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Bucking the trend

Not many people have positive things to say about their managing agent.  It is a sector of the property industry which is subject to miles of red tape and ever-changing regulations to get to grips with, while the press love to harp on about extortionate service charges demanded by ‘greedy’ managing agents. It’s a tough gig!

As pressures to remain financially viable bite, many of the smaller managing agents serving central and prime areas of London have merged with larger companies.  Block managers get relocated further and further away and are expected to take responsibility for too many buildings – I recently heard of a firm that had moved their block management operations to South Africa!  Without sufficient time to dedicate to each building and little opportunity to visit sites, it is hardly surprising that low morale, high staff turnover and disgruntled clients are becoming the norm, resulting in a downward spiralling “lose, lose’ vicious cycle.

To all of the above, I say NO!  A BIG FAT NO! No, to race to the bottom. No, to stressed-out overworked block managers. No, to poor levels of service and no, to unhappy clients.

At Nicolas Van Patrick we are proud to be different; bucking the trend by keeping it small, keeping it local and keeping service levels and professionalism at the heart of what we do.  Does it come at a cost? Of course, like anything else in life, you get what you pay for. So yes, our management fees are a bit higher, but interestingly we usually save our clients money.  By dedicating our time and resources to hands-on management, we can identify and unlock potential savings, avoid wasteful expenditure, and make sure spending decisions are made carefully and with a long-term view.

Our small block management team has a combined wealth of over 40 years’ residential experience.  We love working closely with our clients, believing that the human relationships and dynamics in each building are just as important as caring for the building itself.   It is this thoughtful, sustainable, holistic approach to block management that has seen our portfolio grow, almost entirely, by word-of-mouth recommendation.  Win, win!

Although keeping it small is key, we do of course have ambitions to grow a little bit more.  So, the next time you hear someone grumbling about their managing agent, you know what to do.

Hannah Roberts is Head of Block Management at Nicolas Van Patrick

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Nicolas Van Patrick expands into Chelsea with acquisition of HLR

Boutique Knightsbridge estate agency Nicolas Van Patrick (NVP) has acquired Chelsea lettings and management company HLR.

The independent firm, co-founded by Nicolas Pejacsevich, Patrick Alvarado and Dutch businessman John Fentener van Vlissingen in 2014, has added well-established brand HLR to its stable, having acquired Hobart Slater in 2018.

HLR, founded nearly 40 years ago by Ginny Hicks, has a long, respected history. With the help of Julia Wiggins, HLR has focused on delivering quality service and long-lasting relationships built up over the years from personal referrals. The HLR team in its entirety will move into NVP’s Montpelier Street offices in order to ensure continuity for clients as HLR integrates into the NVP business.

With the continued support of Boron, the investment company of the J.A. Fentener van Vlissingen family, NVP remains on the lookout for further acquisitions if the right opportunity comes along.

Nic Pejacsevich, director of NVP, says: “Over the years, it has become clear that to succeed in agency it is important not to be too reliant on the sales market, which can be sporadic and unpredictable. Subsequently, we have plans to grow the lettings side of the business and have been in the market for a while for a company with the same ethos and relationships that we have built with our clients at NVP.

“I had long heard about HLR’s highly-experienced and dedicated team and their success in the rental business. We believe this is the right fit for NVP and are excited to continue to build a foothold in Chelsea, an area we have long worked in and loved.

“We remain extremely passionate about maintaining the ethos of a boutique agency with a vision to build long-lasting relationships with clients, a view shared by Ginny and her team.”

Ginny Hicks, co-founder of HLR, says: “We are excited to work with NVP and for this next chapter. We have always felt that being a small company gives us an advantage, one we see continuing with NVP. Both companies understand the value of an experienced team headed by accessible partners who offer a personal and bespoke service.”

Julia Wiggins, who joined HLR in 1999, adds: “Our established knowledge and experience of the lettings market in Chelsea, with long-standing clients who appreciate our personal touch, will continue under a different banner. While there are many large corporates operating in London, we passionately believe there is strong demand for a personal service-type of agency for those who want a hands-on service, which is what we continue to offer with NVP.”

About NVP

NVP was founded by Venezuela-born Nicolas Pejacsevich and Madrid-born Patrick Alvarado in 2014, with the backing of Dutch businessman John Fentener van Vlissingen. In 2018, NVP acquired Hobart Slater and relocated to its Montpelier Street premises. NVP covers sales, lettings, property and block management across Knightsbridge, Chelsea and Belgravia.

