When Covid struck, predictions for property were bleak. Putting aside the small fact that the industry ground to a total halt during lockdown, onlookers worried about the effect that a contracting economy would have on the market.
Turns out that they needn’t have. When lockdown ended, pent-up demand among aspiring movers meant things picked up where they left off and then some. And house prices have only climbed since. In fact, the last couple of years have represented the first time in modern history that London has seen prices rising during a recession (by comparison, they fell by 17.8 per cent in the aftermath of the 2008 financial crash).
But then, this is the first pandemic that we’ve had in modern history. Covid presented a unique set of circumstances where, yes, cash was tight for many. However, we also spent more time than ever at home, resetting relationships with where and how we live.
“The luxury property market is going to remain very, very strong,” says Priya Rawal, and if there is one person who knows London property, it’s her. Rawal is the founder of the Luxury Property Forum, a collective of members from all walks of the luxury property industry who come together to knowledge-share and network. “It’s important because relationships are what the industry is based upon,” says Rawal. “At the end of the day, people buy from people.”
Rawal spends her days interacting with property investors, developers, contractors, consultants, architects, interior designers, structural engineers and project managers. Her ear, in other words, is firmly to the ground. So, what is her analysis of how the last few years have transformed the market?
Up-and-coming areas gaining ground
From what Rawal has seen and heard from LPF members, prime central London is well and truly back, albeit with a few changes. Although heavy-hitters like Mayfair and Knightsbridge are ‘creeping back’, pandemic activity paved the way for ‘up-and-coming’ PCL areas like Notting Hill, Marylebone, Paddington and Bayswater.
“They have that proximity to Central London, but also, they’re slightly cheaper, so (U)HNWs are getting a lot more for their money,” says Rawal. “Marylebone and Notting Hill are further along in the process, but West London, in general, will be a real area of growth.”
Exodus to the countryside
Another frequently-discussed trend to arise from the pandemic is the so-called ‘race for space’, or ‘exodus’ to rural areas like the Cotswolds and Dorset. While this is undeniably happening, conjecture about ‘the death of the city’ is hearsay, says Rawal: “I predict that we will start to see people coming back in the next year.”
While moving away from business centres makes sense in a world where people are in the office less, it’s not quite as simple as that. “Moving to a country property sounds lovely in theory, but it’s not a decision you should take lightly,” Rawal continues. “Firstly, you’re potentially leaving behind a lot of amenities and creature comforts. Also, country properties are different – they’re often listed or heritage buildings, and may have certain laws and restrictions attached to them. The message is: do your research.”
The key going forward is flexibility. The ability to straddle town and country, and therefore travel connections, will be a big thing for buyers.
The supremacy of branded residences
Branded residences – developments managed by high-end hotels or brands – will continue to explode in popularity. London currently plays host to Twenty Grosvenor Square, which is serviced by the Four Seasons, Mayfair Park Residences in partnership with the Dorchester Collection, and the Bvlgari Private Residences, to name a few.
The hotly-anticipated OWO, the former Old War Office on Whitehall, will comprise residences by Raffles (Westminster Development Services, which is behind the project, is a member of the LPF). Also under construction is The Whiteley, the former department store in Bayswater which is joining forces with Six Senses.
“It all goes to show that, in hospitality, people want something more,” says Rawal. “They want the home-from-home feel, but also the bells and whistles that come with a five-star luxury hotel.” And buyers in this category expect nothing less than the best, explains Rawal, recalling one development that provided a full cinema experience for the children of a resident who wanted to go on a date.
Push for sustainability
Traditionally, luxury property has not been the most sustainable of industries. However, the old assumption that luxury equals waste is no longer flying with buyers, who increasingly want to know about sourcing, materials, and processes. “These new developments need to be offering something different, not just a pretty building,” says Rawal. “They have to stand out now that the world is changing and HNWs (especially the Millennial and Gen Z generations) are a lot more aware of what they’re buying into.”
“There’s going to be a massive push in terms of “building better”,” continues Rawal. “Developers are recognising that they need to be a lot more thoughtful about the sort of properties they’re building in prime central London.” Chelsea Barracks, the renovated army barracks on Chelsea Bridge Road, for example, has been awarded LEED Platinum certification, the benchmark for green building that confirms commitment to sustainability.
Sure, the pandemic has influenced supply, demand, and prices, but it has also prompted far more fundamental shifts in the property industry. Overall buyers are thinking more discerningly about what they want from a home. “Everything was put into perspective,” says Rawal. “People are living more mindfully than they ever have before.”