Fri 26 Sep 2008
Lap of luxury
We've all heard that the top end of the market is exempt from the ailing market but, asks Natalia Gameson, is this really the case?It's official - even luxury products aren't escaping the fall of the scythe of the credit crunch. The number of properties sold in England and Wales for over £1 million decreased by 31 per cent between April 2007 and April 2008 from 598 to 412 - a significant drop indicating liquidity is fast evaporating in the super prime markets.
"The luxury end of the market always suffers in a downturn, as the bottom end fails to move as fast," says Which? property expert Kate Faulkner. "Less people can trade up, and the further up the chain your property is, the more difficult it will be to sell, as the fewer the number of buyers."
However, says Steve Rigby, managing director of London developer Rigby & Rigby, it's still possible to sell the right product in the right location. "London had managed to escape the credit crunch to a certain extent, but the last three months have been rather difficult, mainly because buying is difficult. But we still had one sale in July, which is good considering we only build six homes a year."
Rigby puts the market deceleration to the government's inability to make up its mind on what it's doing with Stamp Duty, as well as the summer holidays. "Also, city bonuses are lower. But people do still need to move in London, and in the south-east as a whole - it's still a very international market, as people move in, out and around the capital."
Rigby & Rigby specialises in building swish but practical and functional homes, such as the Georgian town house it's currently selling in Chelsea for £4.5 million. Here, ceiling heights were raised and main rooms increased in width by shifting a staircase to a rear extension to create more space, while Rigby also excavated under the garden to build a media room, which then leads out onto a terrace. "Much of the cabinets and furniture we furnished the home with is bespoke and made specifically for this home," Rigby adds. "All our properties come fully furnished."
Meanwhile, Consero Homes showed me the plans that it is putting together for a £12 million property in Weybridge - where even the tree-shaped bath robe hangers will be made from chrome. This one-acre beauty that, indecently, is being marketed in Russia, will be built next to a top end golf course.
However, Consero is also thriving at the lower end of the prime market - at Woodland Drive on Sandy Lane in Cobham, which comprises three houses built on one of the neighbour's old back gardens, the firm has sold and reserved two for £2.45 million. Not bad for a bear market.
Framed by cypress trees and boxed hedges, the houses don't look all that worthy of their multi-million pound price tag from the outside - an age-old marketing technique borrowed from the Byzantine era, in which churches were purposefully built like factories to dazzle the viewer all the more when they entered the building to see the treasures hidden within. The firm did purposefully aim to show little of what's inside for this reason, says Robert Osborn, one of the firm's directors. "It's a good psychological tool to show little from the outside, and then to blind buyers with Jacuzzis, media rooms, panic rooms, secret cupboards and top-quality add-ons and extras. The house, for example, is clad in the same type of wood as the Guggenheim museum in Bilbao, Spain."
Consero also tends to kit each of its homes out with watch winders, priced at around £10,000 to keep the 50 premium Rolexes such buyers tend to possess under lock and key.
Heading north-east of Cobham to Esher, Octagon Homes is selling a £3 million six-bedroom detached family house, featuring what the firm calls its 'super house' specification with bespoke built kitchen clad in Gaggenau and Siemens appliances. Heading upstairs, two out of the four bathrooms the house boasts are en suites, which are kitted out in Villeroy and Boch and chrome fittings as part of the firm's drive to keep the luxury flag flying. The firm says it doesn't pay to let the spec slip even in a bear market - to stay in the game long-term, schemes still need to be presented as the best of their breed to help you keep your market share after the credit crunch is over. But the super-prime market isn't just after lavish luxury, says Tony Taylor, Octagon's director of planning and design - it's one of the few classes of buyers that can actually afford to be sustainable. The firm has just launched a series of houses on Burwood Park Estate in Walton-on-Thames, Surrey, which produce a quarter of their own energy requirements via ground source heat pumps. "Our producers expect the very best from us, both in design and efficiency," says Taylor. "I don't think they'll be disappointed with this."
Interior designers Hill House exaggerated the house's 1920s luxurious feel in installing a cocktail area in the 'drawing room' with bespoke drinks cabinet, club chairs and a seven-foot long mirror-framed wine rack, recessed and uplit to gaudy effect.
One golden rule for making the most of sales in this market is to ensure luxury properties in good locations can also flip over to the rental market, says Simon Barry, an associate in residential development at Knight Frank, in case buyers change their mind quickly about their new purchase. "Selling in a weak market won't be attractive to most buyers - ensure homes come with pools and gyms where possible, with 24-hour security."
