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Savills Kensington Home Truths
Thursday 2 July 2020
Welcome and thank you for joining.
You are on mute for the duration of the webinar.
We will begin shortly.
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Welcome
Phillipa Dalby-WelshCo-Head of Prime Central
London Residential [email protected]
07870 999 117
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Lucian CookHead of Residential
[email protected]
07967 555 418
Pete Bevan Head of Kensington
[email protected]
07770 017 076
Louise GoodHead of Kensington
[email protected]
07807 999 581
mailto:[email protected]:[email protected]:[email protected]:[email protected]
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Q&A/Panel Discussion
Lucian Cook
Head of Residential Research
[email protected] 555 418
Pete Bevan
Head of Kensington Sales
Louise Good
Head of Kensington Lettings
Jonathan Hewlett
Head of London Residential
[email protected] 555 626
Ed Lewis
Head of London Res Dev [email protected]
07967 555 627
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[email protected] 999 58107770 017 076
[email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]
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4
Lucian Cook, Head of UK Residential Research, Savills2nd July
2020
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A market heavily affected by politics and taxation since
2014
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The position pre-Covid
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6
Central London values were 20% below 2014 levels
Values of prime flats in Kensington were 26% below peak
Values of prime houses in Kensington were 14% below peak
There was a strong currency play for US$ based buyers
The market was “overdue” a recovery
Total buy, sell & hold costs were competitive despite high
SDLT
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A less aggressive recovery in agreed sales
Source: TwentyCI, Savills 7
89% 104% 94% 121% 125% 158% 112% 28% 40% 135% 29% 49% 57% 117%
131% 148% 148%
97%
79%
100% 98%110%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
Jun-20 w/e 17May
w/e 24May
w/e 31May
w/e 07June
w/e 14June
w/e 21June
w/e 28June
v sa
me
mon
th la
st y
ear
Properties marked as Sold Subject to ContractAll £1m+ Sales UK
London £2m+All Prime Central London
Q2 2020
-1.1%Flats
-1.3% Houses
Kensington Q2 2020
-1.4%Flats
-0.9%Houses
The position since-Covid
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Source: Land Registry, Savills 8
Market Profile
55% 51%
21%
0%
20%
40%
60%
80%
100%
Under £3m £3m - £5m £5m+Pe
rcen
tage
of p
urch
aser
s by
pric
e ba
nd
Buyer Nationality – Kensington & Notting HillLatin America
ChinaNorth Africa and the Middle East AfricaEastern Europe and The
CIS South Asian sub-continentNorth America Pacific AsiaWestern
Europe including Nordic Countries UK
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The practical implications of lockdown
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Meanwhile in the prime rental market
Source: Savills 10
Significant influx of stock from the short
term letting market
Continued demand from needs based tenants but….
With additional new build
supply in some locations
Low levels of corporate and
student demand
especially from overseas
Prime Central London Rents
-2.8% in the quarter
-2.2% year on year
Prime Kensington
Rents
-1.5% in the quarter
-1.2%year on year
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The wealth effect
Source: Yahoo Finance 11
16,000
17,500
19,000
20,500
22,000
23,500
25,000
5,000
5,500
6,000
6,500
7,000
7,500
8,000
Nik
kei 2
25
FTSE
100
StocksFTSE Nikkei
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
10
20
30
40
50
60
70
Gol
d U
S$)
Oil
(US$
per
bar
rel)
Commodities (US$)Oil Gold
The outlook
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12
New applicant levels are building
Source:Savills
0%
50%
100%
150%
12/0
1/20
20
19/0
1/20
20
26/0
1/20
20
02/0
2/20
20
09/0
2/20
20
16/0
2/20
20
23/0
2/20
20
01/0
3/20
20
08/0
3/20
20
15/0
3/20
20
22/0
3/20
20
29/0
3/20
20
05/0
4/20
20
12/0
4/20
20
19/0
4/20
20
26/0
4/20
20
03/0
5/20
20
10/0
5/20
20
17/0
5/20
20
24/0
5/20
20
31/0
5/20
20
07/0
6/20
20
14/0
6/20
20
21/0
6/20
20
28/0
6/20
20Reg
iste
red
Appl
ican
ts v
10
wee
ks p
re c
risis
Week ending
