PROPERTY NEWS Zoe Dare Hall

The race is on

There’s a window of opportunity before overseas buyers return, writes Zoe Dare Hall

Now that double-jabbed travellers from the US and Europe can visit the UK without having to quarantine, central London agents are preparing for a gear change in the market.

“Quarantine has been a real put-off for those who don’t just want to buy a property in London – they want to come and enjoy all the city has to offer. We’re not seeing a sudden tidal wave just yet, but it will happen shortly,” predicts Stuart Bailey, Knight Frank’s head of prime London sales. Until then, there is a limited window of opportunity for those to “beat the competition before they get here” says Bailey. The past year’s race for space has seen many families flee to the countryside, or to large houses in outer prime areas of London, leaving relative bargains in prime central London.

Belgravia saw an 8.3 per cent drop in flat prices in the first six months of the year. South Kensington’s fell by 7.6 per cent and the City and Aldgate by 10 per cent. But the best “bargain” is Knightsbridge, where average per sq ft prices are £1,546, 11 per cent below the five-year average, according to Knight Frank.

London-based buyers have been quick to seize opportunities in the first half of 2021. Knight Frank reports that Knightsbridge’s 158 flat sales during this time is the highest number in five years. “It’s the strategy of buying what the competition wants before they can get here,” says Bailey.

And demand for “country house-style living in London” has led to the strongest first half of a year in London’s £5m-plus market since 2014, when there was a rush to beat the new stamp duty rates, say Savills. Chelsea and Kensington saw the most sales, with 14 per cent and 13 per cent respectively, and houses with six or more bedrooms in these areas have seen annual price growth of 8.2-9 per cent. “It’s the only segment of the London market to match the prime country market for price growth,” says Savills’ research analyst Frances Clacy. Big houses with gardens in Notting Hill are flying off the shelves, and Aston Chase reports £200m of sales in St John’s Wood – one of Westminster borough’s lowest build density areas – in the year to May 2021, equating to 30 deals with an average price of £6.6m.

But a different type of investor is taking a tangential look at what’s hot – and settling for what’s not. “They are thinking that the market is at a low ebb after five years of downward pricing and they’re looking at what people don’t want at the moment,” says Bailey. “What’s not fashionable is a really well-located Knightsbridge flat with no outside space, so they’re buying smaller and super-central. Once the competition arrives from overseas, they’ll eat up that kind of stock and it won’t become available again for a long time, as they rarely need to sell in order to buy.”

Time is running out, though, as the Americans are already on their way. James Hyman, Cluttons’ head of sales, recently tied up a super-prime let – a £5,000-a-week house on a garden square in Kensington - to a New York family. “This is the first big corporate let we have done since pre-pandemic. It’s the return of the corporate market,” he comments.

And buyers from New York, Chicago and Austin, Texas are contributing to Americans being Sotheby’s International Realty’s second largest audience after UKbased buyers. “The main driving factor is getting into the best schools and colleges,” comments Shereen Malik-Akhtar.

Americans love the easy access to Europe from a London base, says Simon Barry, head of new developments at Harrods Estates, “and Brexit has done nothing to impact that”. He’s also seeing European buyers looking to capitalise on London’s “recovery potential”.

There are property opportunities for sure – but as the summer fades, that window won’t stay open for much longer. L 158 KNIGHTSBRIDGE FLAT SALES IN THE FIRST HALF OF 2021

BEAT THE COMPETITION Above: Prices of flats in London’s most luxurious postcodes such as Knightsbridge and Belgravia have dropped, making it a good time to purchase before the return of overseas buyers. A charming maisonette on Motcomb Street is for sale at £3.475m through Harrods Estates