Property Intelligence by the marketing cafe

ISSUE 01

A DIFFERENT PERSPECTIVE ON THE WORLD OF PROPERTY FROM KNIGHT FRANK

DREAM HOME GAME

TALKING POINTS

PI PROPERTY INTELLIGENCE

THE WORLD IS NOT ENOUGH

WHY UK? INVESTMENTS OF PASSION

THE HONEST ANSWER

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

WELCOME

CONTENTS

NOT ANOTHER PROPERTY MAGAZINE – JUST WHAT WE NEED!

WITH OFFICES UP AND DOWN THE COUNTRY, WE ARE AWARE THAT IT CAN SOMETIMES BE DIFFICULT TO SEPARATE THE WHEAT FROM THE CHAFF WHEN IT COMES TO PROPERTY UPDATES. Whether it be the national news, endless mail from your local estate agent, or anecdotal dinner-party chat; taking away a clear message is often a challenge. That is why at Knight Frank we have decided to produce something different for owners of prime property both in London and the Country. In this first edition of Property Intelligence we would like to dispel any perceptions you may have about magazines produced by estate agents and present you with something fresh and what we believe to be relevant to you. If you decide to read further, you will not find pages and pages of sold properties to indicate how well we have done in your area. Nor are we going to wax lyrical about how buoyant the market is when you may not have found this to be the case, nor will we repeatedly “bang the corporate drum”.

Instead, we want to begin to take you on an interesting journey around the world of property, in a way that you may not have experienced before. Not only are there some light-hearted sections, such as the Dream Home Game, we also focus on the topics that our clients are most frequently seeking advice on. In articles like The Honest Answer, we cut through perceptions of estate agents, with some candid insights that you won’t find elsewhere.

04 WHY UK? HOW DO PROPERTY PEOPLE CHOOSE WHERE TO LIVE? WE ASKED OUR AGENTS WHAT THEY LOVE ABOUT THEIR LOCATION.

So, before you utter the words “not another property magazine – just what we need!”, and drop your copy into the recycling bin, please spend a few minutes with Property Intelligence and do please let us know if you think we have struck a chord.

WE WANT TO BEGIN TO TAKE YOU ON AN INTERESTING JOURNEY AROUND THE WORLD OF PROPERTY

06 ANDREW HAY Global Head of Residential Property

06 INVESTMENTS OF PASSION FROM CLASSIC CARS TO WATCHES, WE LOOK AT SOME OF THE MOST POPULAR INVESTMENTS OF PASSION.

08 WHERE ARE YOU DESTINED TO BE? PLAY OUR DREAM HOME GAME TO FIND THE PERFECT PROPERTY FOR YOU.

12 TALKING POINTS

WE EXAMINE SOME OF THE MOST TALKED ABOUT HOME OWNER ISSUES OF 2014.

14 THE HONEST ANSWER OUR MOST EXPERIENCED AGENTS GIVE ADVICE ON PROPERTY MATTERS THAT CONCERN YOU.

16 THE WORLD IS NOT ENOUGH AS INVESTMENT IN SPACE TRAVEL ROCKETS, LIAM BAILEY CONSIDERS THE IMPLICATIONS FOR PRIME RESIDENTIAL PROPERTY MARKETS.

@ www.knightfrank.com pi@knightfrank.com Twitter.com @knightfrank Facebook.com /KnightFrankLLP Linkedin.com /company/knight-frank Pinterest.com /knightfrank/

18 ABOUT US A COLOURFUL SELECTION OF THINGS WE’VE DONE IN THE PAST 18 MONTHS.

All correspondence and enquiries to: Knight Frank LLP 55 Baker Street London W1U 8AN United Kingdom T: +44 20 7629 8171 © 2014 Knight Frank LLP All rights reserved. No part of this publication may be reproduced by any means without the written permission of the copyright owners. Although every effort has been made to ensure the accuracy of this publication, the publishers cannot accept responsibility for any errors or omissions. Designed and published by www.themarketingcafe.net

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

WHY UK? How do property people choose where to live? We asked our agents what they love about their location.

