One of the most prevalent questions property investors are asking in the UK in light of the imminent Brexit looming next quarter, is what will 2019 look like?
While widespread predictions state that the UK housing market is set for a significant slowdown, Harrods Estates’ clients, most of whom are international investors are still very much in the market.
We talked to both our Lettings and Sales Directors for an overview of 2018, their reflections and what they think it means for 2019.
Shaun Drummond, Director at Harrods Estates commented, “Despite predictions that the London market will remain flat next year, we have seen activity from our clients, of which approximately 75% are international and predominantly from the Far East, Middle East and China. This is mainly contributed to the fall in sterling, making the exchange rate more attractive, especially for US dollar holders.
We are advising our clients to view their investments in London as long-term. However, in the super prime property market, those that don’t need to sell, or are not in a rush to sell, are holding on to their properties or are unwilling to reduce their asking prices. There will always be a high demand to live in the prime areas of central London and as such, we don’t expect to see any further reductions in property values contrary to some news reports. Our clients come to us knowing we are to be trusted and discreet, and guide them through difficult times.
On the lettings side of the business, Sarah McIntyre, Lettings Director at Harrods Estates commented, “We have seen a marked increase in demand for lettings in Prime Central London in the last 12 months with the majority of tenants coming from the Middle East (approximately 85%) with the remaining 15% coming from the Far East, Asia, Russia and Europe. In particular, our Knightsbridge office has seen a 47% rise in transactions and an increase in the number of high value short-term lets, particularly in the summer months, as many wealthy individuals like to visit London during this period. Other tenants include business professionals and wealthy students.
Several of the short lets (between 5 weeks and 3 months) have attracted rents of £17,000 per week, £12,500 per week and £10,000 per week. From the perspective of long-term lettings, our clients generally pay £2,400 per week on average, although in some cases they pay up to £5,800 per week for a property in Park House Apartments, Mayfair. With many other long lets in the immediate vicinity of Harrods, our clients are paying £3,500 per week.
Interestingly, we had a client pay 10% over asking price for a duplex apartment in SW1X, further demonstrating the demand to rent in prime central London at the moment, particularly for newly refurbished, best in class properties.”
Regardless of the uncertainty surrounding Brexit, London will remain one of the most popular destinations worldwide for high net worth individuals to invest in.