About HLR

HLR was established in 1986, growing from a relocation agency to a multi-faceted residential letting and management company. Its property portfolio covers Belgravia, Knightsbridge, Kensington, Holland Park, Chelsea, South Kensington and Mayfair, providing an individually tailored service for clients and tenants, both corporate and independent.

For further information:

Please contact Melanie Bien on 07875 175357 or email: [email protected]

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Why successful property transactions need difficult conversations

By Nic Pejacsevich, director of Nicolas Van Patrick.

One of the measures of a good agent is the number of uncomfortable conversations they are willing to have. Telling the vendor what they want to hear and overvaluing their property may result in instructions but in our experience, it will not turn out well.

At Nicolas Van Patrick, we are having plenty of uncomfortable conversations with vendors right now. The market is price-sensitive and slipping values mean the tempo is sluggish, yet decisions on price adjustments need to be executed swiftly by clients, which is easier said than done! In Knightsbridge, the volume of transactions is low and those which are happening are mainly to European buyers already based in the UK who are purchasing a home, whether that be a house for their growing family as a long-term base or a pied a terre for their own use. Many have been priced out of Chelsea and Notting Hill so are buying in Knightsbridge because they are finding value. Very few are investment buyers.

We find that if you get property on the market at the right level from the get-go, it results in a happier outcome for vendors. Sometimes the price is right from the start, sometimes not, but the key is that the client understands that while we may be prepared to try for the higher price they desire, we maintain that a lower price is the right one. This sets the correct tone for the relationship, making it easier to go back and reduce the price should it not sell at that higher level.

Part of the problem is that prime central London is made up of micro pockets or markets, with Notting Hill very different to Marylebone, Knightsbridge to Kensington etc. Available data on pricing is often much more general and doesn’t drill down enough; for example, even within an area, Montpelier Square is very different to say Chelsea Square. This is where an experienced boutique agent adds value, as long as the vendor is prepared to listen and take advice. In 2014, ultra-high-net-worth individuals gravitated towards London but that is no longer necessarily the case as there are other options with less onerous taxation. There is plenty of cash ready to pounce on the right opportunity, but by this we mean ‘best in class’, which is few and far between.

In a tricky market, the worst advice you can give a vendor is to price high. There is a strong chance they will end up chasing the market down, achieving less than they would have done if they had priced correctly at the outset. Vendors must consider whether to adjust their price now to a level that they may well be uncomfortable with but means they end up transacting or pull out and return at a later date. If the market perceives the price to be fair, buyers will come out and bid; if they think it’s considerably overpriced, they won’t dare make any sort of offer as they judge the vendor to be out of touch with reality. We find buyers prefer to engage with a serious seller who is priced more realistically from the outset.

Of course, we want to get the best price for vendors but we are sober about how this is achieved given market conditions. On one hand, we are delighted to have a good level of decent stock, but it is indicative of the market we are in, with vendors trying to sell before the tax situation potentially worsens should a Labour government be elected in 18 months’ time. For those concerned about this, the time to do something is now. The market will pause as we get closer, so if you are somewhat bearish about a Labour government and what it might entail, our advice would be to prepare for those difficult conversations with your agent and take action now.

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NVP enjoys record-breaking year as Knightsbridge market turns a corner

By Patrick Alvarado, director of Nicolas Van Patrick

Despite a turbulent few weeks with the mini-Budget the latest in a long line of events to disrupt the housing market, NVP is on target to have our best year ever!  

Since setting up the company in 2014 much has been thrown at us – stamp duty increases, the back and forth over Brexit, Covid, the war in Ukraine and five prime ministers. The normal sales model hasn’t been there, making for an exceptionally difficult and challenging market. But finally, we can say all the hard work and dedication has been worthwhile as we’ve made some incredible acquisitions on behalf of clients.

We have also been able to work the market to our advantage following an internal restructure and made some significant sales in Knightsbridge Village. We have focused on good old-fashioned agency, qualifying applicants, establishing which are strong buyers and keeping in regular contact with them. As a company we are now in that sweet spot where our people know what they need to do and like what they are doing. Nic and I have seen difficult markets throughout our careers and while they mean less volume, they give you more time to work what is there. To place transactions well in difficult markets needs a combination of hard work and instinct.

