Pound weakness gives US dollar buyers firepower in major London postcodes
With the UK government’s recent mini-budget and ensuing weakening of the pound, what impact is the current economic outlook having on the London housing market? And how could this be a driver for international investment in Prime Central London properties?
In September, former UK Prime Minister Liz Truss and her team announced stamp duty reductions and a range of other tax-cutting measures in a bid to spur economic growth. The ‘permanent’ reduction in stamp duty was designed to help demand in the housing market and is being retained by the new Chancellor of the Exchequer, MP Jeremy Hunt. The reduction saw the zero rate band for stamp duty – the amount at which tax becomes chargeable – drop from £125,000 to £250,000 on September 23, 2022, meaning a saving of £2,500 for all buyers . First-time buyers no longer pay stamp duty on the first £425,000 (instead of £300,000) and the value of any property on which they can claim this relief has increased from £500,000 to £625,000. Other measures affecting the residential real estate sector, which remain under consideration, include the potential liberalization of planning regulations and the release of land to accelerate development in “investment zones”.
In the days following the mini-budget, the exchange rate between the pound and the US dollar fell below US$1.10. When combined, the effect of falling house prices and the weakening of the pound has resulted in high levels of discounts for investors buying into the UK with currencies pegged to the dollar, such as the Hong Kong dollar and currencies in many parts of the Middle East and Asia. Those looking at marketplaces such as Belgravia will enjoy an effective discount of 40.3% when buying in dollars.
As the supply and availability of London’s best new build homes dwindle and the weak pound sterling continues to stimulate international investor activity, prices in central London are expected to trump most others. UK markets over the next five years. According to the latest Knight Frank index, house prices in central London (PCL) rose 2.7% in the year to September and the number of potential buyers in PCL and POL was 53% higher than the five-year average (excluding 2020) in September. At the same time, the number of new sales instructions was 22% higher than the five-year average and the number of offers accepted increased by 79%, underlining the strong demand. According to the figure above, although property prices are expected to fall in the near future, the 5-year cumulative projection indicates a 7.5% increase in property prices in central London according to research. by Knight Frank.
“Given the expected increased emphasis on access to gardens or green spaces post-pandemic from buyers, particularly those in urban settings, SW1 is well positioned to benefit. Data from our most recent attitudinal survey, as featured in our latest edition of the Wealth Report, we found that 62% of Ultra High Net Worth People (UHNWIs) globally place a high value on being close to green spaces because of their uniqueness. views. With a combination of excellent local amenities, access to green space and Chelsea Barracks bringing a sustainable lifestyle within reach of its residents, London’s appeal to international buyers is sure to be reinforced,” adds Victoria Garrett, residential manager, Knight Frank. Asia Pacific.
VALUABLE INVESTMENT OPPORTUNITY IN PRIME CENTRAL LONON: CHELSEA BARRACKS
Highlight (left to right): Chelsea Barracks facade and Chelsea Barracks green spaces. Please access the attached high resolution images of Chelsea Barracks .
1. Located in a coveted central London address: Located in Belgravia, an affluent historic area of central London, spanning both the City of Westminster and the Royal Borough of Kensington and Chelsea, Chelsea Barracks is a classy development world comprising a rare collection of apartments, penthouses and townhouses, set around seven garden squares and built on 12.8 acres. A coveted address in central London, this prestigious area is bordered by Sloane Street and the infamous King’s Road; packed with luxury stores, iconic boutiques, contemporary home furnishing stores and art galleries. On Pimlico Road, antique shops abound, while Daylesford Farmshop and cafe offer organic food sourced from the idyllic Cotswolds. An exceptional selection of the best schools and universities in the UK can also be found close to Chelsea Barracks.
2. Compelling appeal to global investors with around 40% discount to Belgravia: Compared to July 2014 to September 2022, combining the effect of falling house prices and a weaker pound, the discounts offered can reach surprisingly high levels. During this period, property prices have fallen by 11% and the pound has fallen to record lows, so international investors will be able to benefit from a discount of around 40% on properties in Belgravia, where Chelsea Barracks is. With Knight Frank predicting price growth over the next five years in central London, Chelsea Barracks is repositioning Belgravia as one of the best performing areas in central London. Coupled with the weakening value of the pound sterling, world-class education and competitive transaction costs, London holds strong appeal as an attractive destination for global investors.
3. Life centered around green space: According to the Knight Frank Wealth Report 2021, 62% of Ultra High Net Worth Individuals (UHNWI) globally rate outdoor space and proximity to green space as an important consideration when choosing a new home, enhancing the appeal of Chelsea Barracks. Chelsea Barracks achieved LEED Platinum certification in 2021 and is now Europe’s most sustainable development and one of only 16 developments in the world to achieve this standard.
The Mulberry Square garden space at Chelsea Barracks has been redesigned as a communal vegetable garden growing a variety of colorful cut flowers, vegetables and herbs. Aspects of the culinary garden will be managed by the new restaurant, Le Campaner, in the future. The garden was designed by landscape architect Neil Porter, with creative input from renowned gardener Jo Thompson.
4. Historic Architecture: Chelsea Barracks is developed by Qatari Diar, which was established in 2005. Qatari Diar specializes in historic developments that beautifully preserve and enhance their local surroundings while providing owners with state-of-the-art modern conveniences. A team comprising Squire & Partners, Dixon Jones and landscape designer Kim Wilkie were selected by Qatari Diar to complete the master plan for the former Chelsea Barracks site in 2009, following a rigorous selection process. Together the team shared a vision that the plan for Chelsea Barracks should enhance value in all its forms – cultural, aesthetic, social and economic – improving the environment for local residents, businesses and the wider community. .
5. Apartments with high quality finishes: The design and quality of finishes of the properties have all been carefully considered and meticulously executed. The kitchens offer elegant and functional spaces; the work surfaces have been carved from Bianca Eclipse natural stone finished by Italian stone artisans, the bronzed iron balustrades that frame the balconies and windows are a bespoke design inspired by the botanical prints of William Morris, and the elegant Hardwood floors and custom cabinetry are built to last using the highest quality FSC certified European oak. Chelsea Barracks offers stylish living with modern conveniences and high specification finishes that include underfloor heating, comfort cooling, Creston systems, Lutron lighting, Wolfe and Sub Zero appliances, paneled bathrooms in Arabesca marble, the kitchen worktops in Bianca Eclipse stone and the woodwork in European oak.
6. World Class Leisure Suite: The Garrison Club, a carefully designed suite of lifestyle amenities, is for the exclusive use of residents of Chelsea Barracks. Encompassing all the benefits of a private club, including a state-of-the-art spa and gym, private cinema, game room, residents’ lounge and executive suite with two meeting rooms, the Chelsea Barracks were built with the future in mind. The master plan applies the principles of Georgian living for modern family life, with spaces and places to enjoy together and others to make your own, whatever your age, providing well-being for the spirit. , body and soul.