Author: Nic Pejacsevich

With so much uncertainty around, created firstly by the UK’s proposed departure from the European Union and latterly the general election, it is no surprise that the rental market is so strong. Many people want to retain as much flexibility as possible, preferring not to make as serious a commitment as purchasing a property, but renting while they ‘wait and see’.

Various reports into the prime lettings market have suggested that rents have strengthened this year, particularly in the £5,000-a-week bracket. The weakness of sterling means that US tenants in particular have more spending power, while stamp duty levels being what they are means that if you are renting for five years or less you would often be better off than if you had bought that property.

At Nicolas Van Patrick, we have enjoyed a record number of rental renewals recently. We put this down to our first-class property management service and lack of prime rental stock in the area. We have also recently expanded our rental offering to reflect this growth in lettings, with Alice Umfreville joining as Lettings Manager.

On joining Nicolas Van Patrick, Alice says: ‘The market is very price-sensitive but is undeniably busy. Properties which come to the market at too high a rent will sit there but landlords who are prepared to take advice on pricing and presentation are seeing a lot of interest.

‘There are particular rental brackets which are showing huge interest with not nearly enough stock to satisfy demand.

‘Our tenants are mainly European and from the Middle East, with a smattering of Americans. Many are not potential buyers at all but simply wish to rent. Many are couples, looking for a rental close to their place of work. People are thinking about the length of their commute and how much time they want to spend doing it – ideally many want to be within 10 minutes to half an hour of the office. Knightsbridge is very centrally located, of course, plus has the bonus of some good restaurants and shops. But we are finding that a short commute to work is the main draw.

‘As a boutique agency, we have the freedom to do things differently and work in the best way for our clients. There are many corporate agencies which don’t have this strong focus because they have so much red-tape to deal with.’

If you have a property sitting unlet or becoming available do let us know as we would be delighted to assist.

As autumn settles, the prime central London property market remains tricky and price sensitive. There is a continued shortage of stock and agents are clamouring for business. But at Nicolas Van Patrick we believe it is important to stick to our guns and give realistic advice to clients when it comes to pricing their home for sale, backed up by irrefutable evidence.

This practice stood us in good stead recently when we were asked to join a parade of agents to value a house in Montpelier Walk, Knightsbridge village. The owner had bought the property for £3m several years ago and it is a sign of the times that we valued it at £3.35m in the current market. Given the stamp duty the vendor paid when purchasing the property, achieving this sale price would effectively mean he was losing money. As we left, he told us that we had indeed given the lowest valuation of all the agents, so we thought we had missed out on the instruction. However, he chose to instruct us regardless because he understood that we were giving a truthful picture of the market, backed up by facts. We had been selling houses over the past few months in that area which justified our pricing – we could prove that we knew what we were talking about.

While preparing the brochure ready to launch we showed a serious buyer around who immediately made a bid below asking price. This was rejected but we were able to back up with comparisons as to why the house was worth more and following two consecutive increased bids, we agreed a deal at 2 per cent off asking price before even going live with it to the market. Contracts were exchanged within the week. 

What this demonstrates that the price your home comes to market at is essential if you are keen to move. Part of the reason for this is that when it is launched on portals such as Rightmove and Zoopla you will get the most views by potential purchasers. But also, if you over-value your home, it will sit there until buyers feel it is priced correctly. There is every chance you may not end up with as much as you would have done if you had started marketing at the correct price.

Although we are supposed to be the experts, some vendors feel they know more when it comes to their property. Or they feel that their property is special so they want to market it at a higher price than we would advise. Often, they try for a bit more because they expect buyers to negotiate downwards and they want to leave room for this. Added to this, if vendors are not in a rush to sell, they may be happy to wait to see if they achieve their desired price.

Mostly though, vendors are realising that if they overprice their property, they won’t even get a sniff from a buyer who will completely disregard their property on the basis that they are not a serious seller. Our advice is that you can never undersell a property if it is marketed properly as well-informed buyers will compete and push the price upwards, even in this tricky market.

We have been really encouraged by the positive response to the launch of our new block management service earlier this year.  We are now up and running with new blocks under management and are enjoying working with the leaseholders and freeholders to ensure the smooth running of their buildings. 

Changing the managing agent of a building can be quite a daunting task but we aim to make the process easy.  We can help coordinate with all the parties involved and deal with the administration.  There is no need to put up with poor management and the frustration that goes along with it – not to mention the potential risk this might pose to the value of a building.  Nicolas Van Patrick offer a great alternative so please don’t hesitate to get in touch if you think we might be able to help you.