We find ourselves in a position where we are posting a good profit and are excited about next year even as the wider economic situation is precarious. We have been true to ourselves, and it has paid off. Although we are a boutique agency, we have over £30m of deals we are expecting to tie up by the end of November, while I personally am on track to do £100m of sales and acquisitions by the end of the year – a personal best!

Knightsbridge represents best value in PCL

Unfortunately for us Knightsbridge started losing its sheen eight years ago, about the same time as we opened our business. The property market in Knightsbridge therefore has not had the same buoyancy as other parts of PCL. Covid has also meant that international buyers are not around; indeed, the Chinese for the most part still can’t get here. Sales have been driven by Middle Eastern clients, particularly Saudi and UAE, who remain keen to invest and take advantage of the sterling/dollar exchange rate. We have been working with these clients for a long time and while there have been many disappointments along the way we have kept at it. It’s particularly pleasing to see that hard work being rewarded with good revenues.

We believe Knightsbridge is on the up once more and regaining some of its lost shine. Some may still feel that Knightsbridge is ‘too Middle Eastern’ and has been for sale to the highest bidder since the heyday of the launch of One Hyde Park. It hasn’t helped that we don’t have one main landowner like Cadogan or Grosvenor who are sensitively reinvesting in their estates which helps to underpin their intrinsic value. But there is so much more to Knightsbridge than a small section of the Brompton Road. For those looking to buy in PCL, Knightsbridge has everything on its doorstep; Harrods plus many other luxury stores from Sloane Street to Brompton Cross.  It is close to the royal parks, has great schools and the best-value properties in PCL. One client recently told us that he felt Chelsea is too expensive, the condition of the properties is not great and the gardens are non-existent at a certain level. You can buy a similar house in Knightsbridge as you could in Chelsea for circa £1,600 a square foot compared with £2,000-plus a square foot in Chelsea.

Price correctly

The biggest impact a vendor makes is when they launch their property; if you come to the market at an ‘aspirational price’ you lose your best opportunity and may have to wait months or even years to sell. Some agents value high in order to get the instruction before working on it for a long time and then eventually reducing the price. We often find ourselves having to come to the market at a higher price than our initial valuation simply because clients want to work with NVP but at a greater price based on higher valuations they have received from other agents. This results in a much more protracted process. This is particularly the case in PCL where the market is so mature and there are so many data points via the portals and of course someone who knows someone in property, as well as most clients having advisers to guide them.  

There is much talk of an impending UK wide house price correction. However, we feel this is much more applicable to the country market which has seen its sharpest growth in many years which has plateaued since pre-Covid.

Discretionary buyers

Discretionary buyers who don’t need to purchase but would like an asset in London or want to take advantage of the exchange rate make up a big part of our market. They will transact on best-in-class or if something reflects true or discounted value. We are receiving many calls from buyers based in countries with currencies pegged to the dollar who are looking to take advantage of the current exchange rate, yet remain confident on sterling’s ability to recover. While the currency has moved in favour of dollar buyers this does not mean they are willing to pay the prices that are being asked. In their minds, the favourable exchange rate simply mitigates against the onerous 17 per cent stamp duty they have to pay, bearing in mind many of our buyers are both non UK-residents and own a second home. Case in point being a recent transaction with a first-time UK buyer who was spending £15 million in cash on a house and thought he was ‘au fait’ with the stamp duty he would have to pay, but had not allowed for the extra 5 per cent applied to every tier due to him being a non-resident and a secondary homeowner.  

The only exception to all this are trophy best-in-class assets which are few and far between. £10m is something of an ordinary budget in PCL and will still require some compromise from buyers with regard to their ‘wish lists’. Knightsbridge houses are often smaller, taller or narrower compared with what many buyers at this level are used to. Special, wide or double-fronted properties with parking, good-sized gardens and which back onto a communal garden will easily cost north of £20m. 

A happy 2023?

As 2022 comes to a close we find that Christmas is a good time to transact as many vendors want to draw a line on the year having tried to sell over many months. Those looking to sell this year don’t have long to do so; otherwise, the chances are that they will have the long wait until Spring. 

We are cautiously optimistic about 2023 and what it may bring – having seen many ups and downs over the years we trust in the resilience of PCL.

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Time for a Knightsbridge revival?

