From where we stand, looking at the upper end of the property market, there has been no slowing down of demand. On the contrary, we have been busier than ever.
What is clear to us is that the geographical span of the global wealthy has shrunk thanks to the heightened state of volatility around the world. Whereas once there might have been up to 15 locations where families would look to buy or live, that is now down to a small handful.
Hong Kong is no longer a protagonist on the map, including for some Americans who regard it as an extension of China.
And although Paris still appeals to Middle Eastern families, it is not considered as widely desirable as it once was. Recent upticks in crime have damaged her reputation. New York is an interesting case: while it is on the list for international buyers, domestically, the Big Apple has lost out to an exodus of wealth to Florida, Texas and Colorado.
Italy’s golden visa has been very successful. But it is London and the southeast of England that hold a pole position among the international wealthy, regardless of the near-constant navel-bashing that goes on within the country about the impact of Brexit or the state of Westminster.
There are two more changes we can clearly see post-Covid that impact the top-end market. One is that the rich are buying more houses: they might be slightly smaller than before, but there is a drive to own more homes worldwide. The second is that they are spending more time in each of them, living and working for months at a time at their villa in Mustique or on their superyacht rather than just going for holidays.
Outstanding service is critical and increasingly hard to find. RedBook’s value to clients will always lie in offering unbiased expertise and a client-first focus. This year, this mission has resulted in several successful business engagements and partnerships including with UBS, Goldman Sachs, leading international property developers and family offices.
Ultimately, our clients tell us where we are needed—as a business, we follow where they go. Demand for our services overseas has come from the Far East, the Alps, the Mediterranean sunbelt and the US. We have had a significant increase of projects involving clients from the Middle East with a foothold in the UK. The RedBook service—our ability to bring together and conduct the full orchestra of professionals required to work on a property project—resonates particularly well with this market, and they now make up 10% of our base.
In the UK, we are undertaking some significant projects in the countryside, where the rippling effects of lockdown are still being felt with families wanting to spend more time together at home. Where we can really have an impact is for those clients who have bought themselves a large, listed property and want to renovate. Many wealthy clients from the Far East are doing just that, despite already knowing the challenges of our near-broken planning system. Here, of course, our expertise can help and smooth the way.
One of the biggest challenges I see ahead in London is the impact of Westminster Council banning the building of any new apartments larger than 2,000 sq ft. While there are some large units in the pipeline which were planned before this rule came in, they are running out.
Some buyers are looking further out to find the right property. The rest of the central London housing stock is made up of houses that have limited appeal to the global elite. Not only are the layouts less attractive to those used to living in lateral space, but the vast majority currently fail to meet many of the environmental targets that many feel will be next on the Government’s list to penalise. Here, again, RedBook can assist—we work with a growing number of Partners with the expertise and know-how to recast Georgian or Victorian properties into low-carbon homes.
As a team, we are also growing our ability to help clients beyond the residential market by expanding into the commercial property and hotel investment sectors. The latter is particularly of interest to clients who are keen to invest yet the industry is sorely lacking in a one-stop-shop advisory service when it comes to renovations and refurbishments. As an agile and proactive business, we can adapt to these market drivers.
2024 has one more exciting development to mention: the imminent launch of the RedBook Luxury Property Index. I do not doubt that this industry-first data platform, which benchmarks project costs against a specialised industry standard along with fascinating market insights and trends, will become an invaluable resource for anyone interested in the top-end property market.