French Riviera: A unique property hotspot
5 Jul 2024
27 November 2024
Please note: The external views expressed in this article are not the views of Barclays Private Bank, and forecasts are not a reliable indicator of future performance. Barclays does not offer tax advice. Professional advice should always be sought when selling or buying property.
As 2025 draws nearer, what policy changes and market trends will shape the future of prime real estate in London, the UK and beyond?
Our inaugural ‘Global Real Estate Forum: Prime Property and the Polls’ brought industry leaders together to examine the key factors influencing high-value property investments in a rapidly changing market.
The event took place in the grand ballroom of Raffles London at The OWO, formerly the Old War Office on Whitehall near Trafalgar Square. Once the nerve centre of British military operations, the building now serves as a luxurious hotel, blending historic charm with modern elegance.
The main panel event covered a range of topics. From the UK’s Budget-related tax changes for luxury property, to how global political events like the US election might shift market dynamics, as well as the evolving demand for prime real estate in London and worldwide.
Expert perspectives came from Lucian Cook of Savills, Laura Conduit of Farrer & Co, Jo Eccles of Eccord, and Barclays Private Bank's Michel Vernier and Stephen Moroukian, with Carol Lewis of The Times and The Sunday Times moderating the lively discussion.
Stephen Moroukian was also joined by Sir John Sawers, former head of MI6, for a fireside chat. Sawers shared fascinating insights into London’s safety and evolution as a global city, discussing how MI6 adapted its operations by moving from The OWO to new premises, and how both the city and MI6 have not only adapted but thrived – ensuring their continued security and prominence on the world stage.
The main panel debate began with the question of whether wealthy international buyers would retreat from London’s prime property market, sparking a lively discussion among the panellists.
Laura Conduit, Partner at Farrer & Co, explained: “Some highly mobile ‘non-doms’ [UK residents whose permanent home, or domicile, is outside the UK] have already left or are considering moves, particularly those without strong family connections here.” She pointed out that Budget changes for non-doms, along with political factors, are influencing this shift – although that doesn’t necessarily mean a mass exodus. “London’s cultural, educational and lifestyle attractions still make it a top choice for wealthy global families – highlighting the city's enduring appeal,” she added.
Jo Eccles, Founder of Eccord, agreed, pointing out: “It’s a tough balancing act for many clients – they’re concerned about rising taxes, but the city’s quality of life still matters a lot.” She noted that while changes in the economy could lead to some buyers reassessing their options, London’s reputation as a global centre of business and culture remains a big draw, especially for families looking for stability and first-class amenities.
There was, noticeably, a clear consensus: wealthy clients are unlikely to abandon London in large numbers. In fact, the panel noted that American buyers, attracted by the strong dollar, could offset any dip in demand from departing non-doms.
“The strong dollar makes London look more attractive,” said Lucian Cook, Director of Residential Research at Savills, explaining how currency shifts can often make central London more appealing to international buyers (though this impact will vary across different currencies).
The panel also believed that savvy buyers were likely to continue balancing the impact of taxes and political changes with London’s unmatched lifestyle appeal, helping to keep the city’s property market resilient and adaptable.
As the discussion turned to future property price trends, Lucian Cook of Savills noted that prime London property prices are currently 20%-25% below their 2014 peaks – and with prices already at lower levels, further significant declines are unlikely. “There has to be some give on prices in prime central London, but we expect an adjustment rather than a sharp correction,” he said, adding that the market’s fundamentals are still solid.
The panel acknowledged that short-term price adjustments are possible but agreed that London’s property market remains strong and resilient. Cook added: “Wealthy buyers may also see higher entry costs due to the 2% stamp duty on second homes, but when compared to transaction costs in other major global cities, London still offers decent value.” He stressed that international investors will likely continue to be drawn to London’s property market.
Top-tier buyers are generally less affected by financial constraints and tend to take a long-term view on asset ownership – recognising the strategic value of prime property as a perceived stable, appreciating asset.
In conclusion, the panel agreed that while property prices might not rebound quickly, London’s prime real estate market remains a strong long-term proposition – with best-in-class properties, in particular, continuing to perform well, driven by limited supply. And for those in a position to hold assets over time, the city’s global standing and its potential for future value growth make it an appealing investment.
As the discussion turned to wealth management strategies, the panel reflected on recent changes to the UK tax regime, focusing on capital gains tax, inheritance tax and the treatment of trusts.
“Effective tax planning is now essential, particularly for those motivated by tax – whether it’s tracking residency status carefully or considering gifting assets earlier, such as buying property for children to manage inheritance tax risks,” said Conduit of Farrer & Co.
Buying and holding assets in the UK had also become more complicated, the panel noted, with off-market transactions for luxury properties now a major trend. According to Eccles at Eccord, these deals have risen from 30% to over 60% since the COVID pandemic, making property searches more challenging. “Having a complete picture of the market is now essential,” she added, although with the right guidance and support, buyers can navigate these changes confidently.
Another topic of discussion was the interest rate environment, with Michel Vernier, our Head of Fixed Income Strategy, sharing his perspective on the broader economic situation. “Signs of easing in the UK job market, as well as the level of inflation, should speak for somewhat lower yields in the UK,” he commented. The prospect of a renewed Donald Trump administration, meanwhile, “at least in the short to medium term, should put some pressure on inflation in the US, which could translate to fewer rate cuts than previously anticipated”, he added. At the same time, predicted effects from announced tariffs might be “overplayed for now”.
Finally, as the event came to a close, Stephen Moroukian, our Product and Proposition Director, summed up the day: “Held at the magnificent Raffles Hotel at The OWO, today’s gathering has given us valuable insights into the evolving property market and key wealth management strategies.
“We’re excited to continue these important conversations, and the success of this event has us looking forward to the next one in London, where we’ll dive even deeper into these dynamic opportunities and challenges.
“Our fireside chat with Sir John Sawers also underscored London’s resilience and its ability to evolve, whether in real estate, finance or security. And like MI6 and Barclays, two institutions that have long set the pace for innovation, London is also meeting the challenges of a changing world. It remains a modern, secure city – offering a stable base for investment and business, and with a property market that holds strong in the face of global challenges.”
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