here from Mayfair in 2017. I believe that the Northern Line Extension is the key to ensuring the successful re-development of this area – a sentiment the developers involved share. This is best shown at http://northernlineextension.com/ where a website has been created and consistently updated with positive news stories relating to the scheme.

Knight Frank ear-marked Nine Elms as one of its 2012 “Hot Spots”. They have predicted an 140% increase in property values by 2016, with people paying around £1,800 per sq. foot, compared to  £750 per sq foot which property currently achieves in the area. The new tube links will bring this area within 11 minutes of the West End and the City.  In central London, location and travel-time are more often than not discussed in terms of tube stations and tube journeys and by putting Battersea and Nine Elms on the tube map it makes the area more attractive to young professionals, increases demand, and increases property prices in the area. At Manse & Garret Property Search it is unlikely that we will see many of our clients looking to buy in this area, as end-users.  Some of our investors may be interested purchasing property here as buy-to-let investments, but we certainly won’t be buying for them at £1,800 per sq foot!

Technorati Tags: Buy-to-let, Buyers agents, House Prices, House prices in London, northern line extension, re-development, transport links