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Linton Chiswick
Not much ruffles the creamy white stucco in Belgravia and Mayfair, London’s two primest property postcodes. Yet all of a sudden, change is afoot. In a location where houses change hands for tens of millions of pounds, more property is currently available than anyone in the business can remember. Most of it, however, remains, in any conventional sense, unmarketed. It’s there, it’s for sale, but only if you know the right people. Welcome to London’s secret property market, where contacts, rather than cash, open doors.
According to Strutt & Parker’s Lulu Egerton, one of perhaps a dozen trusted agents working at the very top end of the Belgravia market, there are only four houses officially for sale in Chester Square, but she knows of another eight that are definitely available to the right buyer.
In Mayfair, there’s been something of a residential renaissance. Since 1990, the area has seen an influx of the stealthily wealthy, with offices being decommissioned and returned to their original domestic purpose. So while, as Mayfair specialist agent Peter Wetherell points out, Mayfair is ‘still the world’s most expensive office location, outstripping New York and Tokyo’, residential prices have also rocketed, with a Grosvenor Square flat sold 25 years ago for £200,000 now worth £4 million. Wetherell points out that Mayfair’s inhabitants are the immensely, discreetly affluent; tycoons like Tom Singh and Julian Richer. Yet it also oozes glamour; ‘When Victoria Beckham wants to shop,’ he says, ‘she comes to Mount Street, and when David Beckham wants to celebrate, he chooses The Connaught.’
Meanwhile, back in Belgravia and a few blocks to the north west of Chester Square, Lulu’s seen a career’s worth of Eaton Square property in a single year: ‘There are 109 properties in Eaton Square, only nine of which are still houses. You know, until recently, I’d only seen two for sale in my life, and at the moment there’s just one listed on lonres.com [a subscription-only property listings site, by the agents, for the agents]. But I could get you into another three… two of them are around the £23m mark, one is at £28m.’
I should point out that Lulu is using the word ‘you’ very loosely. It’s unlikely I’d make it through the security gates and beyond the first panic button. And even if I were a cash-buyer with £30m in the bank, it wouldn’t guarantee me access to one of these Eaton Square properties. Entry to this ‘secret property market’ is all about contacts, relationships and history.
‘Some of these properties get traded privately,’ Lulu explains. ‘If the vendor and buyer know each other, it really can happen around the dinner table.’ An estate agent may be brought in, but really just to hold hands and help finish the After Eights.
More usually, an acquisition agent turns up with a wish-list. Peter Mackie is MD of Property Vision, a leading acquisition agency, with (at time of going to press) the two biggest acquisitions of 2009 under its belt (‘neither of which I can talk to you about, of course,’ he tells me). He does, however, tell me that clients’ requirements tend to depend very much on where they’re from. British and European clients are often more flexible in terms of address, if other requirements (space, parking etc) are met. Buyers from the Far East, Eastern Europe and African countries are more address-focused, highly aware of the nuances of postcode cache.
At this stage, it’s unlikely the estate agent will even know the identity of the prospective buyer, but will take it on trust that they’re serious and discreet. The right estate agent will, however, have heard on the grapevine about all the properties that might just be available, should the right buyer materialise. And, interestingly, here’s a moment when traditionally competitive estate agents call a truce and phone each other, sharing tips, information and leads in a combined effort to accommodate a well-heeled potential buyer. The acquisition agent will get a preview of the property before the real buyer turns up for a viewing. Since trust is about relationships, a complex dating game might take place, with a prospective buyer finding himself on the end of a phone line to a clued-up specialist estate agent after some matchmaking by perhaps a colleague , an accountant, a broker, or a lawyer.
Lulu recently showed a property to a businessman from Jakarta. ‘Now he had approached an acquisition agent who’d done business with a friend of a friend. This agent was a sole trader – not one of the usual suspects – but I happened to know them through one of my own friends. That’s how it works. It can be very circuitous and easily involve six or seven people.’