What’s in store for the housing market this autumn ahead of the 31 October Brexit deadline?

As the Brexit deadline of 31 October looms, the big question as we head into autumn is what impact it will have on the housing market. Although, sadly, Nicolas Van Patrick does not possess a crystal ball, we feel that the autumn market could see both buyers and vendors holding off until there is some clarity. This is not just to do with Brexit, but also stamp duty and the threat of yet another general election – issues which have kept the property market in the doldrums since 2014.

Stamp Duty:  Most agents in PCL have reported a pickup in transactions over the last quarter, with some calling the bottom of the market. But we may still see buyers taking their foot off the gas while they wait to see whether Chancellor Sajid Javid tinkers with stamp duty, as was recently reported in the press. Such comments create uncertainty, particularly as stamp duty reforms have cost the Treasury more than £1bn in receipts, and it is understandable if buyers and vendors hold off to see if thresholds are lowered. Talk of passing stamp duty onto the seller rather than the purchaser would mean a radical overhaul to the current system, which would disrupt the market while people adjust. Although such a plan was swiftly denied by the Chancellor, a seed of doubt has been planted in people’s minds.

Brexit: With the Brexit deadline of 31 October fast approaching, and Boris Johnson asking the Queen to suspend Parliament until 14 October, this will create further jitters for the property market, with both buyers and sellers likely to hold off from doing anything unless they absolutely have to.

General Election: There is increasing speculation that the Tories will call a general election over the next few months, which will have a cooling effect while people sit back and await the outcome.

In amongst all this uncertainty, there will always be people buying and selling property because they have to, regardless of any of the above. Furthermore, we have four or five years of pent-up demand from both domestic and international buyers who are waiting to step back into the market once all the uncertainty is behind us. With sterling hitting a 10-year low against the dollar last week, and Boris Johnson’s actions in suspending Parliament sending the Pound on yet another downward spiral to $1.22, many of our clients/buyers are already doing foreign exchange trades in preparation to step into the market. Others are holding off to see if there is another drop in the exchange rate should the UK leave Europe with a hard Brexit, providing further buying opportunities.

All the above said, lack of supply and the favourable exchange rate which foreign buyers are benefitting from, means that if you are selling a trophy property, you will still get a very good price for it simply due to scarcity of quality stock. As for the rest, it needs to be heavily discounted for buyers to push the button on it now rather than sit back and wait. Once the dust settles, and not withholding any other global cataclysmic events, we see further pick-up in activity in the sales market with a hardening of prices while the supply and demand glut is satisfied. 

Lettings Market

In the second quarter of the year, scarcity of stock supported rental growth in PCL, but high levels of renewals have meant few new lets. The third quarter is usually a busy rental period as people want to be in their new home before the schools go back but we don’t see any change from Q2. Limited supply and robust demand will continue to underpin increases in achieved rents.

There is further upwards pressure on rents thanks to the Tenancy Fee Ban, which came in on 1 June. With agents and landlords not able to pass on many of the costs associated with renting property to the tenant, such as referencing, check-in, contracts and more, some landlords have passed these onto the tenant by increasing the rent.

While there is still so much uncertainty, what is clear is that this autumn is likely to be one full of twists and turns for the housing market.

John Fentener van Vlissingen knows a good investment when he sees one. Olivia Sharpe speaks to the Dutch billionaire, who two years ago invested in new London boutique estate agency, Nicolas Van Patrick.

There is no denying that the UK’s property market is topsy-turvy at the moment. With buy-to-let jitters, the weakening pound and the looming threat of Brexit, all UK estate agencies can do is sit and wait until the EU referendum on 23 June. And yet, you wouldn’t know of this uncertain climate at Nicolas Van Patrick.

Two years on from setting up their independent estate agency on Knightsbridge’s Montpelier Street and the property duo is thriving, continuing to sell, let and acquire properties in Kensington, Chelsea, Knightsbridge, Belgravia and parts of Mayfair for clients in spite of these turbulent times. One person they have to thank for this is Dutch businessman (and incidentally one of the wealthiest men in the Netherlands), John Fentener van Vlissingen – who, you may have surmised, puts the ‘Van’ in Nicolas Van Patrick.

Dressed in a sharp tailored suit, the shrewd septuagenarian shows no signs of slowing down, despite the fact that rumours of his retirement have been circulating. While he’s softly spoken and jovial, there is a forthrightness in his manner that makes one instantly pay attention for when it comes to real estate, this is by no means new territory to him.

