The last twelve months have offered a wide array of views, opinions, issues and opportunities for those involved in prime central London property, whether looking to enter, exit or simply transact: position and perspective have been key to deciding if an issue is an opportunity or not.
The impact of the June 2016 Referendum introduced great uncertainty to the market, with the value of Sterling reflecting this: decreasing for most of the remainder of the year. While this induced cold panic in some, in others it brought forth the warm excitement of opportunity: an issue of position and perspective.
For non-sterling based buyers, the fluctuation in currency rate was delivering a discount, in some cases, of as much as 20%. For buyers in this position the Referendum created a window of opportunity, either to enter the market or increase holding, at a significantly reduced cost.
It was an opportunity that many decided to act upon, but invariably only buying property in ultra prime areas and in the better streets and developments.
While sales volumes are noticeably down, prices are remaining firm in ultra prime areas, as demand for properties in these locations continues.
It is clear that during the current period of uncertainty, further heightened by the pending National election, that buyers are hedging their investment by increasingly buying in areas that will always have an appeal and cache above others: Knightsbridge, Mayfair, certain parts of Kensington and Chelsea and St James and The Buckingham Gate Quarter.
These areas continue to show steady price growth with The Buckingham Gate Quarter (the intimate area immediately next to Buckingham Palace) showing the largest gain, with further scope for growth. The area has growth of over 40%, with average price per sq ft in 2013/14 at £1,294 and the latest figures for 2015/16 at £1,829.
With continued regeneration in the surrounding and broader area this growth looks set to continue.
The window of opportunity created by the Referendum seems to be drawing to a close, though demand in ultra prime areas, for the best properties, still continues to grow. While those already in the market may not have benefitted from recent currency fluctuations, they are unlikely to have been penalised by them unless exiting the UK property market and Sterling.
The key issue that continues to negatively impact the market and dampen activity at all levels is the prevailing rate of Stamp Duty Land Tax.
UK Stamp Duty Land Tax was revised in the Autumn 2015 Budget Statement, with the new rates effective from 1st April 2016.
The aim of the revisions, besides increases revenues, was to deter second home ownership and overseas buyers: the effect has been to deter, and in some case prevent, natural movement in the ownership of housing stock. Something of no benefit to any party and a matter in urgent need to revision if not reversion.
Gary Hersham is Managing Director and Founder of Beauchamp Estates, a privately owned property firm in the luxury homes market. Beauchamp sell, acquire, invest and rent exclusive luxury residential homes around the world.
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