FUTUREPROOF? Wherever we’re at now, the London property market looks impressive in the longterm, says Duncan Farmer
W
hatever the Brexit outcome London will remain the leading global wealth centre and retake the top spot on the City Wealth Index. Those are the reassuring words of Knight Frank and are among the headlines of its 2019 Wealth Report. Liam Bailey, its global head of research, says: “With the world’s largest high net worth population, the city sweeps the board in our annual City Wealth Index, pushing its only serious rival, New York, into second place.” Although the figures show that last year the value of prime central London property was not the best thing to buy for a short-term gain, it obviously did well over longer periods. The Knight Frank report grabbed headlines for its more eye-catchingly luxurious investment snippets, from art to whisky and cars. Portrait of an Artist (Pool with Two Figures) by David Hockney, sold by Christie’s for $90 million, making it the most expensive work by a living artist. A bottle of The Macallan 1926, hand-painted by Michael Dillon, sold by Christies for $1.5 million, making it the most expensive bottle of whisky ever sold. The Marie Antoinette pearl pendant was sold by Sotheby’s for $36 million and a 1970 Rolex Daytona “Unicorn” was sold by Phillips with Bacs & Russo for $5.9 million. In the world of cars a 1962 Ferrari 250 GTO was sold by RM Sotheby’s for $48.4 million. And in wine a bottle of 1945 Romanée-Conti was sold by Sotheby’s for $558,000 and was the most expensive bottle of wine sold at auction. Although it was whisky that produced the most startling returns over 12 months few investors will have made money for two reasons: it is pretty to hard to know which bottles will rise most and, according to a study of old malts last year, a lot of old Scotch is newer than it claims and the market is full of fakes. The London property market may move more slowly and have the odd bad year, but its long-term record is so impressive that banks and building societies are happy to lend on it: and you can’t say that for whisky and wine.
A
former member of the Bank of England’s monetary policy committee has said that interest rates could fall below zero to save the economy from disaster in the event of a chaotic Brexit. David Blanchflower told the Press Association that the Bank may be left with little option but to take rates into negative territory for the first time in history. That would mean that commercial banks have to pay the Bank of England money to hold cash deposits with it and that would give them more incentive to lend to businesses and private borrowers. Although mortgage rates would probably fall under such a scenario, they would not go negative and although it may sound like good news the rest of the economy would have to be in serious trouble for such steps to be taken.
Variable Rates APR
Max. LTV
HLC
ERC
Product Fee
Exit Fee
Notes
Tracker over base until 4.24% 30/06/2021
3.8%
60%
n/a
1.3% / 0.8% until 30/06/2021 10% overpayments p.a. without penalty
£999
-
Mx £1m Purchase Only
Tracker over base until 5.69% 31/05/2021
4.8%
75%
n/a
None
£999
Accord Mortgages (Via Tracker over base until 1.99% 4.99% Intermediaries Only) 31/08/2021
4.8%
90%
n/a
None
£995
-
Mx £500k Free Valuation.
2.0%
50%
n/a
None
£999 Product Fee
£125
Mx £2m. Free Valuation. Free legals for remortgages.
Lender
Rate
Halifax
1.34%
Leeds BS
1.38%
Coventry BS
1.95%
Until
Variable rate for term (not linked to Base Rate)
Rev. Rate
n/a
Mx £1m. Free valuation. Free Legals for remortgages
55 Money.indd 3
21/03/2019 10:55