By Patrick Alvarado, director of Nicolas Van Patrick

It is never wise to consider the housing market as a uniform whole as not every area ‘performs’ as well as the next. Knightsbridge is a prime example; while it has been well documented that the housing market has thrived over the past 18 months/two years, Knightsbridge has lagged behind its prime central London neighbours. Meanwhile, Kensington & Chelsea has seen a stellar rise in values, with its property market outperforming Knightsbridge as it is mainly driven by domestic buyers and international-domestic buyers who have made London their home.

Knightsbridge hasn’t witnessed the same level of recovery in sales and values as RKBC because it is more reliant on international buyers. While the £5m-plus market is reportedly strong in PCL, when you drill down, it’s not surprising to find that many of those sales took place in RKBC. Travel restrictions mean that the mainland Chinese who love Knightsbridge so much are still not back in town, while the Middle Eastern buyers are to a degree but perhaps not as many as one would usually expect.

However, the main issue facing non-resident international buyers, more so than Covid, the conflict in Ukraine or Brexit, is taxation. It has totally changed our market as those buying property in the UK find the taxation extremely onerous; global travellers have plenty of choice and don’t have to buy here. If you are an international buyer looking for a decent return on your investment, PCL doesn’t give you that; other European cities do it better. However, London remains the place where people often choose to park their money because it is regarded as a safe environment, as well as having plenty to offer in terms of quality of life.

Mayfair and RKBC have fared so much better than Knightsbridge because they do a better job at appealing to the domestic and international-domestic market. Both benefit from over-arching landlords who invest in significant regeneration projects, with the Grosvenor Estate behind Mount Street, Elizabeth Street and Motcomb Street, and the Cadogan Estate’s investment in Duke of York Square, and more recently the redevelopment of Pavilion Road. This isn’t replicated in Knightsbridge, although we are pleased to note that some of the intensive heavy construction work which has gone on for some years is finally coming to an end. Key developments such as the Peninsula hotel at Hyde Park Corner, the high-end residential developments in Parkside and the regeneration of Lowndes Square with the Chelsfield development, are all welcome.

While Knightsbridge may lag RKBC in terms of price growth, the flip side is that on paper it represents pretty good value compared with other parts of PCL, particularly when you consider its geographical position. A house in Knightsbridge has plenty to recommend it – beautiful garden squares, Hyde Park, St James’s and plenty of fantastic shopping.

When it comes to pricing, the market is undoubtedly shifting; we are telling clients that it is not as much a seller’s market as it has been so if they are serious about transacting, they need to be realistic on price. The Knightsbridge market is extremely price sensitive with best-in-class commanding a premium while everything else needs to be as close to the ‘true’ price as possible. It is important to get the pricing right when launching a property as the window of opportunity is short; we are already halfway through June and the market is increasingly moving towards a buyer’s market.

That said, there are plenty of reasons to be cheerful about Knightsbridge’s prospects, particularly when it comes to the rental market. Underpinned by a lack of supply, the rental market has improved enormously since the days of Covid. Rents have hardened while yields have improved substantially, and tenants are embarking on longer tenancies which is good news for our landlords.

We have seen more deals agreed in the past month than we have in a while, on both the sales and rental side, and when the last of the travel restrictions are removed, we believe the Knightsbridge market will fare even better.

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The lost art of valuing – how the banks have yet to catch up with the market in PCL

By Nic Pejacsevich, director of Nicolas Van Patrick

One glance at the flurry of updates from housebuilders and estate agents and it’s clear that the pandemic residential housing boom still has plenty of momentum. It has certainly been a strong market for Nicolas Van Patrick over the past year, but we would still urge a note of caution. Our pipeline in September was the biggest it has ever been and yet we were in danger of losing nearly a quarter of it thanks to down valuations from the banks. Fortunately, we have been able to save some of those deals we thought were lost but it has been a stressful time, requiring some delicate negotiating.

One example of a deal that nearly fell out of bed was an unmodernised property with development potential for sale in Knightsbridge. We agreed a very good offer from a buyer who needed a 40 per cent loan-to-value mortgage so they weren’t too stretched. However, the bank valued the property at 12 per cent below the agreed price as it wouldn’t take into account the full extent of the development potential. We explained to the buyer that this has been happening frequently; luckily, he was open to bridging some of the gap, as was the vendor, who was prepared to meet him somewhere in the middle. We were able to find common ground, with an outcome that was satisfactory and fair to both.

