In depth: The secret way to luxury London

Buyers’ agents in London offer luxury investors bespoke access to a prime market that’s full of potential, but notoriously covert when it comes to identifying the best properties and making a timely, successful offer.
by Jules Kay

Although London is something of a shining light in what is an increasingly murky global property investment landscape, buying top end properties in the UK capital can still be a serious challenge. Not only is the market currently suffering from low levels of supply, meaning competition for the best properties is fierce, but much of the stock available never actually hits the open market. This makes it increasingly difficult for both domestic and overseas buyers to find the right property whether looking for a permanent luxury home or a smart investment purchase. Nevertheless, London remains one of the safest and most desirable places to buy high-end property with a healthy prime market that is defying the wider UK market and even bucking global trends.

Special agents
With so many elements in the London property market conspicuously under the average investor’s radar, buyers’ agents offer an invaluable service and their help and advice has rarely been so widely sought at the prime level. An ability to offer impartial advice and cut through the mixed messages relayed by the media, combined with expert negotiation skills and perhaps most importantly an ability to access properties that are marketed privately, makes these small, private firms an increasingly popular choice for many overseas luxury investors. Time poor, cash rich individuals are not often in a position to build the relationships necessary with estate agents to ensure first access to properties hitting the market, or crucially, to be made aware of those that don’t even get to that point. “Agents register hundreds of buyers every week, so how can they know which are the serious ones and how can they keep in regular touch with all of them?” aks Simon Barnes of prime London search agency Simon Barnes Property Consultants. “Instructing a buying agent to advise you shows a serious, considered commitment to buying a property, which gives strength and credibility to any offer put on the table. If an agent can sell a house by making one call, he often won’t bother making two – as such, buying agents are also the first port of call for many estate agents.”

Camilla Dell, managing partner of one of London’s leading independent buying agencies, Black Brick Property Solutions, agrees. “In such a competitive market that strong relationships with estate agents essential and because estate agents know us, and know that we represent clients who are committed to buying and can move quickly, we are often the first to hear about properties before they come onto the open market. I would say on average 25 per cent of the properties we acquire each year never appear on a website or in an estate agent’s window.”

 

Inside information
For international investors with little or no knowledge of the London market, the advantage of using a buyers’ agent goes even further. The best firms have extensive local knowledge that is essential for a thorough property search. They provide tips on proximity to good schools, transport links, and information on nearby development plans, and they have an understanding of the intricate price variations that can vary from one side of the street to the other. Increasingly, buyers’ agents are being asked to handle much more than the search and acquisition process. They are also relied upon to recommend legal professionals, and even to suggest design consultants for refits and renovations.
Jeremy Davidson has been acquiring some of the most exclusive property in Belgravia, Chelsea and Notting Hill on behalf of his clients for over 20 years. His role is continually expanding and now far exceeds the services offered by most London agents. “The job of a search agent, especially when you are a small outfit, is more than just 9am to 6pm, “ he says. “It is a 24/7 job and you are always on call, often acting as a confidant in more than just the property search.”

 

Deal breakers
Negotiating the deal is another essential string to the buying agent’s bow. Experienced professionals such as Dell can negotiate aggressively for their clients, in Black Brick’s case saving an average of 10.5 per cent on asking prices for properties secured last year. Whilst getting a good deal might be a primary goal for many investors, the saving is not always the main concern, especially if the buyers are searching for their perfect London home. In many cases, the successful structuring and presentation of the offer put forward to the seller is as important a part of the negotiation process as securing the best price. “Savings are not the main thing for many of my clients,” says Davidson. “We are employed to identify what the client is looking for, find it, and having found it, to make sure that we secure it. Sometimes price is immaterial.”
Other attributes required of a buyers’ agent include the ability to understand cultural differences, to respect and preserve client confidentiality and to offer expert advice and knowledge beyond the realms of investment. “We help with sourcing finance, a good solicitor or tax adviser, and introduce our clients to the best architects, interior designers and even professionals in sourcing artwork,” adds Dell.

 

Taking sides
Experts have for a long time been automatically employed when it comes to almost every other investment decision – be it art or the stock market. Today, for those investing in luxury bricks and mortar, the instruction of a good buyers’ agent has become an equally essential requirement. An estate agent’s remit is to market a seller’s property and to achieve the best possible price for their client. A buyers’ agent looks to obtain the best market opportunity working soley for the buyer and whilst ensuring the buyer makes the correct purchasing decision. They are therefore open to the entire market, whereas an estate agent will normally only offer the properties on their books.

