Partner in residential sales, Richard Barber, said that the market is complex and multi faceted, and he is seeing prices levelling off in this price sector which is dominated by houses arranged over five to six floors.
‘The house market rarely offers the lateral space and security so attractive to the overseas buyer and, as a consequence, must rely upon the more cash strapped domestic, city based buyer. Fears of a Liberal and Labour alliance over a mansion tax and lack of affordability from the traditional British and European house buyer mean lower levels of transactions in this market,’ he explained.
For example, the firm’s records show that there have been a total of 282 house sales in Chelsea, Belgravia, Knightsbridge, South Kensington, and Kensington, and 242 flat sales in the price range between £2 million and £15 million since January this year. In contrast, there have been 691 flat sales in the same area and in the same time period under £2 million.
‘One must conclude from these figures that transaction levels above £2 million are particularly low. Of course, there are always caveats when looking at London property and anything deemed a one off rarity is likely to sell well despite being above £5 million,’ he pointed out.
An example of this is the former studio of Charles Rennie Mackintosh, acclaimed architect and designer at the forefront of the Art Nouveau movement. The house, in Glebe Place, Chelsea with three magnificent studios and principally arranged over only two floors, has been sold for what the firm believes to be a record figure for a house in this condition at £3,200 per square foot.
The firm has also achieved record prices of £2,643 per square foot and £2,590 per square foot for a house in Trevor Square, and a ground and lower ground floor maisonette in Ennismore Gardens respectively.
In the lettings market the firm has seen a significant level of activity in the last six weeks and is currently breaking all previous records for weekly tenancy completions and under offer pipelines.
‘As a result of such high demand, particularly from high net worth international students, stock levels have reduced by as much as 25% in some areas of central London. The majority of our studios and one bedroom flats have now mostly let to students, who were bidding against each other. The family house market has also been strong, with 26 lets over the past month alone,’ said Lucy Morton, senior partner and head of lettings at W.A. Ellis.
‘We are seeing more coming to the market, though, and have some outstanding super prime properties coming on to the market in October including seven prestigious new build apartments in the heart of Knightsbridge, as well as a new development of three apartments and four town houses in Connaught Place. Landlords are quickly realising the benefits of presenting their properties in first class condition, and many of our clients are now putting capital into their investments in order to achieve the optimum rent,’ explained Morton.
She pointed out that with the firm’s average tenancy is now exceeding three years and she believe the market will benefit from the UK government’s proposed tenants' charter, which is focusing on longer fixed term tenancies and raising standards.
‘We believe it is a positive step towards greater regulation and transparency in the lettings industry. Interestingly, though, we find that it is the landlord who will commit to a longer term and the tenant who wants the flexibility of a break clause after six months. Another important point when it comes to long term tenancy agreements is that mortgage companies will often only give consent to a landlord to grant a tenancy of one year only,’ she added.