ISLINGTON

Whether you’ve settled down into a single life or family life with kids you’re guaranteed to fall into one of the many great dining or date spots – Ziloufs for cocktails, Le Sacre Coeur for home from home cooking, The Tow Path cafe on the canal for toasties. ANDREW GROOCOCK PARTNER, CANARY WHARF OFFICE

BATH

Bath is quite simply an easy place to live, with little importance given to how much money you earn! A stunning City with a village atmosphere. We have great schools both state and private and of course one of the best rugby sides in the country. Why would you want to live anywhere else? CHARLIE TAYLOR PARTNER, BATH OFFICE

OXFORD

I LOVE LIVING IN WEST BERKSHIRE BECAUSE OF THE BEAUTIFUL COUNTRYSIDE, GREAT COMMUNICATIONS, SCHOOLING AND PUBS! NICK LOWETH PARTNER, HUNGERFORD OFFICE

Culture combined with wonderful architecture, large open spaces, variety of good schools, proximity to London and scenic countryside on the doorstep. WILLIAM KIRKLAND PARTNER, OXFORD OFFICE

WIMBLEDON

We love living in Wimbledon because we love living in a village that is also in the heart of London. DOMINIC PASQUA PARTNER, WIMBLEDON OFFICE

CHELSEA IS A COMMUNITY OF LIKE-MINDED PEOPLE IN THE MIDST OF A GLOBAL CAPITAL AND HAS THE BEST TO OFFER OF A CITY IN ONE CONVENIENT PLACE. .

JAMES PACE PARTNER, CHELSEA OFFICE

HEREFORDSHIRE

YORKSHIRE

We still have local shops like a butchers and a bakers. It is really rural, whilst still being only an hour to Birmingham International airport and the world!

Wensleydale cheese and Black Sheep beer! TIM WARING PARTNER, HARROGATE OFFICE

CHRISTOPHER DEWE PARTNER, COUNTRY DEPARTMENT

SURREY

DORSET

SUSSEX

Surrey offers stunning countryside, great access to London, both a cosmopolitan lifestyle in the towns and peaceful rural living in the villages.

Dorset is as multi-layered as the famous fossil flecked cliffs along its Jurassic Coast. With fabulous scenery, this county is rich and vivid. Charming market towns and tiny villages are tucked into this tranquil haven.

TIM HARRISS PARTNER, GUILDFORD OFFICE

LUKE PENDER-CUDLIP PARTNER, SHERBORNE OFFICE

JAMES MACHELL PARTNER, HORSHAM OFFICE

Sussex gives you everything you could want – fabulous countryside, stunning coastline, picturesque villages, market towns and quirky seaside spots.

EDINBURGH

Edinburgh is a beautiful city which punches well above its weight in terms of arts, culture, great restaurants and shops. The Festival in August brings an amazing buzz, with an unbelievable array of shows and events. EDWARD DOUGLAS-HOME – PARTNER, EDINBURGH OFFICE

BATTERSEA

The shopping in Battersea is excellent with a short walk over the Thames to the Kings Road and Sloane Square. The Prince Albert’s excellent British menu and beer garden is a Sunday afternoon well spent – dogs welcome. MATTHEW SMITH PARTNER, RIVERSIDE OFFICE

Photo: www.theedinburghblog.co.uk

To join the discussion about living in the United Kingdom, tweet us @knightfrank using #whyUK

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

INVESTMENTS OF PASSION Prime property is widely regarded as a classic safe-haven investment. We examine some emotive alternatives.

house, of course, is often a lovely thing in its own right. But when combined with a collection of personal treasures it becomes a truly wonderful reflection of its inhabitants’ lives and personalities. The art hanging on the walls, carefully selected vintage wine slowly maturing to perfection in the cellar, favourite pieces of cherished antique furniture, the jewellery or time pieces on a dressing table evoking special memories, perhaps a classic car in the garage or even stamps in an album; they all help turn a house into a home.

