Is It Time to Buy a Home in London Webinar October 18, 2018 A - - PowerPoint PPT Presentation

Is It Time to Buy a Home in London Webinar October 18, 2018

A Perfect Storm—UK Property Prices Down Due to:

q Brexit Vote 2016

q Weak UK Currency q Major Stamp Duty Increase

Situation Today: Prime Central London property prices are on average 17.6% below 2014 peak…

Source: Savills:MiM Prime London residen4al - July 2018

…But even the best locations masks considerable variation and

• pportunity at an individual property level

What matters most?

• Quality of property
• Quality of location

(proximity to tube, noise levels, etc)

• Size of property
• Where’s on-trend

Source: Savills:MiM Prime London residen4al - July 2018

• 35
• 30
• 25
• 20
• 15
• 10
• 5

Price Change since June 2014, Performance by Decile, Prime Central London

Best-performing Worst-performing

Price Change

Stamp Duty (One-off Buying Tax)

Buy-to-let and second home Stamp Duty Tax Bands Examples Example Price Stamp Duty Effec;ve Rate £750,000 £50,000 6.7% £1m £73,750 7.4% £1.5m £138,750 9.3% £2.5m £288,750 11.6%

Brackets Standard Rate Buy-to-let / second home rate (April 2016)

Up to £125,000 0% 3% £125,001 - £250,000 2% 5% £250,001- £925,000 5% 8% £925,001-£1.5m 10% 13% Over £1.5m 12% 15%

Source: HMRC

Maximum Annual Property Tax (Council Tax)

• Kensington & Chelsea: £2,246
• Westminster: £1,421

Post-Brexit, the £ is 25% below 2014 levels; and10% below year leading to Brexit vote

UK Referendum on Leaving the EU £ / $ Exchange Rate

WHERE to Buy? And Where Not To…?

Focus on the Prime London Boroughs: Kensington & Chelsea and Westminster

Kensington, Chelsea and Westminster

Gloucester Road Victoria Knightsbridge St James’s Park Green Park

Minimum Price Guide

• Studio: £500k +
• 1 bed: £650k +
• 2 bed: £1.2m +
• 3 bed: £1.5m +
• Mews House: £1.75m +

PROPERTY EXAMPLES

OVERPRICED: Nice property but started on the market for £2.95m—too high! Now reduced by 24% and may go down further WRONG AGENT: this agent specializes in the high end, high prices—this one-bedroom gem for £650k is excellent value in great location!!

Good properties but….

• Don’t be tempted by size!

It’s loca]on that counts the most!

• This flat is on one of the

busiest roads in London—a “red route” which means it’s a main route through

• London. Buses and trucks

constantly drive by.

• This property appears to be

good value at £1.35m for just over 1,000 sq feet, but it needs work and is on a terrible road!

A 2 bed 2 bath flat to avoid

A great 2 bed 2 bath flat

• This predy lidle 2 bed 2 bath is located on a beau]ful tree-lined street minutes from Nofng Hill Gate and less

than a 15 minute walk to Kensington High Street

• Could use a small amount of upgrades but gefng 2 beds and 2 baths (830 square feet) on a prime street for just
• ver £1.3m is predy good.

A new development to avoid

• Marketed as prime Kensington but right on the border with Hammersmith, so not near good shops or good

transport

• On a busy road
• Huge development; no character and no soul

A great new development in the heart of South Kensington

• Refurbished Victorian building in central South Kensington loca]on—near tube sta]ons, shops, restaurants,

museums, etc.

• Lots of character
• Bou]que development: only 11 proper]es

A mews house to avoid

This mews house appears to be fairly good value at £3.25m for over 2,000 square feet and in a convenient South Kensington loca]on, however:

• It is on a “working mews”, ie, there are several noisy businesses surrounding it such as a car rental company

and car servicing garage

• One third of the square footage is in the basement which has no natural light at all and no ven]la]on

A good mews house with potential

• This mews house is in a prime South Kensington loca]on and it is over only 2 floors with great light and has a small

garden.

• It started on the market at over £4m, which was too high, but has been reduced several ]mes and is now on at

£2.95m (and nego]able) with 1,800 square feet in excellent condi]on.

• A new owner could even add a basement (subject to planning) and increase the size to 2,500 square feet