“I mainly deal with international clients from HK and UAE,” says Matthew Turner, director of Astute Property Search. “These clients arrive via industry contacts or directly through exhibitions which Astute attends. Price brackets vary from a first time investment circa £500,000 (US$775,000), to a lifestyle purchase of around £7 million (US$10.8 million). The most common request at the moment is for student accommodation, where the client looks to save money on rent for their children whilst obtaining a manageable investment once their son or daughter has finished their studies.”

Simon Barnes Property Consultants
www.simonbarnes.com
+44 20 7499 3434
Price range: £5million to £50million.
Fees: Sign up fee starts at £1,500 plus VAT, with an additional 1 per cent of the purchase price on acquisition of a property.
Areas covered: Prime Central London including Mayfair, Belgravia, Knightsbridge, Chelsea, Kensington.

Black Brick Property Solutions LLP
www.black-brick.com
+44 20 3393 6090
Price Range: In central London from £500k to £20million+. For country searches, from £1million.
Fees: an initial one off registration fee of £3,000 plus a success fee, calculated as the greater of 2.5 per cent of the value of the property purchased or 20 per cent of the saving we make off the original asking price as a result of our negotiations.
Areas covered: Mayfair, Belgravia, Knightsbridge, Chelsea, Fulham, Kensington, Notting Hill, Holland Park, Bayswater, Hyde Park, Marylebone, Regents Park, St John’s Wood, Hampstead, Richmond, Wimbledon, Battersea, Canary Wharf, the City. Country: Home Counties, Windsor, Berkshire, Oxfordshire, Surrey, East and West Sussex and Western Kent.

Jeremy Davidson Property Consultants
www.jeremydavidson.co.uk
+44 20 7823 5053
Price Range: £10 million upwards.
Fees: No sign-up fee. 2.5 per cent of the purchase price on acquisition of a property.
Areas covered: Primarily Belgravia, but also Chelsea and Notting Hill.

Astute Property Search
www.astutepropertysearch.co.uk
+44 20 7409 5270
Price range: Normal transactions between £700k to £2.5 million.
Fees: 1.5 per cent of the purchase price, with a retaining fee upfront of £1,000 deducted from the final fee.
Areas covered: Popular areas include Knightsbride, Kensignton, St.John’s Wood, Mayfair. Clerkenwell / Farringdon is also a new favourite, the new train line Crossrail will be live by 2017.

Why invest in Prime Central London?

Buying in London is still an excellent and secure investment. In August 2011, the same week that the FTSE 100 posted its largest fall since November 2008, fresh highs were recorded for London properties. (e.g. a prime central London apartment bought for £2.3million in 2004 sold for £5.25m, a 130 per cent increase in seven years.

Prime Central London property stock is low but international interest is continuing to intensify. Leading agents (Savills and Knight Frank) are predicting that London property prices are set to grow by up to ten per cent in 2012. The weakness in sterling obviously has a huge part to play. Asia investors benefit from up to 35 per cent discounts on London property prices as a result of currency movements.

Asian clients represent a large percentage of the current London client base. The UK capital is viewed as a safe haven, and many Asian children are now educated in the UK.


What can a UK buying agent offer?

With regular property road-shows showcasing international property investment opportunities now coming to Asia, a good buying agent will:

• Offer access to (secret) properties not on the open market
• Identify which investment opportunities to choose
• Identify which properties offer the best return
• Ensure a transparent relationship with the selling estate agent / competitive edge in a bidding war
• Add credibility and strength to the purchasing offer
• Save the buyer money
• Ensure the buyer gets the exact property they are looking for

London essentials

London boasts one of the oldest, most mature property markets in the world. It has traditionally provided secure returns on investment and despite global uncertainty, London property market has continued to grow.

Preparing to host the 2012 Olympics has caused extensive inward investment in London. It also the no.1 European city for business (Cushman & Wakefield, 2010 European cities monitor).

London’s excellent infrastructure includes five international airports, one of the world’s largest underground-overground rail networks and high speed rail services to Paris and Brussels.

London is a global city. More than 300 languages are spoken in London, and it is the wealthiest area in Europe (Office of National Statistics).

London offers first class education and universities. It holds the no.1 ranking in the QS World University Rankings



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