UK RESIDENTIAL PROPERTIES FEEL THE IMPACT OF THE ECONOMIC FALLOUT

A press release issued by Lanice Steward, MD of Anne Porter Knight Frank, which stated that top-end residential property in the prime positions of the world’s financial capitals, particularly London, had proved to be almost unaffected by the economic meltdown, has led to a number of sceptical comments from online watchers of property trends.

 This week, Steward clarified their statement, again drawing on data supplied by APKF’s associate, Knight Frank, whose headquarters are in London and close to the action.

 “Some of the readers of my statement appear to have thought that I was saying all top-end UK property has resisted the collapse – but that was not the case.  What I said was that prime CBD residential London property (e.g. in Mayfair and Knightsbridge, much of which is owned by Americans and Middle Eastern landlords) had shown almost no drop – in fact, less than 5%.”

 “The position with the other London properties is very different, Knight Frank report that outer London areas fell by over 15% in the last year while urban residential properties in most of the UK have fallen by well over 30% - and, it is said, continue to decline.”

 Jon Neale, Head of Development Research at Knight Frank, has, said Steward, also highlighted the plight of developers in the UK.  He calculated that over 60% of UK developments not yet launched are now on hold, in many cases because banks have frozen their assets pending the emergence of a clearer picture of the economy.  Many developers, he said, are now selling sites to raise cash and bolster their balance sheets.

 As in SA, said Steward, speculators with cash are now on the hunt for the bargain buys being offloaded by investors and developers, often at below 50% of their former value: 21% of buyers, Neale has said, are now speculators.

 Neale, says Steward, expects a further across-the-board value drop of 10% in the next 12 months but believes that the territories which have seen the biggest drops (e.g. Yorkshire) will also see the earliest and most dramatic recoveries.

 “As I have pointed out before,” said Steward, “that small group of buyers with a yen for a UK or French rural retreat should buy now.  The KF Development Land Index shows price drops of over 40% in the North-West Scotland, Yorkshire and the Humber, while in the Bordeaux area centuries old vineyards can be had for R200 000 per hectare.”

For further information contact Lanice Steward on 021 671 9120 or email lanice@anneporter.co.za.