7 REASONS WHY LONDON IS

SEVEN REASONS WHY...

LONDON IS RETURNING TO FORM

Words by Oliver Bennett

London’s calling. And those city dwellers who left town at the start of the pandemic for a new life in the country are listening again, while as travel opens up, international buyers are re-engaging with the market. The areas making the most noise are those that make up what’s known as prime central London (PCL) – Mayfair, Knightsbridge, Kensington, Chelsea, Belgravia and Marylebone. And while there is some way to go before PCL values hit the high-water mark of 2014-15, that makes this a propitious time to buy, with values convincingly in recovery as we go to press. Options range from sprawling mansions to super-luxe apartments. However, with potential buyers up 48% this year compared to Q1 2019, in some parts of the marketplace there may not be enough to go round – another reason why those properties that are available will only sustain and gain. So, what are the real reasons for the bounce back of prime central London property?

THE AMERICANS ARE COMING Ten years ago, PCL purchasers came mainly from western and eastern Europe, China and the Middle East, buying up grand townhouses and apartments and turning central London into a global social hub. Now buyers from the US are back in town, with a well-heeled influx of East Coast private-equity financiers and West Coast tech tycoons, drawn to the city by the desire to have a London base to oversee European-wide business interests and for their families and the educational infrastructure. “We’re seeing more Americans in the Mayfair market than for years,” says Claire Reynolds, co-head of Savills PCL division. “They’re typically looking for turnkey trophy properties and have budgets of about £20m-£30m.” They love London and the fact it offers easy access to the continent – it’s only a short hop to Davos. There are other pull factors, too. As Alex Christian, director of Savills Private Office, says: “I spoke to a billionaire who’s moving here for a change of lifestyle. He thinks America is becoming unsafe, and says he wants to try something else for his family and give London a go.”

TECH BUYERS In PCL property, as elsewhere, it’s digital first, and tech money is making waves in London. “There has been a notable increase in tech multimillionaire and billionaire buyers coming into London,” says Christian. “Most tend to be in their thirties and forties – way younger than our other buyers with similar budgets or requirements – and they are from all parts of the world. Most are looking for large houses with good gardens, parking and pools in Chelsea, Kensington and Holland Park, but others are looking for the lock-up-and-leave, secure lifestyle provided by Mayfair’s new-builds.” Beyond Mayfair, according to Pete Bevan, co-head of Savills PCL, statement buildings such as the King’s Cross Gasholders and Bankside’s Triptych can also “lure buyers outside the normal comfort zone”.

HIGH-QUALITY STOCK There is always a supply issue in London, but the bounce back is helped by stock that positions PCL as a global contender, with a mix of grand mansions, new-build properties and trophy refurbishments. The OWO, in the Old War Office Building, is attracting buyers who love history, and branded blue-chip developments such as Park Place in St James’s, No 1 Grosvenor Square, 60 Curzon, Holland Park Gate and Twenty Grosvenor Square are faring well, too. North of Hyde Park, Connaught Village is “one of the last remaining areas close to the park that isn’t totally redeveloped,” says Reynolds. “It’s charming, quintessentially British, with Georgian architecture and Selfridges as your corner shop.” Bayswater also has two significant developments in Park Modern and The Whiteley, while properties in the Cadogan Estates, the Grosvenor, the Boltons and Kensington’s garden squares are evergreen. Some prefer to go smaller and are snapping up two- to three-bedroom apartments in new developments. Instead of vast places with five bedrooms, they get a hotel experience, with services on tap. That’s another departure from the past: London’s services are now vastly improved. “About 15 years ago, you couldn’t buy a property with a decent concierge, gym facility, swimming pool and parking,” says Ed Lewis, head of residential sales at Savills. “Now these are de rigueur. ”

GOOD VALUE Of course, “good value” is a relative term, but if you’ve got £10m to spend, London isn’t a bad bet, particularly when compared with tight markets such as Hong Kong and Monaco. And after the Covid slump of 2020, there’s definitely a strong sense of uplift. “Prime central London is coming back, but we’re still about 18 per cent down on 2014,” says Christian. “There’s a really big value-add here.” Moreover, says Reynolds, buyers now look at the entire “ownership journey”: that is to say the costs of buying, holding and selling. “In this sense, London is pretty good value compared to other destinations.” And PCL growth is forecast to be higher than outer prime London this year – indeed for the next five years, in so far as it is possible to predict. That said, the prime suburbs St John’s Wood, Hampstead and Clapham will always retain their appeal for people who like big houses with lateral floors, carriage drives and rolling gardens.

REMOTE BUYING We might all be tired of endless video calls, but they have been a boon for remote buying. Savills has seen a huge amount of virtual browsing, particularly from Asia Pac buyers, some from countries that have had more prolonged travel restrictions and where remote buying was a growing trend, even before the pandemic. “Fully remote deals are still extremely rare,” says Reynolds. Rather, international buyers tend to do remote homework with advisers, then visit before full purchase. Occasionally, however, they leap into the void. “We had one buyer in the Middle East purchase a house from his sofa with his family sitting alongside,” says Bevan. “The tech is so good we can explore every nook and cranny. Buyers can quickly decide if a property feels right.”

POST-PANDEMIC TRENDS Early lockdown saw buyers head to the countryside, but as London emerged from its Covid chrysalis it regained its pull – to the point where some might be regretting their decision to go rural. Thus the trend for combining country life with an urban pied-à-terre (covered elsewhere in this magazine), while the post-pandemic idea of the “15-minute city” – where life’s necessities can all be found close to home, a short walk or bike-ride away – gives neighbourhoods such as Chelsea, Marylebone and Belgravia a real boost. And there’s another factor driving PCL sales: post-lockdown divorce. “Sadly, it’s been a big driver for us,” says Bevan.

BECAUSE IT’S LONDON

Add up all of London’s parks, shops, galleries, restaurants, schools and hospitals, and you get an immense urban proposition that competes with – if not beats – anywhere else in the world. “London’s got something for everyone,” says Reynolds. “Whichever lifestyle you’re seeking, there’s a neighbourhood that suits,” in a largely tolerant, multicultural metropolis. Transport links are good, English is the lingua franca and it helps that “the British education system is world-class”. Eton, Harrow, Westminster, Marlborough and their like are all a huge lure for ultra high net worth families. Bevan is currently dealing with a German buyer looking for a “cultural fix. He can’t get the same depth of activity anywhere else in Europe.” And security is a factor, too. “There’s a reason why people move from New World economies, often with starker divides between rich and poor.” There is also medical expertise – from Harley Street to King Edward VII’s Hospital. And weather-wise? “High net worth individuals tend to come in May, disappear to southern Europe, then come back in

September.” But mostly, London has a unique urban buzz. The villages and high streets – from Marylebone to Hampstead, Chelsea to Primrose Hill – make for a patchwork city that’s unlike any other. That’s the real reason prime central London is eternal.