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Property Bulletin Summary by London Property

2025 Market Outlook Rightmove forecasts a strong 2025 for the UK housing market, with expectations for both house prices and the number of homes sold to rise significantly. Despite a recent dip in November, market optimism is high, with Rightmove attributing the decline to seasonal trends and the effects of the autumn budget. A subsequent Bank of England base rate cut has revived buyer interest, with predictions for a 4% increase in asking prices driven by potential mortgage rate cuts.

Iceberg Homes A unique trend in luxury residences, the 'iceberg home,' is gaining traction. These homes, largely built underground, offer expansive multi-level basements with amenities like pools and private galleries. Popular among the wealthy in areas like Kensington and Chelsea, these homes provide luxury and space but have sparked controversy due to construction disruptions and weakened foundations.

Leasehold Reforms The government will publish long-awaited legislation to abolish England's leasehold property system in the second half of next year, affecting millions. The new legal framework aims to make commonhold the default tenure by 2029, addressing exploitation concerns and ensuring more secure property rights for leaseholders. The announcement has garnered mixed reactions, with some praising the reforms and others worried about the complexities of implementing new legislation.

Landmark Court Ruling The UK Supreme Court's ruling in Kyrieva vs. Bejamov reinforces the immovables rule, which protects immovable property in England and Wales from foreign bankruptcy claims. The decision prevents a Russian bankruptcy trustee from claiming a property in Belgrave Square, highlighting the importance of national sovereignty and legal principles in cross-border insolvency cases.

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Alternative Investment Funds Gaining Popularity by 2025: Private equity, hedge funds, and real estate funds are set to dominate the alternative investment space for retail investors. Real estate funds offer stability and long-term growth through diversified exposure to properties, while funds of funds provide cost-effective diversification across multiple asset classes.

Impact of Labour Policies on Rental Market: A RICS survey indicates tenants will face higher rents and increased competition due to Labour's policies affecting landlords. Increased stamp duty and budget changes are driving landlords out of the market, leading to a decline in rental properties and an expected 5% annual rent increase over the next five years.

Soho Estates' Financial Performance Amid Market Downturn: Soho Estates saw a record rental income but posted a pre-tax loss due to a drop in commercial property values. Despite a revenue increase driven by new tenants like Warner Bros and Skyscanner, the property portfolio's value declined, influenced by rising interest rates. The company remains stable with strong tenant demand.

Leasehold Reform Delays Expected: According to Alice Bradley, co-CEO of LEASE, significant leasehold reforms will take years to implement. Despite laws banning leaseholds for new houses and extending lease terms, the timeline for additional reforms, including ground rent caps and enhanced leaseholder rights, remains uncertain under the new Labour government.

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Wealthy Democrats Flock to London Real Estate After Trump's Election Win

Following Donald Trump's recent election victory, a notable trend has emerged: affluent Democrats are increasingly purchasing luxury homes in London. Becky Fatemi of Sotheby’s International Realty and Marco Previero of R3Location have reported significant upticks in inquiries and relocations from wealthy Americans. These buyers are seeking a "safety net" due to their opposition to Trump’s policies. High-end rental properties are particularly in demand, as many are opting to rent due to the urgency of their moves and high stamp duty taxes on property purchases. Despite recent tax changes, including increased stamp duties and the end of favorable tax regimes for non-domiciled individuals, London remains a prime destination for these buyers.

Are the Super Rich Really Abandoning Britain?

Charlie Mullins, a notable figure who sold Pimlico Plumbers for £145 million, announced his departure from the UK, citing inheritance tax as a primary reason. Mullins' move is part of a broader trend where high-net-worth individuals (HNWIs) are considering leaving the UK. Henley & Partners estimate a net loss of 9,500 HNWIs this year, driven by factors such as the end of the non-dom regime, tighter inheritance tax relief, increased national insurance costs, and high stamp duties on second homes. Despite the complexity and personal considerations involved in relocating, wealth managers report increased client interest in moving to destinations like Singapore, Jersey, Switzerland, and the Middle East. While actual departures remain limited, the discussion around relocation continues to grow.

Co-Living Firms Set to Revolutionize the Housing Market

Prominent co-living companies have launched a campaign to promote their innovative rental housing model to local authorities, national policymakers, and investors. Co-living, which focuses on community, affordability, and convenience, offers private and communal spaces such as shared kitchens, coworking areas, gyms, and lounges. Rents typically include bills, and tenancy contracts are more flexible than traditional rentals. The 'Why Coliving' campaign, led by Conscious Coliving, features participants like urbanbubble, VervLife, and HUB. Supported by the British Property Federation, CBRE, and Cascade Communications, the campaign includes multimedia content and industry events to showcase how co-living can align with housing goals and provide benefits to various stakeholders.

Tom Ford Makes Largest UK Property Purchase of 2024

Tom Ford has made headlines with his purchase of a property in London's upscale Chelsea district for £80 million ($104 million), marking the largest residential real estate transaction in the UK for 2024. The property, a white stucco-fronted mansion in a garden square between Hyde Park and the River Thames, adds to Ford’s extensive real estate portfolio, valued at over $300 million. This acquisition follows Ford’s sale of a home in Regent's Park, as he anticipates new government tax hikes on high-value properties. Ford’s portfolio includes notable properties such as Jacqueline Kennedy Onassis's former Hamptons estate, a Palm Beach mansion, and Halston's former Manhattan townhouse. Since retiring from fashion, Ford has shifted his focus to his impressive real estate investments.

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