Hertfordshire developer Fusion has recently installed a series of bespoke security features at its Chenies Place scheme in Arkley, which feature panic buttons, intruder and fire alarm alerts, as well as CCTV systems with cameras to cover home front and back. The system will connect to a telephone line, allowing residents to check on their home worldwide.
Each component is fitted in with the exterior design of the house in mind, and comes in stainless steel bell boxes and remote key pads. "Security and peace of mind are paramount for purchasers, as most burglars are opportunists," says Fusion sales director Gavyn Fresco. "This has been the driving force behind creating these systems. Purchasers will be taken through the system step by step to ensure they know how to use it properly."
Holiday Homes
The second homes market is a troublesome customer for most developers. It's generally avoided like the plague for fear of upsetting local communities, as the new homes wrench up property prices at a rate of knots. Lower Mill Estate in the Cotswolds has set a new precedent for the holiday homes market, in creating a separate, enclosed model for the area. Devised by former water-skier/publisher turned property developer Jeremy Paxton, the 450-acre bespoke homes model, built on a designated Site of Special Scientific Interest, won over Cotswold District Council, a body happily wedded to the vernacular architecture of the area. Or at least it did after John Prescott summoned the planning application for review.
Part eco-town, part rich ghetto, it's become something of a media darling, celebrated by figures ranging from Kevin McCloud to the Llewellyn-Bowens, who are set to work on designing a new phase of the properties on TV over the next year.
"It's a fantastic model for the second homes market as it doesn't affect local housing prices," says Jackie Llewellyn-Bowen. "It eliminates all resentment from the locals that you are going in, buying their homes and pushing up the prices - this has happened to us with the property we own in Cornwall. Also, it's built on land that would have lain fallow, as the local people just didn't want to use it, while it sets a prototype for building on greenbelt land."
The homes are a little small for a development where prices seem to keep heading further and further north of a £900,000 marker. It's a price clearly designed to appeal strictly to the London market - 50 per cent of buyers are from this area. Less than two hours away, it feels like the capital's taken its housing model with it as it travels, where homeowners are used to living cheek by jowl with their neighbours. Service charges come in at £3,000 a year or £60 a week, small change to most buyers on site, and they include the upkeep of a £6 million luxury spa, membership of which is included in the property price and extensive gardening and maintenance. Work recently started on the scheme's latest wing, the Nightingale reserve, in the construction of 15 new homes. Made of a mix of glass, steel, stone, timber and rendered walls, prices range from £420,000 to £900,000.
Millgate Homes' Sundridge Park, made up of a range of flats, townhouses and refurbished mews houses, brings the second home model a little closer to London. Located in Bromley, Kent, nine miles out of Canary Wharf, it was, says Robert Adam, the architect behind the project's restoration, "the finest address in Kent 200 years ago".
These homes are ultimately for the time-poor Londoner. Easy to access and a world away from the bustle of the city, the buyer can escape for the weekend as soon as he swoops down the site's main drive, past the curves of the site's two 18-hole golf courses, to the views afforded by the development's main building, a Grade I listed mansion house designed by classicist John Nash in 1799. On site, there's also on-site tennis courts and a health spa designed by Syntax. Not for the strapped for cash, homes here start at £675,000.
Ensuring you pick a classical style that will not age is essential for this kind of development, inside and out, says designer Mark Wilkinson, who provided bespoke kitchens for each home in the development. "You need to create a product that will be around for 200 to 300 years, using the highest quality materials available to make buyers feel they are special. They can come to our workshop, for example, to see their kitchen being made by hand. The materials we use also have a very low carbon footprint, which is not how many companies chose to look at them. Our kitchens are built in the manner of those in country houses, made to last for centuries."
Upping the ante
To generate more sales, the luxury homes market should follow the example of the middle and lower sectors in emphasising the benefits of new-build, in comparison with the secondhand market, Faulkner concludes. "Developers need to stop the gimmicky marketing ploys of putting a new car on the drive and start looking at the real benefits of buying a new-build. These should revolve around the building being more carbon neutral with lower bills, while they come with smaller gardens - buyers rarely have time to tend the mammoth gardens that come with larger properties.
"New homes are also safer, as they meet higher building regulations on fire safety requirements. The small communities developers create in these top-end pockets, especially in nice villages or other upmarket locations, are also excellent selling points."
Posted by Natalia Gameson
in Consero Homes, Features, Fusion Residential, Gavyn Fresco, Hill House, Jackie Llewellyn-Bowen, Knight Frank, Mark Wilkinson, Millgate Homes, Octagon, Rigby & Rigby, Robert Osborn, Steve Rigby, Tony Taylor on Fri 26 Sep 2008
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