Trust isn’t just key; it’s everything. Viewings are stressful and intrusive for anybody selling their home. The kind of vendor who keeps their property off an estate agent’s books is often privacy-conscious for a reason. Evidence that they might be leaving the country, even divorcing, could be financially sensitive information. The property will almost certainly contain valuable works of art and furniture… under these circumstances only a trusted, vouched-for buyer will ever find out that the property is even for sale, never mind get through the door. So who are these people? Nigella Lawson and Charles Saatchi are said to own a large mansion in the Square. Roman Abramovich, Roger Moore and George Soros have all enjoyed Eaton Square addresses. Of course, nobody’s prepared to talk about exactly who’s relocating. But there’s certainly a sense that movement both out and in is unusually lively.
An electorate hungry for revenge taxes for non-doms and bankers, plus a general sense that Britain might be broke, is perhaps helping persuade some to make Monaco or Switzerland their homes when once they might have chosen London. Also, with a high-profile group of serial squatters on the loose and targeting Belgravia (they’ve recently taken possession of David Blunkett’s old grace-and-favour home in South Eaton Place and a 34-room mansion in Eaton Square) local councils are recommending owners sell rather than leave these places empty while they’re abroad.
The squatters started in Mayfair, breaking into and cleaning up dusty, disused mansions and – in an unexpected alliance – inviting the Daily Mail around for herbal tea and a sing-a-long, finally winning over a recession-angry public by letting rooms to key workers.
With so many Belgravia and Mayfair mansions for sale, social change is afoot in London’s two most exclusive neighbourhoods. But just who is buying?
According to the agents it is, in part, a new wave of buyers from mineral-rich countries on the other side of the world. Replacing the oil tycoons of the 70s and the oligarchs of more recent times are buyers from the Middle and Far East, plus small nation states freed after the breakup of the Soviet Union. There are interested parties from African states, too. They’re all relishing the opportunity to own ‘destination addresses’ in a city where – unlike their own countries – you can’t just knock down and luxury-build. Buying a property in Belgravia or Mayfair feels more like buying an Old Master.
Education, too, says Peter, is a major driver: ‘A London education is as sought after as the property. Anyway, I’d say 50 per cent of our clients are British. Right up at the top end of the market as well. They’re very much still players. Bonus-driven markets like Notting Hill might be more affected by current politics, but generally there’s a sense that London always manages to reinvent itself.’
So what’s it like, I wonder, introducing two captains of industry and encouraging them to agree a price? When I sold my last London home, pre-banking crisis, my buyer was a Citigroup banker whom I wholeheartedly hope is now earning a meager bonus-free living. He crashed my daughter’s fifth birthday party in his eagerness for a discount. He was never much of a player. But bring two Blue Chip titans together – masters of the art of tough negotiation – and surely there’ll be proper fireworks? Apparently not. ‘I’ve just acquired a flat for a client at around a million and that took three months to exchange,’ says Lulu. ‘Whereas something I’ve just done at £13m took four days.’
She explains it’s partly about the help; that is, top lawyers who mostly already know each other and can work together quickly. But it’s also about priorities. With this kind of wealth, the buyers and sellers don’t feel they’ve much left to prove. And a substantial property purchase might be the last emotionally charged investment left. These could be the houses in which their children grow up. To a buyer, finding the right house in an area like Belgravia or Mayfair, where every property is entirely individual and even ‘the secret market’ is traditionally short of stock, is more important than the right price. For the vendor, a smooth, painless and discreet sale matters more than wringing the very last million out of the deal.
In the context of rapid changes in national economic status and the speed of international business in the silicon age, what a handful of estate agents like Lulu is doing seems almost anachronistic. Yet while mainstream agencies might be under threat from their online equivalent or even for-sale-by-owner websites, it’s hard to imagine the grand Victorian stonework of Eaton Square, or Mayfair’s 18th century architecture, ever changing hands in any other way.