Prime Central London Other Prime London Prime Country
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UK v Global Economic Forecasts
Source: Oxford Economics 13
-12.00%
-9.00%
-6.00%
-3.00%
0.00%
3.00%
6.00%
9.00%
12.00%
2007
2008
2009
2010
2011
2012
2013
2004
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Rea
l GD
P gr
owth
UK GDP UK£ Global GDP US$
0% 5% 10% 15% 20% 25% 30%
0% 5% 10% 15% 20% 25% 30%
Europe
Middle East
Americas
Africa
Asia Pacific
GDP (constant prices and exchange rate)2014-2019 2019-2024
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Prime Central London Outlook
Source: Savills
2020 2021 2022 2023 2024 5 year
Nov-19+3.0% +6.0% +4.0% +4.0% +2.0%
+20.5%
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Prime Central London Outlook
Source: Savills
2020 2021 2022 2023 2024 5 year
Nov-19+3.0% +6.0% +4.0% +4.0% +2.0%
+20.5%
June-20-2.0% +4.0% +7.0% +4.0% +2.0%
+15.7%
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Thank you
© Savills 2020
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Savills Kensington Residential Local Update
Pete Bevan – Head of SalesLouise Good – Head of Lettings
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New buyer registrations
5x
Properties available -2.3%
Viewing volumes38%
Post election bounce
Number of offers6x
Setting the scene – the start of 2020
Jan – March 2020 vs Jan – March 2019
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Case Study: Pre-lockdown
Campden Hill Square• Guide £8.25 million • 3,431 sq ft• Communal
Gardens
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Post-lockdown
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Post lockdown: June 20 vs June 2019
Volume of new buyer registrations (+252%) Volume of viewings
(+14%)
Number of available properties (-3.9%) Prices YOY (-0.7% flats /
+1.1% houses)
Number of offers received (6x higher)
Anecdotal trends:
• More activity on newly launched stock• Attempted price chips
from those u/o [generally rebuffed by sellers]• Competition on
‘best of the best’ and competitively priced properties• Busiest
activity has been in sub £3m market• £3m plus market waking up but
limited by travel restrictions• Buyers and sellers splitting
budgets for country requirements
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Case Studies: Post-lockdown
Pembroke Villas• Guide £4.5 million• 2,972 sq ft• Sealed bids
1st July
Arlie Gardens• Guide £3.25 million• 2,672 sq ft• 4 en suite
bedrooms
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DiscretionTravel• Best in class (location/architecture/finish)•
‘Right’ price• Few, if any, compromises
• Finished product as opposed to a project
• 58% of £5m+ purchasers were international in 2019
Two most significant influences on super prime…
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What’s ‘hot’
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Kensington Lettings
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25
66
66 4
The market as lockdown eased…Stock Levels
Family House Market
Rent Levels Activity Levels
What Do Tenants Want
Corporate Services
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Campden Street
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• £3,750 per week• 5 Bedrooms• 4 Bathrooms• 2 Reception Rooms•
Garden• Indoor Pool
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Holland Park Villas
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• £6,000 per week• 4 Bedrooms• 4 Bathrooms• Reception Room•
Sought after development • Swimming pool and other
facilities
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Health and safety
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Thank you
© Savills 2020
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Slide Number 1WelcomeQ&A/Panel Discussion Slide Number 4A
market heavily affected by politics and taxation since 2014Slide
Number 6A less aggressive recovery in agreed salesMarket ProfileThe
practical implications of lockdownMeanwhile in the prime rental
marketThe wealth effectSlide Number 12UK v Global Economic
ForecastsSlide Number 14Slide Number 15Slide Number 16Slide Number
17Slide Number 18Slide Number 19Post-lockdownCase Studies:
Post-lockdownTwo most significant influences on super prime…Slide
Number 23Kensington LettingsSlide Number 25�Campden Street
���Holland Park Villas��Slide Number 28Slide Number 29
