Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

London's biggest landowner calls time on luxury property bubble

1 Comment
London's biggest landowner calls time on luxury property bubble

The Duke of Westminster - London’s biggest property owner – has called time on the capital’s luxury housing market, selling down £240 million in top-end property to re-invest in affordable housing.

His property development business, Grosvenor Group, sold a large chunk of its Kensington and Belgravia portfolio last year, including a 19th century terrace of Belgravia homes for £115 million.

Group chief executive Mark Preston has previously voiced unease about the scale of price inflation at the top end of the London property market, describing it as ‘unsustainable’.

At the end of last year prime estate agency Savills warned that a massive expansion in the amount of luxury floor-space being constructed south of the river would test the limit of overseas demand.

‘There is a potential oversupply of homes priced between £1,000-£2,000 per square foot,’ said Savills London property development specialist Katy Warrick. According to asset manager London Central Portfolio, prime residential property in the capital has appreciated 60% since the credit crunch.

Sales by the privately-owned Grosvenor group increased revenue profit by more than 100% from £84.6 million to £175 million. The Duke of Westminster had previously been estimated to own around 300 acres of land in Mayfair and Belgravia.

‘I'm more concerned about it [high-end residential pricing] than I was last year,’ said Preston as the company released its annual results. ‘[It is] a very much a deliberate initiative on our part to capitalise on prices that we think are high.’

Anecdotally, overseas buyers, who accounted for more than 20% of prime residential sales in 2012/13 according to Savills, have shown little sign of slowing down.  

Property consultant JLL told the FT earlier this week that it had seen a marked increase in Russian and Ukrainian buyers seeking safety in London property values. 

Russian nationals spent more than £180 million on London property last year according to Savills data, with the fear of sanctions reducing the ease of capital movement adding further impetus.

Tax changes to residential property held in overseas-registered companies announced in this year’s Budget had so far not reduced their popularity, added agents  

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: the opportunities in UK challenger banks

Brewin's Gutteridge: the opportunities in UK challenger banks

In this week's podcast, Brewin Dolphin's Ben Gutteridge and Guy Foster, discuss opportunities in the global financials sector with Aptus' Johnny De La Hey.

Play Charles Tan on Woodford & hidden trust income gems

Charles Tan on Woodford & hidden trust income gems

Cantor Fitzgerald investment company analyst Charles Tan discusses Woodford Patient Capital and some of the income trusts slipping under the radar.  

Brewin's Foster: the world’s most unconventional monetary policies

Brewin's Foster: the world’s most unconventional monetary policies

In this week's podcast, Guy Foster asks why the world’s biggest economies are pursuing some of the world’s most unconventional monetary policies. 

Your Business: Cover Star Club

Profile: how Close Brothers gave power back to the regions

Profile: how Close Brothers gave power back to the regions

Almost a year into the role, Close Brothers Asset Management head of wealth management Andy Cumming has highlighted three keys areas of focus

Wealth Manager on Twitter