John is the founder and owner of BCD Travel (formerly BCD Holdings), which today is the third largest business travel company in the world, but when it initially started out in 1975 it was a real estate company. It wasn’t until 1987 that it purchased WorldTravel Advisors. This then merged with BTI Americas in 1999 to form WorldTravel BTI, before eventually being renamed BCD Travel in 2006. John has therefore been investing in global real estate for more than four decades. However, he admits that backing Nicolas Van Patrick was his first significant London property investment for many years. “Although in the old days I was a big investor here, I was involved more in office buildings, which we later sold on,” he comments.

The son of an English mother, John has many ties to the UK. He arrived in England straight after the war at the age of seven and attended boarding school. He then studied in London and reminisces how he used to live on Chelsea’s smart and fashionable Tite Street. “It sounds glamorous, but in reality we were five men sharing one bathroom,” he says, smiling. “I remember there was no central heating, just a gas stove which you would have to put shillings in at night otherwise it would be freezing.” Although he still lives close by to his old student digs, you can be sure that it’s a much grander affair.

John inherited his business acumen from his forefathers. His grandfather ran shV Holdings, the Netherlands-based energy company, which John’s father successfully diversified following the collapse of the coal market. However, John did not immediately follow in his family’s footsteps and instead went to work in Wall Street before founding his own business empire.

The investor understands better than most the blood, sweat and tears of setting up one’s own business and this is no doubt what attracted him to Nicolas Van Patrick. Indeed, his introduction to the founders proved serendipitous. Meeting the pair by chance in one of their competitor’s offices, John was immediately struck by Nicolas Pejacsevich’s unusual surname, it being the same as a former client of his when he worked in banking. The three got to talking and it didn’t take much before they convinced John to get on board with their concept of a boutique London estate agency, having 40 years’ combined experience in the property industry (not to mention fluency in six languages).

As an entrepreneur, John is clearly not risk adverse, but did he still have to muster up some Dutch courage to invest in London’s unstable property market? “No, not at all,” he answers, simply. “I agree that the market is pretty dull at the moment, but I am a long-term investor. London is very much an international city with international people coming in.” But what if the vote goes in favour of Brexit this June? “I really don’t find that so important,” he responds. “The market could go further down depending on the votes, but this won’t have a long-term impact. All of London’s attractions won’t just walk away.”

John also argues that the UK’s political stability and the fact that English is the people’s first language makes it a universally appealing place for international investors. This opinion is very much shared by the property duo. “There’s still an enormous amount of liquidity in the system and people look to a place like London for its stability, flexibility and anonymity,” says Patrick.

Nicolas and Patrick have found that some good can come out of such uncertain times. After the Lehman Brothers collapse in 2009, for instance, overseas clients in the US and Europe took advantage of the weaker pound, and they have found this to be the case again. The pair has had to weather the storm somewhat, but for John, he believes this to be a good thing because only in times of adversity can businesses truly prove their strength.

Although there is an old myth that one’s emotions should never play a hand in business, John does not go by this philosophy. “In my life I have been a really good buyer and a really bad seller,” he says. “Because I love my business and I want to see it get bigger. I know it’s about numbers, but that’s not the only thing. You need to have some emotional attachment to it.” This is no doubt why he gets on so well with Nicolas and Patrick. “We love coming to work,” says Nicolas. “It has been a tough time in this area, but it has meant that we’ve got to learn about other sides of our business, such as lettings, which is now flourishing and expanding.”

Patrick believes that the way the market is currently going, mid-level agencies will struggle as they are bought out by larger companies and so what will be left is the big agencies and smaller boutiques. They are therefore adamant that no matter how much money was hypothetically thrown at them, they would never accept going back to work for a bigger company because for them it is about offering a personal, tailor-made service. For John, this was the other major factor that attracted him to the idea of a boutique agency: “There is more service and it’s more direct. You see the same in the banking world where you’re treated as number three instead of a client. Here you can get the service that you need and I like that.”

This personal approach directly relates to the Royal Borough in which Nicolas Van Patrick primarily operates. With its community feel and anonymity, it surpasses all other areas in London for John. “I always like a view and I know that’s a luxury, but if you look at Chelsea you have such wonderful greenness. Take the King’s Road with all of its small, independent shops. It’s still got a personalised feel and it’s a nice neighbourhood to walk around in.” This idyllic picture of the capital is certainly an apt description and one that John insists will never change. As he simply puts it, “London will stay London.” Amen to that.

New to the block but old hands in the industry, Nicolas Pejacsevich and Patrick Alvarado, settle into their latest roles as founders of boutique London estate agents Nicolas Van Patrick, based in Knightsbridge. Hannah Lemon reports.

