Truth or myth: foreign buyers securing London property bargains


After the Brexit vote was announced on June 24 last year, the pound fell to its lowest level against the dollar for 31 years meaning the spending power of property buyers with dollars in London soared. Overnight, their budgets increased by 11 per cent on the currency play alone.

There’s since been a lot of excitement in the media about dollar-based, dollar-pegged and Euro buyers coming to London to take advantage of these ‘bargains’. And these headlines get particularly lively when factoring reported discounts of up to 30% off asking prices. When the stars align, this can make a big difference for buyers as it did with a New York-based British client recently. He’d been looking with me for 18 months and had isolated a particular new-build property in south-west London. As a result of Brexit, his budget went from between £1.7m and £2m to between £2m and £2.5m overnight. With a developer who (post Brexit) was more willing to negotiate, we were able to buy a larger flat on a higher floor with a combined relative discount of about 35%.

While this worked out well for my client, it doesn’t address other matters that are affecting the capital’s prime property market. First among these is that the prime central London property market is dominated by discretionary buyers. In the last two years, I’ve bought no more than a handful of properties for permanent primary residences—the overwhelming majority of clients are people who are looking to secure investments, holiday homes or buying with a child’s future in mind. While on paper it seems like a great win for them to go to the market now, they are extremely savvy and are unlikely to buy unless there’s an extremely attractive opportunity. If the seller is too unrealistic or being too punchy with the asking price, they won’t buy. If the property isn’t exactly in the right condition or best-in-class, they won’t buy. I know of one Notting Hill-based agent who has done 120 viewings in 2 weeks and received just 2 offers. These buyers aren’t knocking down our doors because they know that the fundamentals of the market are such that anything they see today is likely to be worth the same in 6 months’ time.  There’s got to be a motivating factor to make them pull the trigger.

My hunch is that we’ll see more activity after Article 50 is triggered. I do regular trips to the Middle East and the message that I get there is that investment managers are being instructed to wait until the sterling bottoms out before they come to the London market. If I’m right, we’ll see more activity in the third and fourth quarters of this year. It won’t affect prices but will have an impact on the number of transactions.

I’m often asked where we are with prices in prime central London today and the very broad brush feeling is that we’ve gone back to 2012 values. You can almost track the decline in values to the first mention of Mansion Tax; since that time there has been a raft of measures introduced covering Stamp Duty, Capital Gains and changes to the rules and regulations of non-doms that have had a huge impact. Now that Brexit is in play too, things are unlikely to change very much until we have some further clarity on the future. And while the most expensive parts of the capital are dominated by discretionary rather than needs-driven buyers, even overnight budget boosts generated by the currency fluctuations won’t drive these people to the market.

2017: The year of buying Country houses off-market

Cotswolds property

Across all our regions and all price bands, we see a shortage of country houses coming to the market in 2017. As buying agents, we’re in the lucky position of finding out early which houses are due to be launched in the coming months so have a privileged long-view of the market. The “tip offs” come from different directions: our trusted relationships with the selling agents, previous clients who’ve let us know if they or friends are on the move or from connections that we’ve built up both professionally and personally throughout years of living in our patches. We are also lucky to benefit from the extensive contacts that also come from our parent company, Knight Frank. But this spring, feedback from everywhere is that very little in the way of stock is waiting in the pipeline—and that is concerning.

There are several reasons why this is likely to be the case. Firstly, the recent increases in Stamp Duty (SDLT) has forced everyone to re-think their reasons for moving as the buying costs have risen exponentially. If you’re sitting on a house worth between £1m and £2m, you’re questioning whether now is the right moment to upgrade. Yes, interest rates are historically low so it makes sense to borrow money but with so few houses coming to the market, there isn’t enough to tempt these vendors to get on and move. Additionally, in these times of political and economic uncertainty with Brexit, bricks and mortar are perceived as a safe place to keep money having performed well over the years in terms of capital growth. The easiest thing to do in such circumstances is to stay put and with interest rates unlikely to change dramatically there’s no need to do otherwise.

The market for us has also changed. We had a really amazing run of over 10 years when the premium country-house market within a 2-hour radius of London really motored. As soon as we found out that someone living in a nice house was in the market to move, we were there and doing deals which, in some cases, resulted in buyers paying substantial premiums for the best-in-class properties as there was plenty of competition waiting in the wings. In a strong country market, this was something buyers were prepared to do in order to secure something really special. But this was during a time of big bonuses, too. Today, people aren’t paid in the same way and are therefore more cautious about how they spend their money. The result is two-fold: it focuses more interest on supply in the price bracket of £1m to £2.5m and, as vendors were encouraged to bring their houses to the market earlier than perhaps they envisaged, anything that might have been sold this year or next, has already gone.

There are, of course, variations across our regions. Supply levels tend to be better to the south of the M4 than the Cotswolds—particularly the commuter-friendly counties of West Berkshire, Hampshire and Wiltshire where there is a more transient marketplace and a higher number of the much-desired classic Georgian-era houses.  Even the more populated parts of the Home Counties are facing a shortage especially in the hotspots like Henley-on-Thames and Guildford. The one motivation which is driving vendors to the market is what we call the “fourth D” of downsizers–who come after death, debt, divorce as the main reasons that houses are put up for sale. Parents who are looking to help children or grandchildren or couples simply deciding a house has got too big for them will be the main source of supply in 2017. However, downsizers often want to sell privately, too, as they’ll want to secure their next house before they let go of their current home. And this is a market segment that’s difficult to predict as it’s very reactive: as soon as the perfect village house with a shop and pub within walking distance is launched, they’ll want to sell quickly. However, if they lose it they may not get another opportunity for another year or so won’t want the publicity of an open market sale.

It’s here where we as buying agents can help smooth the process. We never forget clients, houses and rumours of potential sales. I’m buying something at the moment which I first saw 3 years ago off market. The vendors had failed to secure a house that they liked so they decided to remain where they were. Now we’ve made an approach on behalf of our client and a deal has been done off market. Life’s gone by and the vendors have definitely realised now is the time to downsize and happy to commit to a sale with the flexibility of a delayed completion date. This is indicative of how business is likely to be done certainly for the first half of this year.

Lack of supply in ‘Best-in-class’ also means that premiums will continue to be paid for these properties especially in commutable areas with quality schooling as there is a pent-up demand.  We are, therefore, warning clients that, despite what they read in the press, the prime markets in which we operate are still very competitive–especially if a property is realistically priced.  Being pro-active is therefore a necessity and this means going off-market.

TBS in The Evening Standard – The Cotswolds just got closer…..

Commuting from Oxfordshire:four of the best villages in the northern Cotswolds with less than sixty minute train journeys to London

From picture-perfect villages on the north-east fringes of the North Wessex Downs, to the hip home of Soho Farmhouse – these charming Cotswolds hotspots take some beating…  Jonathan Bramwell at The Buying Solution comments.

Read Ruth Bloomfield’s article at

The Cotswolds just got closer…