Can you capitalise on London 2012, asks Hugh Wade-Jones, director of Enness Private Clients
With fewer than 200 days to go before the London Olympics kick off, excitement is beginning to build in the capital. The 16-day extravaganza will see more than 10,000 athletes from more than 200 countries descend on the city and games organisers and tourism officials expect 500,000 extra visitors to London this summer. But rather than just groan about the inevitable public transport meltdown and traffic chaos, many shrewd property owners are seeking to take advantage of the influx by renting out their homes for the duration of the Games at vastly inflated premiums.
It’s not just the man on the street looking to cash in either – reports in the Evening Standard suggest that ex-England footballer Sol Campbell is letting his Chelsea townhouse out for £75,000 a week during the Games. The five-storey townhouse was designed by his wife Fiona Barratt and the couple are expected to take up residence elsewhere in London while their flat is leased. It’s not just Londoners looking to get in on the action either, with an 18th century castle in Portland, Dorset available for hire for visitors wishing to take in the sailing at Weymouth and an Old Etonian boathouse on the Thames on the market for £8,500 – a stone’s throw from where the rowing finals will be held.
Such stories have shone the spotlight on the high net-worth market, but it’s not just the rental sector that is going great guns. The purchase market continues to go from strength to strength, with prime property prices in London hitting an all-time high in December, even exceeding the March 2008 peak by 7%. This means that values at the top end soared by 12.1% in 2011 and have now risen more than 40% from their post credit crunch slump. Price growth has been particularly healthy in the £1 million to £2.5 million bracket, with strong demand from Asian clients looking for investment properties. While this purchase demand is not directly attributable to the capital’s hosting of the Olympic Games, it proves that London is still a top destination for overseas investment and high net-worth individuals.
You may be wondering how all this applies to you. Firstly, if you or your clients live anywhere near the Olympic Village or any of the other venues to be used during the Games, get your house on the rental market, pack your bags and go and stay with Auntie Ethel for three weeks. In all seriousness, it is worth investigating if you can capitalise on the hosting of the Games – nothing ventured, nothing gained.
Olympics aside, the prime property boom isn’t something you have to miss out on just because you haven’t handled such clients or loans before. There’s nothing stopping you making 2012 the year you broaden your reach to cater for such individuals or, if you’re not comfortable in diversifying into the niche yourself, establishing a partnership with a brokerage that does. A simple referral arrangement would mean that you aren’t turning away clients and you could earn a handsome sum for your lead. Brokerages specialising in high net-worth individuals like ourselves are familiar with the unique complexities of the cases, as well as knowing which private funders and non-high street lenders will touch the loans.
In an economic environment like the one we are in at present, you can’t afford not to consider all possible options to ensure your business remains healthy and productive. And the prime property market isn’t limited to London either – cities across the country have premium areas in which moneyed clients will be looking to invest or purchase property of both the residential and commercial variety. On your marks, get set, go.