Market Insights June 2024

Please find below our June Market Insights, outlining the key themes we’re seeing in the prime central London property market this month.

As always, the team and I would be delighted to discuss any property search, acquisition or property management requirements you may have.

Best wishes

Jo Eccles

Founder and Managing Director, Eccord

+44 (0) 20 7244 4482

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Interest rates are of greater concern than the election

Interest rates are of greater concern than the election

Since the election was announced, none of our clients have changed their property intentions by putting plans on hold, or decided against a purchase where they were already under offer.

An election this year was already factored in, and with the likely outcome more certain than usual, buyer activity with our clients has been unaffected and their search briefs and reasons for buying remain varied. Since the election announcement we have been instructed on new searches ranging from £2.75m - £30m from both needs driven and discretionary buyers.

Interest rates have been a far more important factor influencing decision-making in the market, and many mortgage buyers remain on the sidelines, as they have for the last 24 months, hoping for downward movements in rates. We are seeing a much larger proportion of cash buyers in the market than usual, currently 80% versus a long-term average of 50%, as mortgaged buyers continue their ‘wait and see’ approach.

At this time of year, London market activity in certain areas typically increases with the arrival of international buyers spending the summer in the capital. Over the next few weeks, it will be interesting to see how their appetite for London property is impacted by the election, particularly with confirmation of Labour’s pledge to further increase the stamp duty surcharge for overseas buyers by an additional 1%.

Impending changes to the Non Dom tax regime, and Labour’s plan to expand Britain’s inheritance tax to include foreign assets held in trusts, is certainly influencing their thinking. From conversations with our Non Dom clients and our wider network of private client advisors, it’s clear that many Non Dom residents are busy running the numbers on their options, but many won’t make decisions about their future in the UK until there is more clarity on the proposed changes.

Reassuringly, we are seeing high value transactions still happening and numerous UHNW families moving to London, in order to expand their business interests in Europe and educate their children in our prestigious British schools.

Super prime buyers are getting younger

Super prime buyers are getting younger

Recent figures show that the average age of buyers purchasing a property worth £25m or more is now 41 years old, versus 53 a decade ago.

We have seen this confirmed amongst our own clients. Over the past three years, every buyer we have worked with spending £20m+ has been in their forties (or thirties in some cases) – primarily comprising entrepreneurs who have sold their businesses, private equity partners, hedge funders or oil and gas traders.

Those with families continue to focus on areas such as Notting Hill and St Johns Wood for lateral houses with self-contained staff accommodation and excellent schools.

In many cases, younger super prime buyers are hugely experienced in their business field but buying a property is often one of their first major wealth purchases, and they quickly recognise the complexity of navigating the super prime property world.

In one case, our British financier client had tried to buy a particular trophy house three years before appointing us but couldn’t get traction with the seller. After showing him and his wife all other options, we suggested revisiting the original house and were able to open dialogue with the seller and expertly negotiate a clean and swift purchase for them, exchanging and completing within six weeks.

For another British private equity client in their thirties, we secured a trophy plot in St Johns Wood as a private sale, buying directly from the owner.

Orchestrating and negotiating high value property transactions is a delicate process and many of our super prime buyers are often surprised by the intricacies.

Significant change in the estate agency model

Significant change in the estate agency model

Since Covid, the sales dynamic within the London property market has undergone significant changes.

For decades, the traditional high street estate agency model has dominated the process of buying and selling prime property, but its reach and influence has rapidly changed with the rise of one or two person American-style property brokers and newly founded estate agencies with broker franchise models.

The high street estate agents have seen a raid on their talent as a result, with many of the best selling agents moving to smaller independents or broker model estate agencies, who provide a more flexible and entrepreneurial way of working, plus a larger share of revenue.

As well as presenting challenges to established estate agencies who are facing a reduction in talent and declining market share, it also brings challenges to the property search process for buyers, who must now navigate a far more complex and fragmented marketplace.

For example, when working recently with a client searching for a family home across Knightsbridge, Chelsea and Kensington, we personally contacted 136 sales agents, brokers and representatives operating in that patch to ensure we had the full picture of all sales opportunities in the market. Pre-Covid, we would have spoken to approximately 45.

For buyers searching independently, it’s virtually impossible to identify every sales contact and make a successful approach. So much so, that over the past two years, a third of our client purchases have been through sales agents who our clients have never heard of.

Alongside the impact of the Covid tech revolution, which transformed the way people access and view property all over the world – and enabled many property viewings and purchases to be undertaken with confidence remotely - this fragmentation of the sales market represents, in my view, the most significant change the property industry has seen in recent years.

Advice for landlords weighing up their options

Advice for landlords weighing up their options

Landlords have faced extremely challenging times over the past years and our advice is regularly sought on whether they should hold their current rental investments, or sell.

In my latest column for The Telegraph, I look at the key factors for landlords to consider when deciding whether to remain in the buy to let market and why, despite the challenges, property remains a comfortable and familiar choice for many.

You can read the full column here if you’re a Telegraph subscriber.

Eccord wins industry award

Eccord wins industry award

We are delighted to have won a prestigious industry award earlier this month at the annual Lonres Property Awards, which brings together the leading prime London property professionals.

Celebrating ‘London’s power players’, Eccord was recognised for being involved in one of the stand out transactions of the year.

Our passion and expertise underpins every client we represent across our property search and property management teams, and it’s always a huge honour to be recognised by the industry and held in such high regard.

Thank you to Elicyon & Taylor Howes Designs for providing us with two of the above beautiful images.

For 18 years, Eccord has been trusted by private clients, family offices and international companies to provide residential property search, acquisition, relocation and property management services.

Our award-winning team has since successfully acquired over 400 properties and manages a portfolio of more than 150 rental properties and private homes.

T: +44 (0) 7244 4485