Luxury properties in central London are pretty much expected as standard for many buyers these days. The word luxury may seem somewhat overused but many developers are listening to what the consumer (buyers) are looking for. More often than not though it is the new build or redeveloped properties that generally meet this 5 star rating. This high standard of fit out and modern style that doesn’t require any work is preferred by the overseas buyers looking to purchase off-plan from their homes in the Far East, so they can house their children who are studying here or to act as a rental investment.
Luxury new builds enhance renting prospects
When it comes to renting, tenants prefer something new and modern over something that is older. Services are generally better and the apartments have been planned and designed to maximise trends and needs of the modern buyer. Most new builds have cycle stores, such is the popularity of biking around town. Other benefits are often items like comfort cooling, intelligent lighting and sound systems, heated flooring, mirrors with hidden TV’s, exclusive gyms, swimming pools and saunas, plus things as farfetched as heated flooring in underground carparks in order to keep the wheels from getting cold…..I kid you not!
What is the current state of the luxury property market?
Over the last two and a half years the luxury property market has seen a reduction in terms of the number of buyers looking, especially above the £2m+ price bracket. This is due mainly to the two rises in stamp duty land tax (SDLT) which happened in December 2014 and April 2016 respectively. Additional bands of SDLT were implemented in 2014 and last year an additional 3% became payable for those with two homes or more. However if you are buying medium to long term the additional payment will become irrelevant compared to the estimated 20% compound rises predicted over the next 5 years in the luxury market.
The current benefits for buyers looking within the luxury market is there is a better choice of stock to choose from, and with prices at least 10% lower since December 2014 (in the £3m - £5m price bracket), you are guaranteed not to be paying top of the market prices. Recently we have agreed transactions from hedge fund workers, oil brokers and bankers, but more so from the overseas buyers who have benefitted greatly from the weaker pound.
So whilst some may sit back and wait for further falls, smart buyers are being bolder, snapping up these luxury apartments. After all, the property market in London’s West End only ever takes a breath before prices start climbing again.