property intelligence

A DIFFERENT PERSPECTIVE ON THE WORLD OF PROPERTY FROM KNIGHT FRANK ISSUE 01

PIPROPERTY INTELLIGENCE

TH

E W

OR

LD IS

NOT

EN

OUGH

DREAM HOMEGAME

TALKING POINTS

WHY UK?

INVESTMENTSOF PASSION

THE HONEST

ANSWER

06 INVESTMENTS OF PASSIONFROM CLASSIC CARS TO WATCHES, WE LOOK AT SOME OF THE MOST POPULAR INVESTMENTS OF PASSION.

WELCOME CONTENTS

04 WHY UK?HOW DO PROPERTY PEOPLE CHOOSE WHERE TO LIVE? WE ASKED OUR AGENTS WHAT THEY LOVE ABOUT THEIR LOCATION.

04

06

Whether it be the national news, endless mail from your local estate agent, or anecdotal dinner-party chat; taking away a clear message is often a challenge.

That is why at Knight Frank we have decided to produce something different for owners of prime property both in London and the Country.

In this first edition of Property Intelligence we would like to dispel any perceptions you may have about magazines produced by estate agents and present you with something fresh and what we believe to be relevant to you.

If you decide to read further, you will not find pages and pages of sold properties to indicate how well we have done in your area. Nor are we going to wax lyrical about how buoyant the market is when you may not have found this to be the case, nor will we repeatedly “bang the corporate drum”.

Instead, we want to begin to take you on an interesting journey around the world of property, in a way that you may not have experienced before. Not only are there some light-hearted sections, such as the Dream Home Game, we also focus on the topics that our clients are most frequently seeking advice on. In articles like The Honest Answer, we cut through perceptions of estate agents, with some candid insights that you won’t find elsewhere.

So, before you utter the words “not another property magazine – just what we need!”, and drop your copy into the recycling bin, please spend a few minutes with Property Intelligence and do please let us know if you think we have struck a chord.

WITH OFFICES UP AND DOWN THE COUNTRY, WE ARE AWARE THAT IT CAN SOMETIMES BE DIFFICULT TO SEPARATE THE WHEAT FROM THE CHAFF WHEN IT COMES TO PROPERTY UPDATES.

ANDREW HAY Global Head of Residential Property

NOT ANOTHER PROPERTY MAGAZINE – JUST WHAT WE NEED!

WE WANT TO BEGIN TO TAKE YOU ON AN INTERESTING JOURNEY AROUND THE WORLD OF PROPERTY

KNIGHT FRANK /// PROPERTY INTELLIGENCE /// ISSUE 01

@www.knightfrank.com [email protected]

Twitter.com@knightfrank

Facebook.com /KnightFrankLLP

Linkedin.com /company/knight-frank

Pinterest.com /knightfrank/

08 WHERE ARE YOU DESTINED TO BE?PLAY OUR DREAM HOME GAME TO FIND THE PERFECT PROPERTY FOR YOU.

12

03

14 THE HONEST ANSWEROUR MOST EXPERIENCED AGENTS GIVE ADVICE ON PROPERTY MATTERS THAT CONCERN YOU.

16 THE WORLD IS NOT ENOUGHAS INVESTMENT IN SPACE TRAVEL ROCKETS, LIAM BAILEY CONSIDERS THE IMPLICATIONS FOR PRIME RESIDENTIAL PROPERTY MARKETS.

08

18 ABOUT USA COLOURFUL SELECTION OF THINGS WE’VE DONE IN THE PAST 18 MONTHS.

12 TALKING POINTS WE EXAMINE SOME OF THE MOST TALKED ABOUT HOME OWNER ISSUES OF 2014.

04 14

18

16

All correspondence and enquiries to: Knight Frank LLP 55 Baker Street London W1U 8AN United Kingdom T: +44 20 7629 8171

© 2014 Knight Frank LLP All rights reserved. No part of this publication may be reproduced by any means without the written permission of the copyright owners. Although every effort has been made to ensure the accuracy of this publication, the publishers cannot accept responsibility for any errors or omissions.

Designed and published by www.themarketingcafe.net


WHY UK?

04

How do property people choose where to live?

We asked our agents what they love about their location.

WIMBLEDONWe love living in Wimbledon because we love living in a village that is also in the heart of London.

DOMINIC PASQUA PARTNER, WIMBLEDON OFFICE

I LOVE LIVING IN WEST BERKSHIRE BECAUSE OF THE BEAUTIFUL

COUNTRYSIDE, GREAT COMMUNICATIONS, SCHOOLING AND PUBS!

