Renting in London: when it makes sense

For many years at the prime end of the market, people have tended to lean on the more traditional forms of transaction such as buying as opposed to renting, while no such sentiment existed in cities like Paris and Berlin. These days, it is not just acceptable, but shrewd to consider renting in the capital. It seems 2018 is the year, ironically, that London joins the Continent.

Many agents across London are recording near record figures for letting income—in some cases, it is exceeding sales income. The reasons for this are multi-faceted, however, it’s largely due to the past 4 years of uncertainty beginning with George Osbourne’s Autumn Statement on December 3, 2014. Since then, the changes to Stamp Duty, CGT (Capital Gains Tax) for foreign sellers, general elections, Brexit and wider geo-political concerns have cooled the sales market, bolstering the rental appeal as a short- to mid-term, secure option.

The London economy is also proving, increasingly, to be driven by more diverse industries. No longer dominated by steady professional services, the Capital’s new silicon city is attracting professionals from the world of technology, media and telecom communications, whose job numbers now trump that of insurance and finance. That, in turn, means an increased number of highly transitional businessmen and women who don’t need to stay in one city but might work throughout Europe’s capitals. For them, having a ready-made, hassle-free pied-a-terre in the middle of London is a handy solution.

Renting is also a useful way of dipping one’s toe into the market. For those clients who want to get to know an area or a property before committing for the long term. We regularly negotiate a right-to-buy clause so that we have first refusal should the vendor wish to sell or the client wish to buy at a later stage. Of course, renting is also a naturally attractive option for the global elite who move around the world according to the seasons and social calendar.

 

The Buying Solution’s service: what we offer

Such is the growing demand for rental homes in the capital—be they for periods of three months or three years–that The Buying Solution has recently introduced a rental finding service in London and the Country.

The approach mirrors our property buying service in that we carry out a detailed consultation about the exact requirements, preview and discount the vast majority of properties on the market, and use our collective and expansive number of contacts and experience to open otherwise closed doors—to date, over 70% of rental properties secured have been off-market. We carry out all the due diligence, negotiate the best terms for clients and manage the whole transaction through and past move-in by even setting up your utilities for you.

Finding the perfect rental solution has its challenges – there is a certain pressure for it to be perfect as there is less scope to make adjustments. Most common among our clients’ requests is that the properties have been recently renovated to the highest standards and fall in exactly the right location. But further requests are more esoteric and cover meeting detailed privacy concerns, to finding adequate outside space and dog-friendly leases or proximity to industry specific requirements such as professional recording studios and editing suites.

We will always go that extra mile to meet these requirements. One client recently remarked after the conclusion of their rental search: “The properties you find are far superior to anything that we’ve seen in the past through other companies – you are The Rental Solution.”

Land Buyers v’s Estate Buyers: The Difference

There’s a shortage of supply and continued demand from wealthy investors both from the UK and overseas looking for large tracts of land, as well as country estates, but these days it’s increasingly rare that the two types of buyers will fight over the same thing. One is very driven by the opportunities afforded by buying and owning land when it comes to wealth planning; for the other, the driver is more about lifestyle and status.

What they want to buy

When it comes to buying land for investment, the golden rule for buyers is the simpler the better. This is an investment, not a lifestyle purchase. The optimum size would be 1,000 acres, preferably neatly ring-fenced, of good quality arable land. The location doesn’t matter too much as long as the soil is good for crops (livestock is more complicated than arable) but there are premiums paid for this sort of block that lies within 2 hours of London as owners quite like to be able to go and see their land from time to time. Further premiums are paid for tracts in key counties such as Hampshire, Oxfordshire and Gloucestershire: if an existing estate or wealthy neighbours can buy up adjoining land, they’ll likely pay much more for it.

Estate buyers, meanwhile, are much more interested in the house and the amenities that come with it. The ideal estate for today’s market is about the same size, 1,000 acres or so, but it will be mixed: approximately 200 acres of parkland in the middle, a good mix of arable and livestock land as well as plenty of well-planted mature woodland which makes the most of the land contours so that it’s both attractive to look at and will benefit the shooting. To cap it all off, a river should run through the estate. In the past, there was an appetite for an enormous gem of a house but these days a pretty Georgian manor house of between 10,000 and 15,000 sq ft is ideal —and that should come with a few cottages and farm buildings. Critically, there should be no road noise, no footpaths and no pylons interrupting the views. The reality is, of course, that this doesn’t exist. If you can tick seven out of 10 boxes, that is good.

Who are the buyers?

There are lots of drivers for the investment land market and buyers come from a mix of professions, entrepreneurial, corporate and international backgrounds but the common theme among them is that they want to invest their money into something that is both tangible and safe. There are various reasons why buying a large tract of land makes sense from a wealth planning point of view. Firstly, someone might have sold land for development—not uncommon these days with the drive to build more houses—and if they then re-invest the proceeds from that sale into buying more land, known as a ‘qualifying asset’, they can roll over the capital gain on the initial disposal.