Nicolas Pejacsevich and Patrick Alvarado can’t help but tease and cajole each other. They are having their pictures taken and fluidly chop and change between Spanish and English. Patrick jokes in a crisp London accent, “Is this my good side?” while Nic retorts with something in Spanish; it’s much like following the in-jokes of a married couple. This is all part of the relaxed charm of their new venture – independent estate agents Nicolas Van Patrick – and a by-product of a successful 15-year career and partnership within the property industry.

Despite the international repartee, they are Londoners through and through. Patrick was raised in Knightsbridge, attending school in the area, and Nic, who was born in South America, has been here for the last 20 years. I ask who the ‘Van’ in the company name alludes to but they are reluctant to reveal any details, although, Patrick does vaguely divulge that the word pays homage to their investor who is from one of the most powerful corporate Dutch dynasties.

Nic and Patrick met while working in the residential sector for the flagship office of one of the UK’s largest independent estate agents. “For four or five years Nic was the number one earner,” says Patrick, complimenting his business partner. “Even in the month before he left Nic was number one. It’s nice to leave being at the top.” And their hope is that they will remain at these heady heights in Prime Central London.

Although they were previously employed by a large brand, Nic and Patrick managed to work fairly independently and so it seems like a natural progression for them to start their own company. They launched Nicolas Van Patrick in September last year wanting to invest in a future for both their families. “We waited a while before making the jump but we had been aiming towards it for quite a while. I was a little wild growing up but as I’ve grown older I have become more mature and responsible,” laughs Nic, as I glance down at the leather bracelets he still wears, a hint at this former life perhaps. “I was ready for the challenge. It is a calculated risk and in a very competitive market, but when the opportunity came along we couldn’t say no.”

The risk seems to be paying off, despite the uneasy market in the lead up to the election. To date they have already sold, let and acquired several properties for clients and continue to do so. Their plan is to turn this boutique into a million pound office by year three. “We are ahead of schedule with our first year target earnings,” says Patrick. They have Kensington, Chelsea, Knightsbridge and parts of Mayfair at their fingertips and the added bonus that they are not limited to working in a particular ‘patch’.

There is no denying that they have a good pitch for the office; it is near Knightsbridge Underground and in the heart of prime property prices. Undoubtedly, this comes with competition but Nic and Patrick use this to their advantage. “We can offer fees to other agents,” Nic informs me. We can be much more pragmatic and flexible with the way we share our business.” They also rely on clients choosing them as people, rather than buying into a brand. “Obviously there is competition but we believe it’s our personalities that will eventually win us new clients. We can offer something different and we feel – without wanting to sound arrogant – that we can give our time,” adds Nic.

Their unique selling point, if you will, is that they match the demographic that they are selling to: established international businessmen. Between them they speak five languages: Spanish, French, English, Italian and German. “This has helped us with international clients as they can relate to us and we can relate to them,” says Nic. And with the changing face of the buyer over the last decade from domestic to international, their timing couldn’t be more apt. “There were so many Italian buyers, especially after Lehman Brothers crashed and the sterling collapsed. There was a huge exodus of wealth,” explains Nic. Now they predict that the Swiss and the Greeks will be the next to land on our shores.

Business sounds steady, but have they considered that they might be stuck in a ‘honeymoon’ period? With only two on the team, do they have enough man power or expert knowledge to cover all areas? “I think we have to really take a lot on for me to say I can’t do it,” comments Nic. Although, with the upcoming election they have recruited one additional member to head up the lettings department. “With the election in May, we all know notoriously that people put their foot on the brakes until they get clarity,” says Patrick. “What normally happens is that when one switches off, the lettings market switches on. I was reading yesterday that for the first time, rental values and Prime Central London have outstripped the peak of 2008. Although,”he adds with a smile, “we already knew this was going to happen.”

Patrick describes the company as the bellwether of the property market, which looks to stand them in good stead for a healthy first year. “Everything sells, it’s just at what price,” he explains. “London takes more property taxes than anywhere else in the world but that hasn’t put any investors off.” There is also the added bonus that “people feel safe parking their money in Prime Central London. The capital appreciation is second to none,” continues Patrick. The only concern the duo list is if the UK leaves the
European Union. “But we can’t afford to be complacent or negative,” chimes Nic. “We have time to think and work smart.”

Do they work well together? Once again Nic and Patrick erupt into laughter while listing the humorous interactions of a normal day in the office; it is obvious that they have reached the ideal combination of old friends and business partners. “We’ve created a fun and dynamic environment,” says Nic. “The energy and enthusiasm comes across and people buy into that.”