NICK LOWETH PARTNER, HUNGERFORD OFFICE

OXFORDCulture combined with wonderful architecture, large open spaces, variety of good schools, proximity to London and scenic countryside on the doorstep.

WILLIAM KIRKLAND PARTNER, OXFORD OFFICE

ISLINGTONWhether you’ve settled down into a single life or family life with kids you’re guaranteed to fall into one of the many great dining or date spots – Ziloufs for cocktails, Le Sacre Coeur for home from home cooking, The Tow Path cafe on the canal for toasties.

ANDREW GROOCOCK PARTNER, CANARY WHARF OFFICE

BATHBath is quite simply an easy place to live, with little importance given to how much money you earn! A stunning City with a village atmosphere. We have great schools both state and private and of course one of the best rugby sides in the country. Why would you want to live anywhere else?

CHARLIE TAYLOR PARTNER, BATH OFFICE


05

To join the discussion about living in the United Kingdom, tweet us @knightfrank using #whyUK

BATTERSEAThe shopping in Battersea is excellent with a short walk over the Thames to the Kings Road and Sloane Square. The Prince Albert’s excellent British menu and beer garden is a Sunday afternoon well spent – dogs welcome.

MATTHEW SMITH PARTNER, RIVERSIDE OFFICE

SURREYSurrey offers stunning countryside, great access to London, both a cosmopolitan lifestyle in the towns and peaceful rural living in the villages.

TIM HARRISS PARTNER, GUILDFORD OFFICE

HEREFORDSHIREWe still have local shops like a butchers and a bakers. It is really rural, whilst still being only an hour to Birmingham International airport and the world!

CHRISTOPHER DEWE PARTNER, COUNTRY DEPARTMENT

CHELSEA IS A COMMUNITY OF LIKE-MINDED PEOPLE IN THE MIDST OF A.

GLOBAL CAPITAL AND HAS THE BEST TO OFFER OF A CITY IN ONE CONVENIENT PLACE.

JAMES PACE PARTNER, CHELSEA OFFICE

DORSETDorset is as multi-layered as the famous fossil flecked cliffs along its Jurassic Coast. With fabulous scenery, this county is rich and vivid. Charming market towns and tiny villages are tucked into this tranquil haven.

LUKE PENDER-CUDLIP PARTNER, SHERBORNE OFFICE

SUSSEXSussex gives you everything you could want – fabulous countryside, stunning coastline, picturesque villages, market towns and quirky seaside spots.

JAMES MACHELL PARTNER, HORSHAM OFFICE

YORKSHIREWensleydale cheese and Black Sheep beer!

TIM WARING PARTNER, HARROGATE OFFICE


EDINBURGHEdinburgh is a beautiful city which punches well above its weight in terms of arts, culture, great restaurants and shops. The Festival in August brings an amazing buzz, with an unbelievable array of shows and events.

EDWARD DOUGLAS-HOME – PARTNER, EDINBURGH OFFICE

Photo: www.theedinburghblog.co.uk

INVESTMENTS OF PASSION

06

4. WINE 176%

2. ART 193%

Prime property is widely regarded as a classic safe-haven investment. We examine some emotive alternatives.

A house, of course, is often a lovely thing in its own right. But when combined with a

collection of personal treasures it becomes a truly wonderful reflection of its inhabitants’ lives and personalities. The art hanging on the walls, carefully selected vintage wine slowly maturing to perfection in the cellar, favourite pieces of cherished antique furniture, the jewellery or time pieces on a dressing table evoking special memories, perhaps a classic car in the garage or even stamps in an album; they all help turn a house into a home.

Now, however, the undiminishing desire of people to own these things has helped propel them from merely beautiful objects of desire into a burgeoning asset class – the “investment of passion”. Although there have always been canny experts – and lucky amateurs – making money from their collections, the collapse in value of more traditional investments, such as stocks and shares, during the global financial crisis, saw an increased focus on more tangible assets; things whose value you don’t need a degree in economics to understand. A plethora of funds, some reputable, some decidedly not, were launched to capitalise on this quest for safe-havens. As a fascinated bystander, Knight Frank created its own Luxury Investment Index (KFLII) to track the performance of nine of these investments of passion. Published for the first time in the firm’s Wealth Report 2013 magazine, the results were fascinating. While 10-year growth of 179% for the overall index by the end of 2013 was more than healthy, compared

