How To Buy A Luxury Property 

Jeremy is the go-to agent for discerning buyers and sellers in London’s leafy Hampstead, home to literati, glitterati, and intelligentsia for centuries.  

Jeremy shares his insider tips with us. 

The best locations in London  

Wealthy national and international buyers have historically chosen to buy high end luxury real estate in specific areas of London, such as Mayfair, Knightsbridge, Kensington, St James’s, St Johns Wood, Hampstead and more latterly Marylebone.  

These areas are popular thanks to their proximity to the best and most prestigious shops, high fashion boutiques, restaurants, bars, hotels, beautiful green spaces like Hyde Park, Regents Park and Hampstead Heath, as well as easy access to Heathrow and City Airport.  

On top of which, these areas offer some of the most striking and beautiful properties in the capital, from mansions to luxury apartments with breath-taking views over London. The capital is still viewed as one of the two greatest mega cities in the world alongside New York. 

Freehold vs Leasehold  

In most cases I advise buyers to purchase a freehold property whenever possible, but if they’re looking for an apartment, the property would usually be a leasehold.  

I tend to advise that the tenure of the lease is more than at least 60 years. Anything less than that is seen to be short for the London and could attract a substantial premium to the freeholder if a lease extension were to be negotiated at a later date. However, in properties owned by prestigious estates like the Crown Estate, Cadogan Estate, Howard De Walden Estate and Grosvenor Estate, we frequently see leases shorter than thirty years. In these cases, it may well be worth engaging in a discussion to extend the lease, since the ultimate capital value of these properties in these prime areas, based on historical performance year on year, will pay dividends even if you have to pay a substantial premium for the lease extension.  

  

Bidding Wars 

I spend a lot of time coaching buyers about price. What tends to come up often is the ‘ouch factor’ – how much will it hurt you to pay that little bit more for your dream home over and above a competitor? You only get one chance to buy that special home, and special homes in London can be few and far between, chased by special buyers from all over the world. Don’t worry if it does hurt, because property prices in the capital increase aggressively compared to anywhere else in the country. In a steady or rising market, the value of your home can go up by 10% every eighteen months.  

We often see cases in which the initial under-bidder approaches the new owner they lost out to with a greater premium just a few months after possession. Remember, in difficult markets real estate reigns supreme - even over gold and government bonds. And if prices do take a 5% - 10% knock, it has been proven time and again that prime London property is remarkably resilient. Historically it always bounces back, usually by 10% - 15% in a very short period.  

  

Working with Experts: Choose Negotiators Wisely   

Sophisticated buyers, spending millions of pounds, need to work with sophisticated agents: worldly people who are used to dealing with buyers and sellers at the top end of the market. Look for agents who can provide an informed, knowledgeable and considered service. Someone who has a keen understanding needs and expectations of buyers trading at the top of their game. These agents also need a cool head to see last the course in negotiations.  

Sometimes buyers demand around-the-clock service. Agents servicing prime residential buyers and sellers are expected on-call: ready with suggestions, options, comfort and the ability to act quickly on their feet if the need arises.  

A lot of life experience goes a long way in creating working relationships and a sense of trust with people who are looking to make a very substantial capital investment which could be in the tens of millions of pounds.  

So, pick your agent carefully and make sure you feel comfortable and happy working with them. There are too many ‘Jonny come lately’s’ out there promising a lot but delivering very little. Spend time with an agent and get a feel for their experience and market knowledge. 

  

Experienced Solicitors 

Added to this, it’s imperative to use a good firm of solicitors, grounded in high end real estate acquisitions.  

Legal teams at this end of the market need a clear understanding and knowledge of wealth management and taxation. The level of Stamp Duty and other associated tariffs can have a meaningful impact on what a buyer - particularly an international buyer who owns secondary properties - pays in tax.  

It may be that the buyer is purchasing a home in their name, or the purchase may be made in a company name. The correct AML will be required by the real estate agent and the appointed solicitor acting for the buyer, so it’s vital that the buyer has their finance in order prior to engaging in a purchase.