With another property, buyer and seller agreed to proceed at £22m but the bank came in at £20m – another significant haircut. While the buyer was happy to proceed at the reduced price, the seller wasn’t, and in this case, we weren’t able to bridge the gap.

Lenders mostly rely on comparative evidence in order to assess value and where this is piecemeal, as is the case in Knightsbridge, it can be difficult. The banks don’t have enough comparisons to reflect prices being agreed; because of Covid and particularly in PCL, there are very few comps around, which isn’t the case in an area such as Wandsworth, for example.

It is extremely frustrating for us as agents, particularly where seller and/or buyer are not open-minded and willing to negotiate between what the bank thinks something is worth and the previously agreed asking price. The question is: when are the banks going to align themselves to the reality of what is actually happening in PCL? Will it take them until the spring to catch up? Transactions are taking place which support the prices sellers are asking as, in the main, we have seen buyers willing to pay in order to get the property they want. But we need a critical mass of cash sales, achieving the prices that are possible, in order to give lenders the evidence they demand. 

We have come a long way from last spring when the housing market was forced to close its doors to business because of the pandemic. The situation is vastly improved but when it comes to lending, the banks remain prudent. Moreover, it is a myth that all PCL deals are done for cash; many buyers leverage, partly because they have to as their assets may not be liquid and/or to take advantage of low interest rates. If the bank down values a property, some buyers will try and use this as a way of chipping on the price. The trouble is that while sellers may be motivated, they are not often desperate and don’t mind playing the long game. If that means waiting for another buyer who will pay more, then so be it. 

At Nicolas Van Patrick, we like to think of ourselves as the voice of reason. We have our feet on the ground and part of our job is to educate buyers and sellers as to what is going on in the market. So what can buyers and sellers do? It is worth being flexible if you possibly can. The market is improving but we have come to realise that there are no guarantees. If you are serious about proceeding, it is worth trying to bridge the gap.

It is a shame that the valuation process is often lost in the pounds-per-square-foot exercise and important factors such as the uniqueness of a property, ceiling height, development potential and market sentiment are not more of an integral part of the valuation process. Having said that, it is unsurprising that not everyone is aligned when it comes to values, given what we have been through and are still going through. There are gaps in market knowledge, which needs to be filled and could take time. What we do know is that despite everything, London remains a place where people want to live and to invest, and that continues to give us cause for cautious optimism.

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Why Nicolas Van Patrick is truly international

By Nic Pejacsevich

Recently, on two occasions, I have been asked by vendors considering listing their properties with Nicolas Van Patrick what I think about some other agents having more of an international reach. I know what they mean – they see those large firms with plenty of offices overseas as perhaps better placed to sell their Knightsbridge property because of their perceived wide reach.

But while I understand what they are getting at, such enquiries make me chuckle as you will struggle to find a more international agent than Patrick or myself. Put us together with the ‘Van’ between us – John Fentener Van Vlissingen, our Dutch industrial partner – and in NVP, you have a formidable level of international-ness.

I am of Austrian-Hungarian and Italian heritage, born in Caracas, moving to Rome at the age of nine, then onto New York and back to Rome before finally settling in London 24 years ago. In the mid-nineties, London was morphing into a global international city, full of opportunity and I chose to stay and make my life here.

Patrick has Spanish-French heritage and his journey was not dissimilar in that he was born elsewhere, travelled for his studies and then settled in PCL. Patrick was born in Madrid before moving to London as a young boy to attend the Knightsbridge Prep school Hill House, partly because it was so international. London wasn’t quite as global in its outlook in the eighties as it is now and Patrick studied in Paris and Switzerland before settling in London and building a career and family here. Patrick may have been born overseas but he has grown up in the neighbourhood in which he now works so has a unique understanding of Knightsbridge and has built an impressive network here over a long period of time. Yet crucially he also ‘gets’ what it means to be an international domestic foreigner as many of our clients are – someone from abroad who settled in London some time ago and made it their home.

