I deal with a number of UHNWI’s who are looking to purchase property that are both intergenerational assets for their portfolio but also allow a diversification of wealth. However nearly all without exception, want best in class, namely “The Trophy Asset.” I work for a small and select client base focused on the golden postcodes of prime central London.
My clients have perhaps experienced the most volatile market conditions of any group within the past three years. The majority are international buyers who have been most affected by changes in the UK taxation but on the upside, due to their wide international profile, have had the most to gain from the weak sterling. Clients who acquire a £10m house that is in effect a pied a terre or portfolio asset and therefore liable for the 3% surcharge, have seen stamp duty on the purchase double in two years. However on the upside, cost of purchase, inclusive of tax, would have fallen by 19% in US dollar terms over the same period.
Despite the continued uncertainty around Brexit and the fiscal drag of taxation many of my clients, potential clients and indeed wider UHNW buyers, still continue to see London as a safe haven in a global context. This is further evident by the last few top end transactions that have just traded. Examples include a leasehold house in Belgravia that recently completed for just shy of £100m, a complete boutique development of six apartments and a house located next to Buckingham Palace transacted for £112m, a house in SW10 for £48m, a house in W8 for £85m plus, an apartment in SW1 for £20m, various apartments in W1 for in excess of £25m, to name but a few.
However as the market continues to be exposed to fluctuations in buyer and seller sentiment, as well as the general economic pressures and with increased exposure to SDLT, CGT and IHT, clients are really focusing the mind on the liquidity that the very best addresses afford.
My search for the trophy assets continues.