Another reason you’ll see a lot of successful entrepreneurs coming into this market is to do with Inheritance Tax (IHT) planning whereby if you invest in land and own it (and, importantly, control or run it) for at least two years, you can pass it down to the next generation without paying any IHT on your death. That makes land very attractive for wealth preservation. Not only that but it’s a very tangible asset, you can enjoy it, touch it, walk on it or run a shoot from it—and that’s comforting in this volatile era.

Despite the threat of reduced agricultural subsidies following Brexit (even though they have been guaranteed by the current Conservative Government until 2022), there is the firm belief among many people that the population is going to continue to grow and people have got to eat and in two or three generations’ time there’ll be more people than land to produce food for them, so it’s a very valuable commodity long term–a pound of wheat is more valuable than a pound of gold if you’re starving.

Those interested in estates, at the moment, are largely international. Traditionally, British buyers dominated—I think it’s deeply ingrained in all us Brits that if you’ve been successful, you want to own your private bit of the countryside. So, over the last 15 years, the market has been dominated by British buyers—largely hedgefunders, entrepreneurs and those who’ve been successful in IT. Since, Brexit, however, I’ve noticed a higher number of international buyers coming into this market including those from the Middle East, Americans and one or two Russians with a taste for the English way of life (driven by the security the UK offers, the stability the investment offers and the weakened pound).

What’s on the market?

Very little, in the case of land. In 25 years of working in this world, I’d say the market is as tight as I can remember it. With estates, the story is similar. In a typical year, there might be between five and seven available publicly and the same number again privately. I can think of five or so available privately and currently none on the open market. But of course, there are always doors that we can knock on – the catch is that there would be a premium to buy them.

Best pancakes in London

 

The Buying Solution’s London team suggest some of the best places to go and eat pancakes on Shrove Tuesday, February 13, 2018

 

Pancakes in west, south & south-west London

Granger & Co

Year-round brunch spot on Pavilion Road, Chelsea & Westbourne Grove, Notting Hill.

Chez Lindsay

Richmond—Breton-inspired crepes & gallettes overlooking the River.

La Petite Bretagne

Hammersmith—a few minutes’ walk from the Tube station.

My Old Dutch

Kensington High Street & King’s Road, Chelsea—London’s original pancake house.

Tried & True

Putney—New Zealand-style café.

Senzala Creperie

Brixton—for sweet and savoury crepes.

 

Pancakes in central London

Mamie’s

Covent Garden—French restaurant and Breton creperie.

Granger & Co

King’s Cross & Clerkenwell—as above.

The Wolseley

Piccadilly—grand European-style cafe.

Riding House Cafe

Fitzrovia—all day restaurant with “pancakes to die for”, according to one fan.

The Delaunay

Aldwych—another European café-style restaurant which is open all day.

Where the Pancakes Are

Southwark Bridge—dedicated to pancakes.

Pancakes in Piccadilly

Pop up in Fortnum & Mason’s Lower Ground Floor for Shrove Tuesday.

The Breakfast Club

Soho (and other areas)—another good brunch spot.

 

Pancakes in east London

Le Merlin

Clapton—a creperie serving traditional buckwheat pancakes.

Creperie du Monde

Hackney E5—serves savoury crepes and waffles.

Trade

Commercial St E—artisanal coffee and breakfast spot.

Cafe Miami

Clapton E5—fashionable breakfast cafe in Lower Hackney.

 

The year ahead in London

 

Q: What is the biggest challenge facing the property market in Prime Central London (PCL) this year?

A: Shortage of supply. One major contributing factor to that is the large proportion of property in PCL that is owned by those whose main currency isn’t sterling—be they American or European or from elsewhere. While the value of the pound has improved, it’s important to bear in mind that if you’re Spanish and selling in London, you’ll be hit by a 15% discount on the value of the property (since the peak) and a 15% discount on the value of sterling. Selling agents love to highlight the fact that the weak pound is good for buyers but if you’re planning to relocate to Europe, it is a negative for vendors. That is having a substantial impact: unless there is serious motivation to sell, they won’t.

 

Q: Who is likely to be buying in 2018?

A: There will be those who want to buy for the simple reason that they want to get on with their lives. There are others who see this as the bottom of the market and for them 2018 could be a “buy opportunity”: the FTSE is still in excess of 7,000; the pound has improved; and Brexit is an unfolding story.

 

Q: Will interest rate increases have an impact on the market?

A:  I haven’t got a crystal ball so this is pure conjecture but it’s unlikely that Mark Carney is going to do anything dramatic. 0.5% of an increase is not going to make a big difference to most owners. If the interest rates went up by 4%, then it would make people think again—but this is unlikely to happen.