Understanding the culture

All these travel and life experiences mean we are fluent in five languages between us and most of our clients are international. Indeed, it is not exaggerating to say that our  international-ness really is our USP. On those valuations where our international reach is questioned, we feel we are right to push back and argue that on the contrary, we are very international indeed. Many people who weren’t born in the UK speak English but what puts them at ease is someone who can also converse in their native dialogue and understands their culture. Terms of reference, being able to draw on our experience of living in other countries – all these are important when we speak to clients. Take, for example, a recent instruction we won on a property in Ennismore Gardens, where the vendor is a Hungarian Baron. I have no doubt that our background helped in winning that business.

Ultra-high-net-worth buyers who are looking at London are unlikely to attend an international trade show in Beijing; rather they will have advisers on the ground which are recommended to them. They will have local property finders already in London, doing the groundwork for them. When we meet them, they can relate to us as we are truly international.

Knightsbridge – a truly international borough

Knightsbridge appeals to Chinese, Indian and Middle Eastern buyers in particular, as well as European and domestic clients. Being based in Knightsbridge for so long has helped Patrick receive many referrals over the years. Growing up in London in an international environment and attending an international school means many of his contemporaries who are now in their late-40s and mid-50s have taken over the family business and come to him for advice. They all speak English as their mother tongue but understand the Middle East as well, particularly the culture. It all boils down to trust, as the Middle Easterns are very sophisticated buyers and have good advisers.

We firmly believe that one of the reasons we have done well in this market is down to our heritage, the fact that we have travelled a lot, our sensibility to foreign buyers and being English almost by default because we have lived here such a long time. We have a level of sensitivity which is really important. I am hugely grateful to London for giving me what I have today – a family and a business. But at the same time, not being English has helped us grow the business the way we wanted to and believed we should.

Indeed, I look forward to when we are asked the question about our international-ness because I am quite relaxed about it: if you want international reach, you have it right here.

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Has PCL turned a corner?

All of a sudden, over the past few weeks, we have started seeing property transactions in prime central London (PCL) pick up again. At NVP, there is a sense of excitement, which we haven’t felt in quite some time. Covid is not going to go away but we are learning to live with it. In gloomier moments, we may have questioned the resilience of our Knightsbridge patch but we are reassured that the fundamentals remain and are starting to capitalise.

It is well reported that the country house market has been booming for some time, thanks to the stamp duty holiday and desire for more space, coupled with less need to be in the office every day. PCL is a different story; price growth has been negative and it is only in the first quarter of this year that the tide has turned, with price growth turning positive. We are seeing properties, some of which have sat on our books for 12 to 18 months, starting to go under offer.

Buying opportunities

With a lack of international buyers, thanks to travel restrictions brought about by the pandemic, domestic and international domestic (international buyers who reside in the UK) are taking advantage. Chelsea and Notting Hill have been performing better than Mayfair, Knightsbridge, Belgravia and St James. These last four areas have been the hardest hit and where buyers have the biggest opportunity to purchase at a substantial discount to asking prices.

There is perceived value because property prices have gone nowhere over the past seven years. Low interest rates are resulting in attractive mortgage deals for those who need, or want, to borrow. We have just completed a deal which is a case in point – the purchase of six flats in a single building on Lyall Street on behalf of a client. These flats have been on the market for three years but we secured them for just under £1,500 per square foot, which is good value for SW1X.

However, those hanging on in the hope of buying at the bottom of the market in PCL may have missed it. We are seeing transactions in Kensington & Chelsea, for example, which are not a million miles from where we were at the peak of the market, driven by a lack of stock, pent-up demand and the vaccine rollout.

Waiting in the wings

We have clients poised to return as soon as travel restrictions are lifted. In the meantime, we are acting on behalf of clients who can’t yet get here. One client bid on a flat in Cranley Gardens in South Kensington subject to being able to come and see it as soon as he can. We have been buying assets for Middle Eastern clients who haven’t come to town in the past year but who trust us to act on their behalf.

As soon as international travel resumes, we will have a good critical mass of demand, underpinned by the usual low stock. Chinese buyers have been the biggest purchasers of period freehold properties in Knightsbridge over the past few years and we believe they are set to step back in now that the currency is no longer working in their favour. Strong growth in the Chinese economy in the last quarter (18.3 per cent), coupled with continued pressure and restrictions from mainland China in Hong Kong, will also persuade them to return in force to buy in PCL and Knightsbridge in particular.

While stock levels remain low, we have earned some good instructions on some important properties recently and have interesting stock coming to market. We were recently instructed on an incredible flat in Ennismore Gardens; the vendor said that while the numbers we gave him made sense, it was the passion and excitement we both bring that was the deciding factor. It is good to know that is still in evidence six years after we first set up NVP.

