ANYONE FOR TENNIS?

In the current environment prospective buyers would do well to remember the well-worn sporting adage; form is temporary, class is permanent, explains Lucian Cook, director of Savills Research

Over the next fortnight around 520,000 fans will descend upon the All England Club to watch the tennis at Wimbledon. In the process they will consume 38.4 tonnes of strawberries and drink 29,000 bottles of champagne.

There is seemingly a rich and resilient seam of demand for the world’s most prestigious tennis tournament. Given an uncertain economic outlook, a series of tax changes at the last budget and concerns over what is to come, the same cannot currently be said of the demand for properties at the top end of the UK housing market.

Put simply, while corks are being popped in SW19, the fizz has gone out of the prime housing market. Indeed our prime property indices show that since September 2022, when Liz Truss arguably double faulted on break point, the value of prime properties across London has fallen by 2.8 per cent, while in the country values are down by 8.8 per cent.

Trouble on centre court

The London price adjustment has been driven by a 5.3 per cent fall in the central London postcodes, as the recent abolition of non-dom tax status and the increase in the stamp duty surcharges have meant a shallower pool of increasingly cost-conscious buyers. That leaves prices in the prime central London market 22.4 per cent below their June 2014 peak.

Recently there have been more encouraging reports that Chancellor Rachel Reeves is reconsidering bringing the global wealth of many of those non-doms into the ambit of Inheritance Tax. And heightened levels of geopolitical uncertainty should provide a timely reminder of London’s safe haven credentials.

But still, the odds of a sharp recovery in values of the best properties in the likes of Mayfair, Marylebone, Kensington and Knightsbridge are broadly comparable to those of a British clean sweep in the men’s and women’s singles (and, in all likelihood, the mixed doubles to boot).

And yet, you wouldn’t bet against eventually looking back and viewing 2025 as a good buying opportunity. This highly exclusive market has certainly become more accessible to different types of buyers. Our deal book shows that domestic main residence buyers are now taking a bigger slice of a smaller pie.

Heading down to SW19

If you shift your attention to the South West London wealth corridor (of which Wimbledon is part) the picture changes. Here, the addition of VAT on private school fees will have been of more concern to buyers and sellers than other tax changes.

And while this part of the market has not been immune to tax concerns, they have been tempered by the relative stability seen in the mortgage markets over the past 18 months. And so, with a return to the office prompting a reassessment of the costs and practicalities of commuting from further afield, demand and prices have proved more resilient.

While prices eased back by 0.2% in the three months to the end of June, this follows five preceding quarters of price stability or modest growth in the belt of high-value housing that runs from Fulham to the home of grass court tennis. That means prices are, on average, pretty much where they were a year ago, though the family house market has performed slightly more strongly than the market for flats.

Meanwhile on the outside courts

The fortunes of the prime regional and country house markets have swung much more wildly over the past five years. Much like the appearance of Tim Henman or Andy Murray on the show courts, the race for space and dash to the countryside that followed the pandemic are becoming something of a distant memory.

Prices, which rose dramatically in the wake of lockdown and then fell back as interest rates rose, have struggled to stage the spirited and dramatic comeback so often seen by a British hopeful on Court 16. That leaves us with, what is perhaps best described, as a price-sensitive, buyers’ market.

Dropping down the rankings

It is one which presents significant opportunities for those in the market for a country house or a coastal bolthole in particular. Here, motivated buyers are thin on the ground, despite the market serving up a substantial discount compared to the heady days of the mini housing market boom.

Seemingly having gone from a tournament favourite to a wildcard, the prime country house market has seen prices fall by 6.2 per cent in the past year and by 11.6 per cent since its mid-2022 zenith.

Meanwhile, in the prime coastal markets increases in the council tax and stamp duty paid on a second home have awkwardly coincided with underlying changes in the other market drivers which have played against discretionary purchases. Prices here are down by 6.7 per cent in the past year and 15.7 per cent since their peak of almost three years ago.

In both of these markets buyers have more choice and less competition, though sellers' price expectations will still often present a challenge to getting a deal over the line.

Time to enter the ballot

Contrast all of that, if you will, with estimates that the public ballot for Wimbledon is ten times over-subscribed. Indeed at the time of putting pen to paper, the cost of a Centre Court ticket on day one of the championship on the ticketing website StubHub was £2,952. For the day of the men’s final, it was £10,845.

Whatever the attraction, those sorts of prices will put some people off. You can’t apply the same logic to the prime housing market right now.

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