Tag: General Election

Knight Frank released the latest iteration of its Wealth Report earlier this year. Liam Bailey, Head of Global Residential Research at Knight Frank, summarised the five key themes shaping 2024 as:

• Global GDP will likely expand by 2.9%, down from 3.1% a year earlier, defying recession fears
• Rates will fall, but the pace remains uncertain
• Real estate investment volumes will improve
• AI investment will drive real estate requirements
• Climate change will impact property values

The Wealth Report predicts 2024 could be prime for buying property in London. Wealth creation is on the up, and 22% of High-Net-Worth-Individuals (HNWIs) have expressed a desire to invest in residential property.

The upcoming general election isn’t expected to disrupt purchase behaviour, according to Knight Frank’s Intelligence Lab research: “We expect prime central London (PCL) and prime outer London (POL) to underperform the wider UK market this year.

Given that prices in PCL are still 17% lower than their last peak in mid-2015, we believe growth will kick in more fully from next year.”

As a London buying agent, I can certainly see an appetite to buy in London; people want to put roots down here, perhaps because of family, work, or historical connections.

Whilst the Wealth Report talks of house prices in London in general terms, it’s important to remember that London is a series of villages, each with varying levels of value and popularity, and prices will differ depending on where people desire to live. This popularity is driven by several factors:

• The quality of what’s available in the market for both apartments and houses
• Good transport links, which can also be a prompt for improvements in the area
• Affordability, even for those with healthy budgets
• Community

A good village atmosphere can dramatically increase property value which is why Marylebone is so popular; the high street has great shops and cafes. Pavilion Road, off Sloane Square, is incredibly busy at the weekend for this same reason, and these factors will have an improved impact on the surrounding areas.

The Wealth Report discusses ‘The Great Transfer of Wealth’: “Over the next 20 years, a transfer of wealth and assets will occur as the silent generation and baby boomers hand over the reins to younger generations.”

Boomers (those born between 1946 and 1964) are currently the wealthiest generation; their mean net worth falls between $970,000 to $1.2 million, (£760,000 to £940,000) according to Fortune.

Over the next 20 years, it’s expected that Boomers and their parents (The Silent Generation), will pass down £5.5 trillion in assets in the UK, and $84 trillion in the US.

The media has widely discussed the potential impact of an intergenerational wealth transfer on Millennials and Generation Z (those born between 1981 and 1996; or 1997 and 2012, respectively). This transfer of wealth could enable many from these generations to enter the property market for the first time.

However, despite widespread predictions, I haven’t seen this in the market yet. While it’s common for parents to buy property for their children (a topic James Burridge spoke about recently), my experience is that property buyers come from various generations.

Whilst demand remains high, new priorities are burgeoning thanks to lifestyle changes and environmental factors. Buyers are increasingly looking for air conditioning, lifts, and porters to help with deliveries and to maintain security, for example. This often leads to the purchase of newer apartments, and apartment living brings with it new concerns. 

Service charges have increased by large percentages, way above inflation, which isn’t an issue if service is exemplary, but with many new developments, service charges are estimated and will increase after three to four years. What that increase might be is difficult to predict.  

For more information, or if you’re thinking about making a prime property investment in London, please get in touch with me here.