Post-pandemic living: blip or permanent shift?

In PCL, flats have carried a premium compared with houses for a while, with the latter proving to be much better value. Yet lockdown has meant that demand for houses with big gardens has risen, although this is more of a feature for those buying across prime London, in Putney, Richmond, Barnes and Clapham, than PCL. The desire to have a garden or work from home may well be a lasting effect of the pandemic but we believe the popularity of flats will return as the young, who mostly can’t afford or need large houses, prefer to live in cities.

International buyers, who use London as one stop among their global destinations, neither want nor need a big house. They like the concierge, gym and underground parking that comes with their flat and that won’t change. For foreigners who have made the UK their home, and have done for many years, they are highly unlikely to move to say, Hampshire. For them, it may be lovely for a weekend but a permanent move is not on the cards.

Indeed, our experience is that the direction of traffic is the other way, with people in the country looking to step back into London, wanting a smaller place to complement their larger country property. We had a call from a client earlier this year who did just that; despite the UK being in lockdown, he was convinced it was a good time to buy. We viewed several flats in January and February before securing a fantastic one for him which, eight weeks down the line, we would not have been able to get for the same price. His timing was spot on.

Rental opportunities

Rents in PCL have fallen by around 15 per cent over the past year due to the lack of international tenants, so there is perceived value to be had. Those who may have rented in the periphery of prime London – for example, paying £650 per week in Clapham, can now rent just off the King’s Road for similar. However, this is unlikely to last and there will be upwards pressure on rents when international students start to return in the summer.

At NVP, it feels good to say that we are positive on PCL. With the Brexit debacle and the threat of a Corbyn government but a distant memory, and the vaccine rollout helping us get to grips with Covid, we feel the bottom of the market has been and gone. For those investing in bricks and mortar who are prepared to consider Europe as a whole, PCL remains the destination of choice for many, even if they can’t quite get here just yet.

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Reasons to be Cheerful

As we finally embark on 2021, after a pretty wretched 2020, we are feeling rather more hopeful for the year to come. Even though we have now entered another national lockdown we are extremely thankful that, as estate agents, we can continue to operate, particularly as business has been relatively good recently. In the three weeks leading up to Christmas we managed to exchange on seven properties across two deals – no mean feat when you consider that Knightsbridge was already in Tier 4, along with the rest of the capital, and both buyers bought blind without viewing.

Unusually for us, given that we are mostly known for selling Knightsbridge property, these deals were both purchases on behalf of clients. The first was a house with a triple-A address in Ennismore Mews. Originally marketed at £3.6m, it hadn’t seen much activity so the seller was advised by his agent to lower the price to £3m. This generated interest and our client, an American who knew the address and recognised a great mews on a great street, ended up offering £250k more than the reduced price. If a property looks fair, or good, value in a triple-A address, then there will be those prepared to do that deal.

The other purchase was of six flats in one house in Hans Place, SW1 – again, for a Saudi client who hadn’t seen them as he is based in the Middle East and not able to travel because of the pandemic. He paid just over £11m, working out at just over £1,500 a square foot. He knew he was getting good value with a yield of above 3 per cent, and was prepared to buy blind, and move quickly, because of that. Tellingly, our offer wasn’t the highest – there was another offer on the table which was £750,000 higher – but if you are value-driven you need to have all your ducks in a row. We were able to back up our offer with proof of funds (in cash), a solicitor able to confirm instruction and a 10 per cent deposit lodged with the solicitor within a week.

Both deals confirm what we always say at NVP – that you can never undersell if you market something correctly. To sell in this market you have to be realistic. There are so many data points that buyers know when something looks good value – and equally, when it doesn’t. These sales also show that the end of the year is a good time to step in and do a deal. Vendors may well have become fed up with a property that has languished on the market all year and want to start the new year with a clean slate.

A theme we are repeatedly hearing is that clients, who may be in the fortunate position of sitting on a lot of cash, would prefer to invest that money in tangible assets such as property. Banks will only protect your savings to a certain level, while the other advantage of bricks and mortar is you may also get a good yield, depending on where you invest.  

