The London luxury property market
By Jo Eccles
With the luxury fashion goods sector in the doldrums, many are questioning whether this will have a knock-on effect on the London luxury property market.
Factors such as unstable exchange rates, political unrest, anti-corruption campaigns, sanctions against certain wealthy Russians and so on, have hit many luxury fashion houses hard and there are questions about whether luxury UK property developers are next.
We’re already seeing a stand off at the higher end of the market, between luxury property developers and the prices that wealthy buyers are prepared to pay. We recently negotiated on a property for a client where the developer was demanding £2,850 per square foot and the property hadn’t even been fitted out with white goods or curtains. The developer wouldn’t budge on price and in the end we walked away.
There are increasing concerns that such a high proportion of new properties being constructed in London are at the luxury end. Many commercial sites which have been sold off to create residential homes have been sold to developers who are building luxury homes aimed at the very high-end of the market, not to the average home buyer. This is not ideal, considering the real need for properties at the lower end of the market. However, if the luxury home market does start to dip, we may see more developers turning their attention to the mainstream market. With the general election ahead and talk of mansion tax still on the table, only time will tell.
I don’t think we have a dramatic crash ahead of us, however, with such a large number of luxury properties due for completion over the coming years and given the wider global outlook, I will be interested to see if the developers will start listening to sensible offers.
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