with the FTSE 100 (+51%), and better even than luxury residential property in prime central London (+133%), it was the performance of its individual components that was most eye-catching. Classic cars, for example, had leapt in value by an astonishing 456% over 10 years, while stamps and coins had risen by over 200%. Art (+193%), wine (+176%) and jewellery (+156%) also outperformed prime London houses. Sadly being old and attractive doesn’t guarantee investment-grade performance. Antique furniture is

CHANGING FASHIONS AND TRENDS ARE ONE REASON THAT INVESTMENTS OF PASSION CAN’T ALWAYS BE GUARANTEED TO PERFORM Now, however, the undiminishing desire of people to own these things has helped propel them from merely beautiful objects of desire into a burgeoning asset class – the “investment of passion”. Although there have always been canny experts – and lucky amateurs – making money from their collections, the collapse in value of more traditional investments, such as stocks and shares, during the global financial crisis, saw an increased focus on more tangible assets; things whose value you don’t need a degree in economics to understand. A plethora of funds, some reputable, some decidedly not, were launched to capitalise on this quest for safe-havens. As a fascinated bystander, Knight Frank created its own Luxury Investment Index (KFLII) to track the performance of nine of these investments of passion. Published for the first time in the firm’s Wealth Report 2013 magazine, the results were fascinating. While 10-year growth of 179% for the overall index by the end of 2013 was more than healthy, compared

currently out of vogue and this meant the furniture component of our index delivered a negative return (-19%), despite the rise in demand for trendy twentieth century designers. Changing fashions and trends are one reason that investments of passion can’t always be guaranteed to perform. Pop artist Jeff Koons’ Balloon Dog sold for a staggering $58.4m last year, but will somebody want to pay that much for a large orange dog in 20 years? Time will tell. The headline figures also only tell part of the story. Although the indices we used to compile KFLII are all from respected third parties, they can only represent a limited slice of the market. However much you love your Triumph Stag, its value is unlikely to have grown quite as sharply as the marques most in demand by classic car collectors. Just as it makes sense to buy the house that will make you happiest to live in, investing in objects of desire that stir your soul or lift your mood, not only hopefully just your bank balance, will yield the greatest long-term rewards.

4. WINE

176%

2. ART

193%

3. WATCHES

82%

THE GLOBAL TOP 5 MOST COLLECTED*

1. JEWELLERY & DIAMONDS 176%

5. CLASSIC CARS

456%

*Source: The Wealth Report Attitudes Survey 2014. For more details and to download your copy go to thewealthreport.net

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

DREAM HOME GAME Where would you live if money were no object? Play our dream home game to find the perfect house for you. SPAIN

MIAMI

PREFER THE HUSTLE AND BUSTLE?

MORE WINDOW THAN WALL?

A BEACH OF YOUR OWN?

ATTRACTED TO THE COAST?

MIX COCKTAILS IN YOUR OWN PRIVATE BAR?

BARBADOS

COME DINE WITH ME AND 23 GUESTS?

DO YOU WANT TO SEE THE BIG PICTURE?

SWITZERLAND

STIRRED BY A DRAMATIC SKYLINE?

BRUSSELS

PROPERTY THAT REQUIRES A PASSPORT?

NEW YORK

MAYFAIR

KENNINGTON

CITY VIEWS?

FULLY AUTOMATED?

IRELAND

LIKE THE SOUND OF CLATTERING HOOVES?

START

SPACE AND CLEAN AIR TO BREATHE?

NEED A HANGAR FOR YOUR HELICOPTER?

LONDON CALLING?

SCOTLAND

SPORTY?

GUEST ACCOMMODATION?

OXFORDSHIRE DORSET

PAR EXCELLENCE?

VIEW THE DREAM PROPERTIES Find out more about your chosen residence.

