What was happening to the London market in March 2017? We discuss the state of the market, new developments, anti-money laundering and future predictions for the remainder of the year in Episode 5 of our LonRes & Co.
Our 5th episode of LonRes & Co features guest Mark Pollack, Founding Director of Aston Chase, who shares his experiences of the London property market. With new shorts on the housing market (as at March 2017), new developments and all-important anti-money laundering. Click here and watch now.
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Marcus, LonRes: Welcome to our latest LonRes and Company. Taking a look at the latest LonRes figures suggests activity in the central London sales market is starting to increase. The 1dt quarter last year was busier than normal, due to the introduction of the 3% stamp duty levy in April. But even so, our latest UO data suggests in PCL volumes this year are within 7% of 2016 levels. It is a little early to call, but it certainly points to some more positive news for the central London market over the coming months.
Today we are joined by Mark Pollack – founding partner at Aston Chase to discuss his views on the health of the prime market.
Mark, our figures seem to be showing a pickup in activity. How’s your market faired this year?
Mark, Aston Chase: Pretty good, actually. Much to our surprise after a tough last quarter, there’s been quite good activity really across all price levels.
Marcus, LonRes: Are there any particular areas that seem to be doing better than others?
Mark, Aston Chase: It’s actually quite across the board. We’ve found that from new home developments, from one bedroom flats, from half a million pound upwards, right through to super prime, which prior to this year, actually has been really struggling, as you know, with acute shortage in the number of [or the quantity of] transactions.
Marcus, LonRes: Can you tell us a bit about the demand for luxury new developments in central London?
Mark, Aston Chase: The new build sector obviously has always appealed to international buyers, who are attracted to the security afforded by such schemes in the fact that those properties can easily be locked up and left. I think that with the quality of new builds across central London and the amenities that they’re offering, such as can range from swimming pools, gymnasiums, office suites, and so on and so forth, have made them that much more attractive, as well to domestic buyers who are finding they are getting a lot of the amenities they might ordinarily have to find in a super prime property, house, in lateral space, so it’s a dual market; [of] both domestic and international buyers now.
Marcus, LonRes: Fantastic. And are there any particular schemes that you’re involved in that are selling particularly well at the moment?
Mark, Aston Chase: A number of the developments we’re handling are going quite well. In particular this year we’ve sold four apartments in The Park Crescent, which is a development by Amazon property, that we’re handling jointly with Knight Frank. The Park Crescent is London’s only royal crescent, at the foot of Portland Place, effectively overlooking the Crescent Gardens and Regent’s Park beyond. We’ve sold four apartments there at a blended price of about £2,500 a foot. I think that’s done particularly well because each apartment is interior designed by separate leading interior designers, fully furnished. So it’s given buyers an opportunity, effectively, for instant gratification, a seamless move and, although there are some other interesting developments online in Marylebone, there’s very little stock that is actually ready for immediate occupation. In other cases, people are buying off-plan and I think the fact that the Park Crescent is ready to go has been very attractive to people.
Marcus, LonRes: Fantastic. I know there’s been some changes recently to laws on AML. Has that had any impact on your market?
Mark, Aston Chase: Yeah, I mean the money laundering regulations have had an impact. I mean ultimately it’s a positive development, obviously, but I think what happened historically was [that] every now and then there would be a transaction, or transactions would take place, that seemed to kind of buck the trend and created something of an anomaly in the market. And as a result of that, vendors would maybe realign their expectations, reflecting perhaps an unrealistically high price that had been achieved and that can really kind of be quite destructive in terms of future level of transactions thereafter. So the fact that that whole area has been tightened up I think is a good thing for a multitude of reasons. But it has nonetheless had an impact on the top-end of the market, where inevitably some buyers, who seemingly were approved by their lawyers, but nonetheless were willing to pay the very frothy prices on certain properties.
Marcus, LonRes: And terms of the rest of 2017, I know it’s tricky to sort of crystal-ball gaze, but how do you see the market fairing for the rest of the year?
Mark, Aston Chase: Difficult to predict, but as things stand I would say that if it continues in its current vein, looking quite promising. I think, you know as we mentioned earlier in our conversation, there was definitely a reduction in the volume of transactions across all price ranges in London last year, and I think as a result of that there’s quite significant pent up demand. So I think that we are going to have a better year than 2016. I think that Brexit is still going to have an impact – Soft-Brexit, Hard-Brexit, we don’t know. But do I think that people have come to terms with the fact that life continues after Brexit, and whilst people are still very disillusioned with the level of SDLT, nevertheless I think they are also coming to terms with the new terrain, you know- that’s how it is, and if they want to make a move, they just gotta accept it and get on with life. So, I think all-on-all, I’m feeling mildly encouraged. But, you know as we sit here now, there’s been a tragic incident, as you know, at Westminster, and things like that, equity markets and all of those things kind of removed from the domestic market can have quite a significant impact on sentiment and sentiment affects the market. So I think it’s premature for us to think that it’s going to revert to the same levels that we were at, but I think, encouraging signs.
Marcus, LonRes: Fantastic, thanks so much Mark.
Mark, Aston Chase: Pleasure, thank you.
Marcus, LonRes: At LonRes we have some exciting new developments in the coming weeks. Keep an eye on LonRes.com for all the latest news. Thanks for watching
Want more? Tune into the next episode, where we catch up with Laurence Glynne, Founder of central London estate agents: LDG, to discuss his views on the West End market.