Few places can claim to hold more eclectic charm than London. Even those who have lived in the capital for years and bemoan its transport delays, soaring house prices and drizzling weather, could never imagine living anywhere else. And it’s not hard to see why.
With a different show opening every night, more than 300 languages floating through the city air, and somewhere ready to cure your craving for any and all cuisine, 24 hours a day — in the words of Samuel Johnson, “when a man is tired of London, he is tired of life.”
With this in mind, we called upon friends at leading luxury real estate agency, Knight Frank, to give us their insider’s insight on everything from the effects of Brexit, to where in the capital you should to be staking your own proprietary claim in 2019.
Weathering the Brexit storm…
As you may have read in our round-up of the things we learned from the Knight Frank Wealth Report, London has is home to more UHNWIs than any other city in the world. To qualify for this 5-letter group, you need an 8-figure bank balance. Over $30 million in the coffer.
"The capital has defied the pundits before, and it is doing so again..."
And, this contingent of London’s wealthier population have helped to keep the capital’s property market afloat in turbulent times. As James Roberts, the Chief Economist at Knight Frank, puts it, “the vote to leave the EU in 2016 prompted a fresh wave of prophecies that London would go into decline as a global city. But the capital has defied the pundits before, and evidence is mounting that it is doing so again.”
Your postcode is about to become less important…
Historically it might have been one of the key indicators that you’d chosen a well-respected spot, but according to Tom Bill — Head of Knight Frank’s London Residential Research — your postcode in the capital might not hold the same weight as it once did. “The quality of some new-build developments in London has made it more difficult to generalise about how prices in certain areas will perform,” he explains.
“Demand has become less postcode-specific as buyers increasingly look for the sort of high-quality properties and amenities that developers are building in formerly peripheral areas. In broad terms, affordability constraints have pushed demand further east and south-east which, along with large-scale infrastructure projects, will boost demand in years to come.”
But demand for the traditional hotspots isn’t going anywhere...
According to Tom Bill, this shifting emphasis on postcode hasn’t stopped the traditional prime London markets benefiting from the fact that prices have adjusted to higher levels of stamp duty.
He explains, “while the current political uncertainty means transaction levels have slowed, buyers are registering in greater numbers because they can see good value and want to be in a position to trade when clarity returns. This pent-up demand will benefit London markets more heavily driven by needs-based buyers moving for family or work reasons.”
Increased diversification is good news…
According to Roberts, industries that previously depended on finance for work have now expanded to serve the information and communication sector.
“This has both spurred growth and diversified income streams,” he explains, “and the recent arrival of more scientific jobs in the capital, from King’s Cross to Stratford, will add further variety to the economy. Diversity will leave London stronger and safer when facing future downturns.”
“Demand has become less postcode-specific..."
He cautions that a hard Brexit would undoubtedly mean bad news, although more so for the major manufacturing districts, which are largely found outside London. “The government has said that after a hard Brexit it would reduce the tax and regulatory burden on businesses in order to attract investment — this would lessen the negative consequences for London, with its services-oriented economy,” he concludes.
Overall, the experts over at Knight Frank are looking to the capital’s real estate future with an undeniable sense of optimism. As their Head of London Offices, William Beardmore-Gray puts it: “a decade of change lies ahead for London, a city that has been proven to thrive on the opportunities created by transformation”.
Looking for more expert insights? Take a look at what we learned from the Knight Frank Wealth Report…