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

LONDON

Mayfair MAYFAIR – PARK LANE

KENNINGTON – THE WATER TOWER

Famed for being one of the most prestigious locations on the Monopoly board, this unique 3 bedroom apartment on Park Lane is one for the tech-savvy, boasting the latest technology and the best in interior design.

An incredible conversion of a listed Venetianstyle water tower, encompassing 5 themed bedrooms, ideal for someone looking for a unique property and panoramic views of London.

Kennington

COUNTRY

Dorset

Oxfordshire

Ireland

Scotland

IRELAND – LYON DEMESNE, COUNTY KILDARE

DORSET – HIGHDON HOUSE

One for horse lovers, with excellent equestrian facilities and 600 acres of land, this elegant Georgian house also boasts 5 estate cottages and its very own lake.

A perfect rural retreat with panoramic views towards the Dorset coastline, with an annexe cottage, tennis courts and swimming pool. This property is ideal for someone who enjoys countryside living.

SCOTLAND – EILEAN RIGH

OXFORDSHIRE – KINGSTON LISLE PARK

For the person who has everything except their own island. A charming farmhouse complete with a boat house, helicopter hangar and private beach, this is one of Scotland’s finest offerings on a stunning coastline.

A spectacular Georgian house and estate, complete with swimming pool, golf course, tennis courts and an excellent shoot, perfect for fans of country pursuits.

INTERNATIONAL

NEW YORK – PUCK PENTHOUSES Six iconic penthouses in the heart of coveted Soho, full of character with soaring vaulted brick ceilings and oversized windows, which frame the sweeping cinematic views of one of the most famous cities in the world. SWITZERLAND – L’ÉGLISE RUSSE Everything you need to be the perfect host with a home cinema, guest accommodation and spacious reception rooms. This apartment is located in one of Geneva’s most prestigious squares, perfect for exploring the city. BRUSSELS

New York Switzerland

A ground floor apartment with incredible ceiling heights of up to 4m. This is an excellent base for exploring Brussels and great for entertaining, with space for 24 to dine. MIAMI Situated between the ocean and the bay, and designed by architect John Pawson, these apartments provide breath-taking views from their floor-to-ceiling windows. BARBADOS An exclusive villa in the Sandy Lane Estate complete with private beach, swimming pool and home theatre; a perfectly serene retreat.

Brussels

Miami

SPAIN – IBIZA Positioned in a dramatic cliff-top location, this 4 bedroom villa with its own bar, is the perfect place to watch some of the island’s beautiful sunsets.

Barbados

Spain

PRIVATE VIEW All of these dream homes were originally featured in Private View magazine. To download your copy visit KnightFrank.com/PrivateView

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

TALKING POINTS From renewable energy to connectivity, we cover the issues that homeowners are talking about in 2014.

WITH THE PROPOSED £2M MANSION TAX THRESHOLD NEARLY ONE IN TEN PROPERTIES DEFINED AS “MANSIONS” WOULD BE ONE AND TWO BEDROOM FLATS

1. RENOVATION BASICS

2. AUTOMATIC GATES

The cost for installation varies depending on the size of the property and the number of windows, however the annual saving is usually £170 or more. If each home in the UK used the best draught proofing, every year we would save £180 million, and enough energy to heat nearly 930,000 homes.

Time should be taken to quiz the contractor because, in many cases, private gates in rural locations need no mandatory upgrading. A simple acknowledgement that features designed to increase safety have been offered but voluntarily declined, can often satisfy contractors’ legal obligations and avoid costly work.

Homeowners planning renovations or building projects will firstly need to consider basic costs such as windows, doors and insulation. Energy efficient double or triple glazing limits draughts and reduces heat loss as well as insulating against outside noise.

Many homeowners have powered gates for security and access control. From time to time these need servicing and maintenance which can lead to contractors recommending significant extra spend on upgrading, to meet apparent new minimum safety standards.

