Buying agency Black Brick celebrated a record year in 2016, tripling its turnover to GBP3million. The company attributes its success to buyers seeking honest, impartial advice, about where best to invest their money during a time of market uncertainty in London.
The average purchase price in 2016 was GBP6.8 million, while, despite the uncertainty surrounding Brexit, the average purchase price so far in 2017 is GBP4.4 million.
Camilla Dell, Managing Partner at Black Brick, says: “We are delighted to have achieved record growth in 2016. Those looking to buy a London property have been left confused as they try to evaluate the best timing, location and investment opportunities available. This, combined with the range of ways to buy such as off-market, via an estate agent, online and at auction, along with market uncertainty, has driven discerning buyers to us, as we are able to advise them and ensure that they make the right investment decision.”
2017 has seen similar success for Black Brick, with the company already reaching its predicted targets, just four months into its new financial year and whilst market uncertainty continues, the company anticipates its growth to continue as many try to navigate the London property market.
Fifty seven per cent of transactions undertaken by Black Brick in 2017 have been by those intending to use their residence as a primary home; a figure which has almost doubled when compared with the previous year, which saw 29 per cent of properties bought for the same purpose. Fourteen per cent of properties purchased in 2017 were to be used as a secondary home, a considerable reduction when compared with 2016, which saw 47 per cent of properties purchased for this reason. This drop in people buying second homes is contributed Stamp Duty Land Tax and the additional 3 per cent in tax which people have to spend on a second home or buy to let.
Dell adds: “Brexit is expected to take up to five years to fully transition and stamp duty has caused a reduction in transactions in prime central London. Those who need to be in London are still buying, but those who don’t need to buy are waiting to see what happens before they commit to investing.”
The latest figures from Black Brick also showed that 14 per cent have purchased a property in London as a buy to let investment in 2017, a 4 per cent drop when compared with transactions in 2016 and a further 14 per cent bought a property for education purposes or for their children, 8 per cent higher than the previous year, which saw just 6 per cent of purchases for this purpose.
The choice of investment location has also shifted. 38 per cent of transactions undertaken by Black Brick in Q1 and Q2 2017 were off market; a 10 per cent rise from the previous year, with buyers spending an average of GBP15.85 million on their off-market property.
Those who purchased on-market in 2017 sought properties in SW1, W8, NW3, W1, W12 and SW3. This is a contrast to 2016, which saw buyers purchase properties across a broader range of London postcodes including N1, EC2, SW1, W8, W1 and SE13. Camilla added: “Buyers are seeking safe investment and prime London’s golden postcodes will always remain a good long term investment with strong potential for capital growth.”
Buyers are also saving more by using the buying agency. On average, purchasers saved 6.85 per cent on their purchase in 2016, however, those who have bought in 2017 have saved an average of 8.25 per cent on their purchase.
Dell adds: “Now is absolutely the time to buy property in London. People are saving more and spending less and with the favourable exchange rate, this is also the ideal for international investors to save thousands on their purchase.”
Black Brick have also performed more rental searches for their clients, with 20 per cent using the company’s rental search service this year, a 14 per cent rise compared with 2016.
Dell says: “We have experienced a rise in clients using our rental search service as some wish to ascertain whether they are buying in the right area and want to ensure that they are making the correct investment choice. Making a mistake, or buying a property which isn’t quite right for them, can be a costly when taking into consideration the stamp duty charges that they will incur if they move.”