Freebies galore as luxury house builders battle the Brexit blues
WHEN you think of a moving-in present, chances are a house plant or wine glasses spring to mind. But some of London’s luxury house developers are showering homebuyers with drastically more extravagant gifts in the wake of the Brexit vote.
Such was the case in Marylebone this month when 700 VIP guests — including members of the Abu Dhabi royal family and real-estate bosses — were invited to a launch party to view and toast developer Amazon Property’s new apartments near Regent’s Park, costing between
£3.9 million and £20 million.
The no-expense-spared bash at the restored Grade 1 listed stucco-fronted Park Crescent included cocktails, DJ sets and music from Laura Wright, one of the Queen’s favourite sopranos. It was reminiscent of giant parties seen in the bullish residential property days — in 2014, Elton John sang I’m Still Standing beneath the chimneys of Battersea Power Station to woo buyers for the luxury flats being developed in the historic landmark.
But, unlike previous lavish realestate parties, Amazon Property was showcasing more than just bricks. To boost sales and to coincide with the start of the Frieze Art Fair, it unveiled interiors dripping with works by artists including Andy Warhol, Salvador Dali and Marc Chagall. Amazon Property partner Chris Lanitis says: “If a purchaser bought an apartment from us and liked a particular piece of art which is bespoke to the apartment, then — depending on price — the piece would either be gifted as a moving-in present or, if the art work was one of the rarer and more valuable pieces, we would liaise with the art gallery to help arrange a preferential price for our purchaser.”
Residential experts believe the move by Amazon is part of a wider trend by housebuilders to give buyers more for their money in the hope of winning new customers in the subdued post-referendum market, which has also suffered from stamp duty rises. Jitters over London’s oversupply of luxury flats first emerged earlier this year.
Research by estate agent Cluttons shows by just how much prime central London prices have dropped this month — they are down 2.3% from October 2015, and the average price fell 1.5% to £2.23 million in the three months to September 30.
Figures this week from residential fund London Central Portfolio reveal that just five homes worth £10 million or higher were sold in the three months to August — an 86% slump on the same quarter last year.
As Trevor Abrahmsohn, managing director of upmarket estate agent Glentree Estates, puts it: “The sky has not fallen in since the Brexit vote but sales have certainly slowed down in a market which is oversupplied. What is happening now is that vendors are getting more adventurous, aggressive and imaginative with their selling tactics.
“It’s called disguised discounting. The market does not want to be seen
‘Vendors are getting more adventurous, aggressive and imaginative with their selling tactics’
reducing prices, so they are throwing in sweeteners to get deals over the line. It will squeeze margins but big profits will still be made regardless.”
Elsewhere in the capital, Nine Elms developer EcoWorld Ballymore is also offering customers art deals through a partnership with Frieze. At The Mews, its new-homes project at Embassy Gardens, the firm recently offered every buyer a £20,000 contribution towards contemporary artwork.
But methods to boost sales are not limited to art, says Michael Ferris, a director at JR Capital, which buys properties for Middle Eastern investors. He reveals that one of his Saudi Arabian clients was told that £200,000 of furniture from a showroom apartment would be thrown in if he bought one of the £2.5 million-plus flats in a new zone one scheme on the river. “This is because the development has a large supply of high-value unsold flats and is nearing practical completion,” he explains.
Housebuilder Mount Anvil is testing another enticement by partnering with the Aston Martin Racing team, giving homebuyers tickets and experience days at Silverstone, Le Mans and Texas.
IN Hendon, north-west London, the developer behind a new scheme where prices start from £1.6 million is offering two years of service charges, worth about £16,000, for free. Henry Pryor, an independent buying agent, points out that inducements are not completely new: “Back in the Eighties, I remember offers of skiing holidays or vouchers for places like Habitat to get deals over the line,” he says. However he agrees that sweeteners have recently become more extravagant: “Including furniture is not new, but including David Linley furniture is clever.”
The latest luxury incentives seem to be working. A fortnight after its Marylebone party, Amazon Property reveals it has since had three offers submitted for homes at the high-end scheme. Lanitis says: “The market is always cyclical and the balance always shifts backwards and forwards between the buyers’ market and sellers’ market. I believe that, even without add-ons, buyers would still want to invest in London luxury property. But while the housing market is in its present discerning mode, buyers won’t be rushed into a sale, and feel they can get away with trying to get a bit more for their money.”
But if we do have a hard Brexit, housebuilders may find they need more than just posh art and fancy dining tables to get people buying. @es_jobourke