3. GREEN ISSUES

With ever increasing pressure on individuals to reduce their carbon footprints, homeowners should make an effort to implement aspects of sustainable living. If homeowners insulate their homes sufficiently, they will see a reduction in the cost of their energy bills, as well as saving vital resources and contributing to eco-friendly living. Solar panels can also represent an excellent investment as they can generate income and deliver an ongoing free supply of clean electricity. The cost of an average solar panel installation is £6,500 and the average saving is around £160 annually, providing a long term investment for homeowners for their environmental and financial futures.

4. DOMESTIC STAFF LAWS

The government is continuing in its quest to overhaul some areas of employment law that have long been felt by employers to be imbalanced in favour of employees. In April 2012 the maximum period of employment within which an employer can terminate an employee’s contract of employment, with only very limited danger of an unfair dismissal claim, was extended from one year to two years. Since 29th July 2013, employers can theoretically enjoy greater freedom to engage in pre-termination discussions with longer serving employees. Such discussions approached in the correct way will be inadmissible in any future tribunal claims. A new ACAS Code of Practice helps explain the new process.

9. THE RIPPLE EFFECT

Property prices in the prime London and prime country markets fell significantly in the immediate aftermath of the financial crisis, eventually reaching their low points in 2009. However, over the past five years there has been a significant divergence in performance.

5. RURAL PAYMENTS AGENCY INSPECTIONS

Country house owners claiming Single Farm Payment should be mindful of the fact that they could be notified of an inspection by the RPA and given 48 hours within which to provide access for this purpose. Great care should be taken not to be complacent over the eligibility criteria that need to be met to validly claim subsidy and also the minimum standards of land and environmental management that must be demonstrated. Anyone who has had an inspection will vouch for the thoroughness of the process. Landowners who claim subsidy but who allow others to undertake the farming activities should be on particular guard and will need to show evidence that they are ‘bearing the farming risk’ and are ‘in control’ of the land.

6. BROADBAND SPEED

Broadband speed can be an issue for anyone living in a rural setting, particularly in the age of communication when being online is so essential to everyday life. It is important for homeowners to consider signal strength before choosing their internet provider; many companies and comparison websites will offer an online service to allow customers to check before committing to a contract. Homeowners should be aware of the length and quality of the phone wiring extensions in their home and consider fibre optic broadband for larger homes as it uses a special data extension kit rather than existing phone extensions. Signal boosters are also an option for homes with poor connections; they work by bouncing the signal over a greater distance and are available from electrical retailers.

7. RISING ENERGY COSTS

Help is at hand in the form of the long awaited announcement of the Renewable Heat Incentive (RHI) for domestic premises. RHI has been available to commercial properties for some time, but from Spring 2014, houses producing heat from ground and air source heat pumps, biomass boilers and other similar technologies can apply for payments of between 7 – 19 pence per kwh of heat energy they generate each year for 7 years.

8. GAINING PLANNING PERMISSION

Planning permission is vital for new builds, extending a property or changing the purpose of a building. Buyers should be mindful of the age of the property and whether any major changes are required. Listed Building Consent is also obligatory for any structural changes being made to listed properties. This service is free, and although planning permission is not overly costly, local authorities can take up to 13 weeks to make a decision on a proposal so it is important to consider the cost of delays and it is advisable to make enquiries before building work begins.

While prices in prime central London now sit 68% higher than their market low, in the regions there was a different picture with values fluctuating until the end of 2012. The turning point in the country house market happened in early 2013 and, as the UK economy improved, we began to see confidence in the housing market ripple out from central London. Prices for prime country houses have now been rising for five consecutive quarters and are 4.5% higher on an annual basis in the year to the end of March 2014. Much of this growth has been concentrated in a mix of prime urban locations across the country with the property markets in the Home Counties, Sevenoaks, Winchester, Bristol, Bath and Oxford leading the way. These locations are benefitting from a flow of wealth from London as buyers, who previously didn’t have the confidence in the housing market outside the capital, move out. They are now seeing the early signs of recovery and are taking advantage of the wide price gap between London and the rest of the country before prices start to play catch-up. The gap between the price of homes in central London and the country is at its widest in several decades. As the UK economy continues to recover and the job market picks up, we expect more Londoners will make the move out to the regions. We are forecasting further price growth in the prime country market in the coming year, as improved economic conditions and confidence feed in. Property markets in South East England will continue to be boosted by the “ripple effect” of London prices, as well as continued interest from buyers in towns within easy commuting distance of the capital.

