Three reasons to make a move in the prime property market
Against the odds, the housing market has seen a remarkable recovery since it reopened in mid-May after being put on pause by coronavirus.
Sales are being fueled by a combination of three main factors, according to Trevor Kearney, a founding member of Savills Sports & Entertainment, the tailor-made service launched for clients by the international real estate firm four years ago.
“In our prime country house market – and by prime I mean roughly the top five to ten per cent of homes by value – we are currently seeing three potential buyers for every property and, on average, are achieving just shy of the guide price”.
“Some of this is because of pent-up demand, but the experience of lockdown has also prompted many people to take a long, hard look at how and where they want to live. There’s been a surge in the sale of £1m+ homes as people search for more space. And when you add in the savings to be had at the moment because of the stamp duty holiday, there’s a powerful incentive to move,” he explains.
What’s happening in the prime property markets?
Savills analysis shows the performance of central London’s most exclusive postcodes has been surprisingly robust, particularly given that international arrivals into the UK are at a fraction of normal levels due to the pandemic. So, for example, in the first three quarters of 2020, despite the long weeks lost to lockdown, there were 12 per cent more £5m+ sales across London than in the same period of 2019.
“What this highlights is that central London has retained its status as a desirable location for the world’s wealthy buyers,” adds Kearney who works closely with Savills international desks.
“As you head out of London, the property market is seeing the impact that lockdown has had on people’s attitudes to their homes and where they want to live. Although there is still demand for city centres, we are finding many buyers are looking for a more rural lifestyle and opportunities to reassess their work-life balance. They are keen to live somewhere with more room, both inside and out, as well as easy access to green space and the countryside.. “This isn’t just about moving away from London, it’s a general trend.
For example, we also expect to see buyers who in the past would have been interested in a high spec modern apartment in Manchester opt for a larger home in, say, Wilmslow or Alderley Edge instead. Or it may well be they will want a foot in both camps – with a smaller city base and a more spacious house elsewhere. For those who love city living and wouldn’t be anywhere else, homes with gardens or that are close to parks and open spaces are in demand as are developments with private terraces and top quality amenities.”
Is now a good time to buy?
Savills latest five year forecasts for prime property outside London show average house price growth of three per cent in 2020 with two per cent expected next year, followed by annual growth of four per cent, six per cent and then two per cent again in 2024. For prime London overall, Savills anticipates one per cent house price growth this year, rising to three per cent in 2021, then five, four and two per cent growth in subsequent years.
A key element in play in the current market is the cost of borrowing, Kearney continues. “Many younger buyers may find it hard to believe that interest rates have hit double figures in the past. Currently rates are very low which makes borrowing cheap”.
“If you’re looking for a luxurious, forever, family home with plenty of space and privacy, as well as all the ‘toys’, or something for the shorter-term, there’s a wide range of possibilities out there”.
“And it’s well worth also considering the potential of buy-to-let as an investment. The private rented sector is growing and demand from tenants is strong, meaning owning a portfolio of rental property could be a smart decision. But as with all things, it’s important to get the right advice because returns on your investment will vary depending on where and what you buy.”
When it comes to timing, another important point to consider is the stamp duty holiday which lasts until the end of March 2021. The price threshold at which buyers start to pay stamp duty is now £500,000, up from £125,000. Buyers still have to pay stamp duty on properties above half a million pounds, but the cost will be £15,000 less than it would otherwise have been. That brings the stamp duty bill for a £1m home down from £43,750 to £28,750, a saving of around a third.
“Bear in mind though that the window to take advantage is getting tight so it’s important to act quickly if you want to benefit. The sums are different if you are buying as a second home or as an investment, so, again, make sure you get advice on the figures,” says Kearney.
The need for privacy
For sports stars, celebrities and all buyers and sellers in the public eye, privacy is of the utmost importance. Kearney again: “We know that our clients not only want privacy when it comes to where they choose to live, they also need discretion while they are searching for the right house as well as during the sales process itself which is something we take very seriously indeed.”
Kearney’s Instagram account, @SuperPrimeSurrey, now has 61.8 thousand followers and alongside other channels is a key means of communication with existing and potential clients. “Instagram doesn’t just suit people’s busy lifestyles, it’s also important because when a client wants to contact me it’s a way of getting straight through – understandably, some people don’t like the idea that someone else may pick up the phone or that they may be asked to leave a message.
“By the time we meet in person, we’ve already built up a rapport and I have a very good sense of what they are looking for and how they want to proceed depending on where they are in their careers and the demands they face.”
From fabulous mansions and rural retreats set in extensive grounds, to cosy boltholes and luxury apartments, Savills has a wide variety of prime property on offer up and down the country as well as overseas. For an introduction to Trevor and the Savills, Sport and Entertainment team for more information about what’s available, or for more general advice on the market and plans to buy, sell or rent, contact us on:
07584320518 | [email protected]