The prime and country markets enjoyed record results last year – PCL is very different as it is reliant on foreign money. If anything, the pandemic has proved that more than ever. But there is still a strong belief in London in the long term and many clients want at least one home in the capital. We have clients looking for family homes in Knightsbridge, Mayfair and Belgravia with a garden in the £15m to £20m bracket – these are buyers who are obviously clued up and still want to invest in London.

With a Brexit deal finally agreed, and given that property prices in PCL have gone nowhere in the past six years, London is looking fair value and hopefully a more stable place to invest in the long term. We saw early signs of a willingness to buy following the Boris Bounce, before Covid hit and international travel halted. With the extra 2 per cent stamp duty coming in for non-residents in April, we could see a pick-up in activity before then.

Despite the pandemic having thrown another spanner in the works, we hope for an uptick in activity from March onwards, if travel returns; if not, it will happen by the summer. But the main thing to focus on, of course, is that the vaccines are here and we are not in the position we were in earlier last year. That is certainly something to be grateful for.

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How landlords can help their rental property succeed

By Alice Umfreville, lettings manager, Nicolas Van Patrick

Lettings are encouragingly busy. September tends to see a rush of people doing quick moves but we were unsure as to what to expect this year because of the pandemic. However, on the positive side, there have been plenty of viewings and deals to be done. From what we are seeing, Covid – 19 has had far less of an impact on our market than Brexit – at least so far.

It’s not an easy market though, and it is price-sensitive. Valuing can be frustrating, now more than ever, but it is fairly predictable too – if we are asked to value a property, and we know the landlord is getting other agents in as well, without fail we can forecast which one(s) will be guilty of over-valuing. A good letting agent should not be over-valuing property at any time – and in this market, it is particularly unwise when there is so much uncertainty and so much property available. Doing so has a two-fold impact; it often takes longer to let and achieves lower rent levels than if the property were to come on at the correct price in the first instance. And it misguides applicants into thinking that every landlord will accept ridiculous price reductions because they’ve seen something at an over-inflated price and been advised the landlord is open to dramatic offers.

At Nicolas Van Patrick, we pride ourselves on being upfront with our clients as to what we think price-wise. We are able to back up our pricing so that tenants feel comfortable that they are paying the right amount. While we have seen more property come to market since lockdown measures eased, we have priced these accordingly. If any adjustments have been necessary on properties already on the market, then we have worked carefully with our clients to bring the rent levels in line.

When lockdown first took hold, we saw some tenancies come to an end as a fraction of international tenants repatriated whilst they were still able to. Many of the properties that returned to market were within the sub-£1,000 a week bracket. Generally, in the areas we cover, a large percentage of this market is dominated by international students – many of which have no plans to return to the UK. Having said that, in the last month we have arranged a number of tenancies for international tenants from Europe, Asia, and the Ukraine. Evidently, even with so much learning going online, many students would rather be in London so they still have some element of social life with their fellow students.  Interestingly the majority of these particular tenancies have been arranged through video viewings while the student has been preparing to return to London.

As we head towards winter, we may see new stock coming onto the rental market from resistant landlords. These tend to be homeowners who originally wanted to sell but because purchase prices may not be what they want to achieve, they will hold onto their property while they wait for values to improve – effectively allowing us to babysit the property with well-placed tenants.

Although there are lots of available rental properties, many are poor quality and we are certainly more selective than others when it comes to what we will bring to market. We tell landlords that not only is correct pricing vital, but if you haven’t done any work in the past three years, or two tenancies, then you probably need to and tenants expect it. It is highly likely that those looking at your property are also looking at scores of others so if it is not looking sharp, it won’t let. Landlords are often prepared to do work once they have a tenant lined up, and as part of the offer, but I would advise rather than waiting around they do the work in order to get the offer. It’s the wrong market to take the other view and we are always happy to give advice to anyone wondering how to get the best from their properties. Thankfully, most clients are taking this on board and spending on improvements in order to proactively help a property achieve the best price it can. Landlords can take comfort from the fact that if they get the property’s presentation and price right, there will always be a pool of people who need to rent.

Much has been said about the mass exodus from the city to the country in search of outdoor space. But when I ask tenants how important this is, most say it would be lovely to have but ultimately it wouldn’t deter them from a move. Being close to a park or green space is often enough but let’s face it, if you live in a city, useable outdoor space tends to be an anomaly, unless you have the luxury of a bigger budget. The reality is that the desire for a home office  is far higher up on people’s lists.