Super-prime real estate: Entering the top one percent
On the whole, economic conditions have a considerable impact on the property sector. However, when it comes to super-prime real estate, this isn’t always the case. In the most desirable areas of London’s West End, exclusivity, luxury and location are consistently the factors of highest importance.
What is super-prime real estate?
Prime real estate generally refers to the top five percent of property by value, whereas super-prime property represents the top one percent. These properties are rare and exclusive, targeted at only the wealthiest of the population.
What are the features of super-prime property?
Capital value isn’t the be-all and end-all for super-prime real estate. Features such as valet parking, concierge services, terraces or luxury interiors are also considered when it comes to defining property as super-prime.
Rent or buy?
Although the market has been stable, a shift in the approach to super-prime property has occurred in recent years. Reforms to Stamp Duty Land Tax have led to more people opting to rent instead of buy. As a result, there are now many more top-end rental properties available on the market. However, now that there is a majority government and a level of certainty has returned, people may become more willing to buy once again.
What drives the interest in super-prime real estate?
The capital has consistently been the area of choice for the internationally-mobile, due to it being central to many time zones, English-speaking, temperate and economically stable. In general, the UK also has a host of globally renowned educational institutions, which is always attractive for those wanting to ensure their children get the best education possible.
Add to this the UK’s strong legal and political systems, its status as a centre for financial services and its impressive architectural history, and it becomes clear as to why the London market is so desirable.
What about leasehold?
Some high-end buyers may be shocked by how the UK property market functions, with the majority of the properties bought and sold on a leasehold basis. The estates which control a large amount of London’s freehold interests in residential property are highly efficient at managing their portfolios. As such, preserving these portfolios is their top priority and very rarely are people given the opportunity to buy freeholds. This can lead to seemingly trivial issues being negotiated, for example the replacement of a sash window.
Fortunately, handling the freeholder is the most complex aspect of a super-prime property transaction, with the rest of the purchase functioning like any other leasehold purchase, just with higher monetary figures.
For those wishing to enter London’s super-prime property market, finding a legal adviser who has a good understanding of how to navigate it successfully is vital. Contact Simon Robinson or on 0207 264 4435 from our real estate team for further advice.
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