To keep updated on all our latest research and market insight, sign up to My Knight Frank via KnightFrank.co.uk

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

THE HONEST ANSWER

LONDON ATTRACTS BUYERS FROM ALL OVER THE WORLD FOR THE LIFESTYLE IT OFFERS

We surveyed our clients to find out the questions they wanted to ask.

YOU NEED AN AGENT THAT HAS A GOOD TRACK RECORD OF SELLING OR LETTING PROPERTIES LIKE YOURS IN YOUR AREA

I’VE BEEN GIVEN A RANGE OF VALUES FOR MY PROPERTY – WHY WOULDN’T I GO WITH THE HIGHEST PRICE? No-one has the monopoly on correct pricing, but beware the agent that comes in with a high price to win your instruction. Having to reduce it once you’ve been on the market for a while means you’ve missed out on the initial flurry of interest that can help you get the very best price.

LONDON PRICES ARE STILL GOING UP – IS IT SUSTAINABLE?

CAN’T I JUST MARKET MY PROPERTY MYSELF THROUGH A PORTAL?

We get asked this a lot, and we believe the price rises are sustainable for a couple of good reasons. One, London attracts buyers from all over the world for the lifestyle it offers and the security of investment. Two, supply is limited – London’s best postcodes aren’t getting any bigger. Put the two together and you get the perfect conditions for a longterm rising market.

You can, but you need to go into the process with your eyes wide open. You’ll not only have to make time to vet potential buyers and host viewings, but the all-important negotiation process will also be down to you. If it’s your property, it can be difficult to be objective and an agent can be a useful buffer between you and your buyer, giving you a better chance of getting the deal you want.

SHOULD I DO SOME WORK TO MY PROPERTY BEFORE I PUT IT ON THE MARKET? It’s a cliché, but first impressions count. A new coat of paint and de-cluttering inside will give a cleaner, more open feel to your property – this will all help your property to stick in the viewer’s mind. You may be surprised at the number of people who decide whether or not to view based on the appearance of the front door, so a little time invested up front can pay real dividends later on.

BE CONFIDENT THAT YOUR AGENT IS ABLE TO FIND THE RIGHT BUYER FOR YOUR HOME

A NEW COAT OF PAINT, TIDYING UP THE GARDEN, DE-CLUTTERING INSIDE...WILL ALL HELP YOUR PROPERTY TO STICK IN THE VIEWER’S MIND

A LITTLE TIME INVESTED UP FRONT CAN PAY REAL DIVIDENDS LATER ON

SO WHAT DIFFERENTIATES ONE AGENT FROM ANOTHER? The one-word answer is people. You want an agent that has a lot of experience and understands the considerable ins and outs of selling. It is also important to be confident that your agent is able to find the right buyer for your home. Are they up to speed with how people go about finding property in 2014, and will they ensure that your most valuable asset is marketed through the right channels? Whatever they offer, you need to be sure they have all the bases covered.

WHAT DOES MY FEE PAY FOR? Experience, local knowledge and, hopefully, someone you’ll enjoy working with as you look for your buyer or tenant. Whoever you choose, you need an agent that has a good track record of selling or letting properties like yours in your area, so don’t be afraid to put them on the spot – ask them about their experience and for details of recent transactions.

DO YOU REALLY KNOW THE VALUE OF MY HOUSE?

