With the UK’s Brexit vote still playing havoc with the markets, the prospect of selling high-end London flats to wealthy Arabian Gulf investors is a much tougher prospect.
This is a challenge Charlie Walsh, a sales director at the Indian developer Lodha, faces. Lodha is building its first luxury housing scheme in London’s Lincoln’s Inn Fields and Mr Walsh arrives at Abu Dhabi’s Emirates Palace with his marketing material looking uneasy.
After all, shifting flats with prices starting at £900,000 (Dh4.4 million) for a studio at a time when the country is in flux and scouting for new leadership is a tall order.
Clutching an iPad loaded with whizzy images of the 10-storey development of 200 flats next to the Royal Courts of Justice and the London School of Economics, Mr Walsh says the planned marketing launch later this year may be put on hold because of the uncertainty.
And with UK house-builder stocks crashing by about a third after Thursday’s vote and agents predicting a fall in house prices in the UK’s capital city, investors who previously shovelled cash into London bricks and mortar may be having second thoughts.
Not so, says Mr Walsh, a veteran of Savills’ Abu Dhabi office, who, like any estate agent worth his salt, points to the benefits of this particular project.
Lincoln Square, expected to be completed in the third quarter of 2018, is certainly positioned in a part of London many consider desirable. Located within walking distance from the Royal Courts of Justice, the Royal College of Surgeons and the London School of Economics, the developer is hoping to attract wealthy students and professionals as well as the usual wealthy overseas investors.
Flats range from studios to four-beds and communal facilities include a 25-metre pool, a private dining room to seat 36, a spa and even a gym with a video display set into the walls so you can work out against a backdrop of mountain or desert scenery.
And the location in the heart of London’s midtown means few other projects are competing with Lincoln Square for buyers.
But with sales rates set at between £2,100 and £2,200 a square foot, Mr Walsh may find he has a tougher job than he originally expected.
Q&A
Lucy Barnard assesses the Brexit effect on London’s property:
How will Brexit affect London house prices?
Nobody really knows because no major country has ever left the European Union before. Before the vote, the Treasury predicted house prices could fall between 10 and 18 per cent over the next two years. JLL predicts London prices could fall between 3 and 5 per cent next year and in 2018.
How will the Brexit vote affect Middle East buyers?
Despite the predicted falls in the value of London real estate, the fall in the value of the pound immediately following the vote has made London property more affordable for anyone buying in US dollars or currencies linked to the dollar. If the pound remains close to its current exchange rate, London house prices still remain between 10 and 15 per cent more affordable than they were before the vote.
What is happening in the UK housing market right now?
In the immediate aftermath of the plebiscite, UK papers reported a wave of panic gripping buyers, which led to a number pulling out of transactions while others stalled for more time to assess the impact of Brexit on their own job security.
What about other overseas investors?
Agents say London property is likely to retain its status as a safe haven investment. Online estate agent Emoov reported a 50 per cent increase in the number of buyer registrations from China and Singapore compared with a week earlier.
lbarnard@thenational.ae
