Prime Central London Snapshot 2019

According to CORE’S latest Prime Central London Snapshot 2019 “London’s long-term position as a global property investment destination remains unchallenged and the appeal of Prime Central London (PCL) continues to be strong, despite the ongoing socio-economic impact of Brexit.”

Capital preservation and PCL’s inherent appeal is deeply understood by the UAE and wider Middle East-based investors/end-users who have historically shown a keen interest in properties within the PCL districts - education, business and secondary homes being the primary demand drivers for this demographic.

Alex Casaki, Head of London Desk at CORE says, “With attractive exchange rates and uncertainty surrounding Brexit, interesting opportunities are being created for dollar pegged economies in the region. Currency advantage has now resulted in savings of nearly 25%, further compounded by softened sales prices (an average of 15%), making property purchase in PCL over 40% lower than June 2014 peak values for buyers trading in dollars. This represents long-term capital preservation opportunities for UAE based investors.”

UAE Occupier Demand

For first time purchasers looking to enter the market, enquiries for new build developments are concentrated below the £2 million or above the £5 Million mark. As these properties are predominately acquired for clients and their families to be used when they visit London, top of the line amenities and service/concierge offerings associated with these new developments continue to be a key draw.

The UK’s education system is still highly preferred by many Middle Eastern HNWIs and this continues to be a key decision driver for choosing London over other global cities, along with factors including business interests and long-term capital preservation.

The report highlights “Traditional UAE investors, with established residential portfolios in London are increasingly looking to take advantage of the ongoing market conditions, acquiring upgraded or larger units in PCL which are now perceived to be fairly priced. This trend has led to a rise in enquiry levels in the ultra-prime end of the market for newly developed/redeveloped properties, priced between £10 - 20 million.”

Alex Casaki concludes “We at CORE advised on a number of prime transactions in 2018 and YTD 2019. Increasingly, UAE clients appear to have taken the view that the currency advantage and price softening outweigh the uncertainty surrounding Brexit. We have seen this sentiment continue over H2 2019 with Prime Central London properties remaining the most sought after.”

Prime Central London Market Trends

• Higher sales volumes: According to LonRes data, in Prime Central London the number of homes sold in Q2 2019 rose 3% over the same period last year. However, even with the rise in transaction volumes, annual change in sales prices are down by 5.3% year on year.
• Demand building up: Currently, we are witnessing demand building up as most buyers and sellers have been waiting over the last few years due to the socio-political uncertainty caused by Brexit. Additionally, lower stock levels continue to be an issue, as new instruction volumes remain low and interested buyers face a lack of choice with limited new stock reaching the market.
• Opportunities to upsize: With larger, more expensive properties recording significant price falls, the gap between smaller apartments and larger houses is narrowing, presenting the opportunity for end-users to upsize/upscale.
• Pricing to sell: Sellers who have brought their homes back to the market (following a prior withdrawal) tend to be more realistic now with pricing. Of those properties withdrawn since 2015 and relisted since the start of 2018, 62% returned to the market at a lower price, while just 18% saw a price increase (some of these may have had improvements to décor or a lease extension).
• Rise in off-plan interest: CORE has also witnessed an increased level of enquiries for off-plan properties as clients are favouring post-handover payment plans as a way to climb the property ladder while developers are providing substantial discounts for bulk purchases of more than three to four units.
• High yield levels: With sales prices dropping and rental values on the rise, average gross yields at 3.6% in prime London are at a seven-year high. The market is witnessing an increase in renewals taking place instead of new lets, due to very limited new rental stock.

About CORE’s London Desk:

CORE’s London Desk provides access to the very best of our extensive network, while guaranteeing impartial advice, absolute discretion and confidentiality. We act on behalf of private clients, funds and family offices, offering clients a unique personal service from the initial stage of property search and acquisition, through the negotiation process, and to after-sales care including property management, all from within the UAE. Through our offices, we deliver to Middle East based clients an extensive portfolio of London’s best properties. This is coupled with specialist advice on a diverse range of expertise including:

• Residential investments
• Private search and acquisitions
• New homes and super prime developments
• Country homes and private estates
• Property management and leasing services
• Valuation services

For further information or media queries, please contact:
Alex Casaki - Head of London Desk,  alex.casaki@core-me.com
Prathyusha Gurrapu - Head of Research & Advisory,  prathyusha.gurrapu@core-me.com 

© Press Release 2019