WHY DO THE FEES DIFFER FROM AGENT TO AGENT? It’s like most things in life – you get what you pay for. So although one agent might be charging an extra 0.5% than the next, they could repay that many times over when they put their experience to work in negotiating a better price for your property.

If you have a question that you’d like answered, please send it to us at answers@knightfrank.com

Yes. There’s no magic formula, but experience and local knowledge means that it is possible to know what’s achievable for any given property on a patch. Part of this is down to in-depth research and the rest is down to how long an agent has been working in that area.

Or see other questions being discussed by our agents at KnightFrank.co.uk/answers

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

THE WORLD IS NOT ENOUGH As investment in space travel rockets, Liam Bailey, Head of Knight Frank Research, considers the implications for prime residential property markets.

irgin Galactic’s increasingly assured sub-orbital test flights are one of the most obvious manifestations of the new wave of activity in space. Talking to Knight Frank, entrepreneur Richard Branson said: “New commercial space will be one of the most exciting investment sectors in the next 20 years, driven by the initial successes of companies like Virgin Galactic. There is already some good evidence that the leading players are receiving high levels of interest from the mainstream investment community and attracting valuations that reflect confidence in future growth and opportunity.” REDUCED GLOBAL TRAVEL TIMES Although sub-orbital trips for wealthy tourists will keep Virgin Galactic busy in the short term, Mr Branson says the next step for the technology will be to slash travel times around the world. “I’m very excited about a future version of our current spaceship which will make transcontinental travel clean and fast – London to Sydney in a couple of hours with minimal environmental impact.” Travelling outside the Earth’s atmosphere, gravitational forces will allow spacecraft to travel at over 4,000 miles per hour, so breakfast in Mayfair could easily be followed by lunch overlooking Sydney Opera House. It doesn’t take much imagination to see the dramatic impact this innovation could have on global luxury property markets.

IMPLICATIONS FOR SECOND HOMES Ticket price will be critical. If this is a technology for billionaires only, then market disruption might be limited to a wider choice of global lunch options. But if the price drops to allow the merely very wealthy to access sub-orbital flights, then we have to reconsider everything. Take second homes in Europe. Right now, demand is mainly restricted to European investors, who try to limit their travel to less than two hours. In future, that same time limit could allow Chinese or Indian investors to pop over for the weekend to visit their Tuscan farmhouse. New York may well gain ground from London, but that is in relative terms. As all the global hubs become dramatically more accessible, the criteria for choosing a second home become more about the location itself, and much less about the convenience of travel. Expect more property demand, more development, more travel and, as a result, more people searching for really private escapes. Maybe it’s time to invest in that South Pacific island you’ve had your eye on. Assuming it can accommodate a runway and a space port, a James Bond villain-esque hideaway will soon be convenient for, well, just about everyone.

As our Global Cities Survey confirms, right now London wins over New York as a global wealth hub, in part because London is more convenient for African, Middle Eastern, Russian and European Ultra High Net Worth Individuals (UHNWIs). But within a decade, this convenience premium could be noticeably reduced if Mr Branson succeeds in making his vision a reality.

IT DOESN’T TAKE MUCH IMAGINATION TO SEE THE DRAMATIC IMPACT THIS INNOVATION COULD HAVE ON GLOBAL LUXURY PROPERTY MARKETS 16

DOWN TO BUSINESS But it’s not just the travel industry that is going galactic. Behind the telegenic images of Virgin Galactic’s SpaceShipTwo is a burgeoning industry investigating the commercial possibilities of space. SPACE RESOURCES Mining asteroids for precious metals and rare minerals might be an activity confined to computer games for now, but two companies – Planetary Resources and Deep Space Industries – are taking the prospect very seriously. Even the public sector has been prompted to consider the potential, with NASA’s recent launch of its Robotic Asteroid Prospector project. Planetary Resources, backed in part by Google’s Larry Page and Eric Schmidt, is planning on launching a dedicated telescope into space as early as next year in order to get a better understanding of targeted asteroids. While eyebrows have been raised in scientific circles regarding the economic viability of asteroid mining, the potential rewards appear compelling, if the significant technological challenges can be overcome. To whet your appetite we have published a list of “asteroids to watch” at thewealthreport.net, confirming the potential value of the key space rocks that will be coming (relatively) close to Earth soon.

