London's prime property agents are braced for a surge in inquiries which “couldn’t come soon enough” after the UAE was placed on the UK's amber list for travel.
Along with fellow Gulf travellers from Bahrain and Qatar, UAE residents can now avoid an expensive and lengthy stay in a quarantine hotel. Arrivals from amber list countries need to self-isolate for 10 days but can be released after five days with a negative Covid test.
The move has been trumpeted as a much-needed boost for London's troubled tourist sector, but it will also provide a welcome fillip for the capital's premium property scene.
Alex Christian, director at Savills Private Office, told The National smoother passage between the Gulf and the UK will have a “pretty profound effect” on the market.
“We've been completely paralysed since March last year,” he said. “We can see that there is huge built-up latent demand from the Gulf … especially the UAE.”
“This is going to be a very, very positive move.”
Another prime broker, Sotheby's International Realty, felt the benefits of the UAE's amber status on Thursday morning, hours after the change.
“We actually started to see several short-term rental inquiries,” Mohamed Zaghloul of Sotheby's told The National.
He expects these rental inquiries will evolve into sales inquiries as more UAE families take summer holidays in London.
“When [UAE] families are here, they tend to spend a couple of weeks in the capital and allocate time to view properties to purchase,” he said.
Zoom a poor replacement for in-person viewings
Despite the growth in video-calling platforms such as Zoom, when it comes to purchasing premium property, the last few months have proved there is no substitute for a face-to-face meeting.
“We've been in constant contact with our clients and our buyers from the Middle East in general during the pandemic, just giving them updates on the market, updates on any properties or portfolios that could be of interest to their mandate or their criteria,” said Mr Zaghloul. “But they prefer seeing stock in person, especially period conversions and homes that they wish to occupy, as opposed to pure rental investments.”
These sentiments were echoed by Lottie Geaves, sales manager at Almacantar, developers of The National's most recent London luxury property profile — the soaring £55 million Number One Centre Point penthouse.
“Being able to host overseas buyers in person again couldn’t come soon enough,” she said.
“Whilst digital tools have proved invaluable in the last year, with [our latest development] The Bryanston, Hyde Park now reaching completion, we appreciate the desire our buyers have to see properties in real life.
“It’s only then that you can really get a sense for the views, the incredible proportions and quality in design. We know these features are popular with UAE buyers.”
Almacantar even experienced the benefit of the UAE's amber-list placement before it actually happened.
“We were seeing encouraging levels of inquiries ahead of the announcement, with buyers hedging their bets and booking viewings for the coming weeks, so we expect these to increase now,” said Ms Geaves.
How the return of UAE travellers will alter the balance of London's prime property market
Savills annual quarterly growth data show that London's prime property market had staged something of a comeback since March 2020's coronavirus-induced plunge.
The resurgence was largely sparked by domestic buyers and saw London prime turf stretched from Westminster and Belgravia to West Chelsea, Kensington, Notting Hill and Holland Park.
The shift wasn't enough to knock SWI from its premium perch, but it created a few ripples in the list of London's top 10 most expensive postcodes.
Savills's Alex Christian believes the return of Gulf buyers will go some way to restoring the status quo, especially in the rental sector.
“I think [the market] will be undoubtedly be centred around Mayfair, Westminster and Belgravia, the three areas that have really suffered over the last 18 months,” he said.
Despite this prediction, it's actually the Chelsea Barracks development Mr Christian is most looking forward to showing families from the Gulf.
The ambitious project has reimagined the London townhouse and features one 930-square-metre townhouse and one 1,390-square-metre townhouse.
“They're a lot wider, they have lifts to all floors, integral parking for two to three cars, swimming pools — everything under one roof, basically,” said Mr Christian.
“I think it's going to be very interesting to see how they are received.”
The kind of luxury he is describing doesn't come cheap. The smaller townhouses are on the market for £38 million, while the larger versions are on for £55m.
Property dearth to push up prices
With tighter planning regulations rolled out across central London, luxury new-build developments could become increasingly rare. Paired with the impending surge in international demand, the “huge dearth of stock” will inevitably lead to some price inflation, Mr Christian said.
Add into the mix unfavourable changes to stamp duty for foreign buyers, increased inheritance and capital gains tax, the pandemic and Brexit, and Mr Christian is not presaging a boom in the market akin to that of the giddy years between 2007 and 2014. Mushrooming Gulf inquiries will, however, lead to a boost in sales.
“I think those that have been looking to do something for the last two or three years and didn't get the opportunity pre-pandemic will now try to trade in some shape or form,” he said.
Sotheby's Mr Zaghloul believes a beneficiary of sales congestion in the Westminster-Mayfair-Belgravia golden triangle could well be the more plentiful developments of the Battersea and Nine Elms districts of the capital.
One such “exciting development” is Embassy Gardens, situated right behind the US embassy in the shadow of London's Infinity sky pool.
“[Embassy Gardens] has proven to be very popular with the Middle East market, both for owner-occupiers and buy-to-let investors,” said Mr Zaghloul.
The coming months will paint a clearer picture of the future shape of London's prime property market — and Battersea and Nine Elms could well play a part. For now, though, the capital's brokers are content to welcome buyers from the Gulf back.