 

Q: What about Brexit?

A: Brexit is an ongoing discussion with clients: some are still feeling negative about the prospect, but there are a few more people now who are feel more positive than there were before.
Q: What properties are selling and why?

A: Properties are selling when the price is right. But it’s also true to say that the stars have to been in alignment and the property has to have few or no compromises. A property in a first-class street, in a quiet location, will command a greater premium than one around the corner which is in a secondary (busier) location. Before, that secondary property might have done well. But these days, properties in what we might call the “first division” are now greatly outperforming properties in the “second division”. Additionally, there is no rush and buyers have the time to be a lot more choosey. When the market was flying, there was pressure to buy something and, when you lost out on a few deals, you’d settle for something else. Today, that’s no longer the case. There’s no urgency.

 

Q: What can you do to help clients in 2018?

A: The main thing we can do to help clients is simple: it’s to save time. There’s an awful lot of property out there that’s not worth seeing. We filter them out for clients. Added to that, we’re a single a voice in a noisy environment. As one client said recently: ‘It’s nice to have someone on my side of the fence acting for me and not the vendor.’ That’s our job.

The Buying Solution’s favourite snowdrop gardens

As carpets of white begin to cover the countryside, read about The Buying Solution’s favourite places to admire snowdrops throughout our regions.


COTSWOLDS & GLOUCESTERSHIRE

Newark Park, Ozleworth, Gloucestershire
National Trust house—go for their spectacular Snowdrop Weekend on February 4 & 5, 2018

Beverston Castle, nr Tetbury, Gloucestershire
Open specially to allow visitors to appreciate the drift of snowdrops which are overlooked by a castle that dates from the 12th century (see National Garden Scheme website for details)

Home Farm, Huntley, Gloucestershire
Walks around the gardens of Home Farm start at the end of January to take in the carpet of snowdrops. Open January 28 and February 11, 2018 (see National Garden Scheme website for details)

Colesbourne Park, nr Cheltenham, Gloucestershire
A world-famous collection of snowdrops, which is open to visitors from February 3 until March 4, 2018

Batsford Arboretum, Moreton-in-Marsh, Gloucestershire
56-acre arboretum which boasts drifts of snowdrops and spring-flowering bulbs

Camers Garden, Old Sodbury, Gloucestershire
A pretty 4-acre garden in a dramatic position on the Cotswolds escarpment

Cerney House & Garden, Cirencester, Gloucestershire
Set high above the pretty Churn Valley, this is a romantic English garden with a woodland trail

Painswick Rococo Garden, nr Stroud, Gloucestershire
Believed to be one of the largest naturalistic plantings in England, the garden boasts an impressive display of snowdrops


HOME COUNTIES

Stowe House, Buckinghamshire
Wittingly called “Stowedrop” time, they bloom in their masses throughout the Elysian Fields, Sleeping Wood and Lamport Garden. The season continues until February 28

Cliveden, Maidenhead, Berkshire
Wonderful snowdrops can be found in the woodland and on the steep west-facing escapement that runs down to the edge of the River Thames

Welford Park, Newbury, Berkshire
Believed to have been planted by Norman monks to decorate their church for the feast of Candelmas (held in the last Sunday of January), the snowdrops are found in the five-acre beech wood that runs alongside the River Lambourn. The season runs from January 31 to March 4, 2018

Gatton Park, near Reigate, Surrey
Splendid gardens, designed by Capability Brown, which are open every Sunday in February


SOUTHERN COUNTIES

Bramdean House, Alresford, Hampshire
A beautiful, five-acre garden which has carpets of spring bulbs—especially snowdrops (see National Garden Scheme website for details)

Down House, Itchen Abbas, Hampshire
Overlooking the Itchen Abbey, adjoining the Pilgrim’s Way, is this three-acre garden which comes alive in February with snowdrops, aconites and crocuses. Open Sunday, Feb 18, 2018

Little Court, Crawley, Hampshire
This walled and sheltered traditional country garden is well-known for its special snowdrops and wild crocus. Open, Feb 18 & 19, 25 & 26, 2018. (see National Garden Scheme website for details)

Mottisfont, near Romsey, Hampshire
Snowdrops thrive along the banks of the Font stream whose microclimate means they bloom a week or two before others

Lacock Abbey Gardens, Wiltshire
Boasting a woodland garden with carpets of aconites, snowdrops, crocuses and daffodils. Open on February 24.  (see National Garden Scheme website for details)


LONDON

Chelsea Physic Garden, SW3
Masses of different varieties flower through the winter-flowering shrubs

Ham House, Richmond
Snowdrops can be found under the very old acacia trees in the garden of this attractive house in south London