BREAKFAST IN MAYFAIR COULD EASILY BE FOLLOWED BY LUNCH OVERLOOKING SYDNEY OPERA HOUSE

Assuming you are keen to get involved, make sure you have a good legal team. If other miners join you on your target asteroid you will find existing property law is slightly vague about settling ownership disputes in space. PUBLIC OFFERING However, the more immediate impact of this new extra-terrestrial investment is likely to be felt rather closer to home. While Richard Branson is currently focused on his Virgin Galactic spaceship, which will make him and his children astronauts later this year, he is also thinking about other applications for his space investment. “I believe our small satellite launch plans could radically improve life on Earth, maybe by enabling space-based solar power stations or providing cheap internet and phone coverage.” “Virgin Galactic may well become the most valuable company we have ever launched. There’s a chance we’ll take it public, enabling investors large and small to join the ride. Watch this space.”

The World is Not Enough, originally featured in The Wealth Report 2014. To download your copy, visit thewealthreport.net

Sold in the past 18 months

EVERYTHING WE DO

AT THE HEART OF

So far in Property Intelligence we have avoided talking about ourselves and focused on content that was useful, interesting or fun. For that reason, we hope you won’t mind us taking a couple of pages to tell you about some of the things we’ve done in the past 18 months.

3,855

homes

4,253

farms

402

orchards

PROFESSIONALISM

ABOUT US

THAT IS UNRIVALLED

TEAMWORK

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

houses with swimming pools

Power Station

200 houses with tennis courts

cups of tea, kindly made for our agents

Over

2,409 1,000 homes Let

51,934

active buyers joined our database

DRIVEN TO GO THE

TO EXCEED OUR CLIENTS’ EXPECTATIONS

1,388,189 sq ft of office space let 18

mortgages arranged via Knight Frank Finance

Car breakdown on the way to a viewing

EXTRA MILE

office space being marketed in the

310

metre Shard

£7.75 BILLION investment advised on

cinemas acquired off market

Over

335

countries

offices

www.knightfrank.com

A property search in

Over

12,000

employees

languages

Over

5,139

well-read publications distributed

press mentions

awards for excellence

6,364,737 web visits

2,000 tweets

TRUST & INTEGRITY AT EVERY LEVEL renewable energy installations

acres of land managed

RESIDENTIAL DEVELOPMENTS Ian Marris +44 20 7861 5404

CONSULTANCY SERVICES James Thompson +44 20 7861 1075

RENTING, LETTING AND PROPERTY MANAGEMENT

£500MILLION

Tim Hyatt +44 20 7861 5044

of rural property valued

846

KNIGHT FRANK’S PROPERTY SEARCH SERVICE Philip Selway +44 20 7591 2647 FINANCING AND MORTGAGES Simon Gammon +44 20 7268 2581

films made

281,380 30

UK PROPERTY OUTSIDE OF LONDON Rupert Sweeting +44 20 7861 1078

PROPERTY OUTSIDE OF THE UK Paddy Dring +44 20 7861 1061

Over

app downloads

PROPERTY IN CENTRAL LONDON Noel Flint +44 20 7861 5020

UK FARMS AND ESTATES Clive Hopkins +44 20 7861 1064

Interview with Boris Johnson

47,161

BUYING & SELLING RESIDENTIAL PROPERTY

people advised on HS2

COUNTRY HOUSE CONSULTANCY Angus Harley +44 1488 688511

LARGEST

INDEPENDENT PROPERTY CONSULTANCY IN THE WORLD

£103,000

raised at our Day of Giving for charity Knight Frank experts spoke at

of our employees cycled from London to Cannes for charity

seminars

duck race sponsored 19