with the FTSE 100 (+51%), and better even than luxury residential property in prime central London (+133%), it was the performance of its individual components that was most eye-catching. Classic cars, for example, had leapt in value by an astonishing 456% over 10 years, while stamps and coins had risen by over 200%. Art (+193%), wine (+176%) and jewellery (+156%) also outperformed prime London houses. Sadly being old and attractive doesn’t guarantee investment-grade performance. Antique furniture is

currently out of vogue and this meant the furniture component of our index delivered a negative return (-19%), despite the rise in demand for trendy twentieth century designers. Changing fashions and trends are one reason that investments of passion can’t always be guaranteed to perform. Pop artist Jeff Koons’ Balloon Dog sold for a staggering $58.4m last year, but will somebody want to pay that much for a large orange dog in 20 years? Time will tell. The headline figures also only tell part of the story. Although the indices we used to compile KFLII are all from respected third parties, they can only represent a limited slice of the market. However much you love your Triumph Stag, its value is unlikely to have grown quite as sharply as the marques most in demand by classic car collectors. Just as it makes sense to buy the house that will make you happiest to live in, investing in objects of desire that stir your soul or lift your mood, not only hopefully just your bank balance, will yield the greatest long-term rewards.

CHANGING FASHIONS AND TRENDS ARE ONE REASON THAT INVESTMENTS OF PASSION CAN’T

ALWAYS BE GUARANTEED TO PERFORM


07

3. WATCHES 82%

5. CLASSIC CARS 456%

THE GLOBAL TOP 5 MOST COLLECTED*

*Source: The Wealth Report Attitudes Survey 2014. For more details and to download your copy go to thewealthreport.net

1. JEWELLERY & DIAMONDS 176%


DREAM HOME GAME

PROPERTY THAT REQUIRES A PASSPORT?

PREFER

TH

E HU

STLE

AN

D B

UST

LE?

A BEACH OF YOUR OWN?

MIX

CO

CKTA

ILS

IN Y

OU

R O

WN

PR

IVA

TE

BAR

?

STIR

RED

BY

A D

RA

MA

TIC SK

YLIN

E?

DO

YOU

WA

NT

TO

SEE TH

E BIG PICT

UR

E?

COME DINE WITH ME AND 23 GUESTS?

NEW YORK

Where would you live if money were no object? Play our dream home game to find the perfect house for you.

AT

TR

ACT

ED T

O T

HE

COA

ST?

MORE WINDOW THAN WALL?

BARBADOSSPAIN

MIAMI

SWITZERLAND

BRUSSELS

08


LON

DO

N C

ALL

ING?

SPACE AND CLEAN AIR TO BREATHE? NEE

D A

HA

NGA

R F

OR

YO

UR

HEL

ICO

PTER

?

LIK

E T

HE

SOU

ND

OF

CL

AT

TER

ING

HO

OVES

?

SPOR

TY

?

PAR EXCELLENCE?

CITY VIEWS?

FULLY AUTOMATED?

GUEST ACCOMMODATION?

KENNINGTON

IRELAND

Find out more about your chosen residence.

VIEW THE DREAM PROPERTIES

START

OXFORDSHIREDORSET

SCOTLAND

MAYFAIR

09


IRELAND – LYON DEMESNE, COUNTY KILDARE One for horse lovers, with excellent equestrian facilities and 600 acres of land, this elegant Georgian house also boasts 5 estate cottages and its very own lake.

SCOTLAND – EILEAN RIGH For the person who has everything except their own island. A charming farmhouse complete with a boat house, helicopter hangar and private beach, this is one of Scotland’s finest offerings on a stunning coastline.

DORSET – HIGHDON HOUSE A perfect rural retreat with panoramic views towards the Dorset coastline, with an annexe cottage, tennis courts and swimming pool. This property is ideal for someone who enjoys countryside living.

OXFORDSHIRE – KINGSTON LISLE PARK A spectacular Georgian house and estate, complete with swimming pool, golf course, tennis courts and an excellent shoot, perfect for fans of country pursuits.

LONDON

Mayfair

Ireland

Scotland

DorsetCOUNTRY

Kennington

Oxfordshire

MAYFAIR – PARK LANE Famed for being one of the most prestigious locations on the Monopoly board, this unique 3 bedroom apartment on Park Lane is one for the tech-savvy, boasting the latest technology and the best in interior design.

KENNINGTON – THE WATER TOWER An incredible conversion of a listed Venetian-style water tower, encompassing 5 themed bedrooms, ideal for someone looking for a unique property and panoramic views of London.

10


PRIVATE VIEW All of these dream homes were originally featured in Private View magazine. To download your copy visit KnightFrank.com/PrivateView

Brussels Miami

Spain

NEW YORK – PUCK PENTHOUSES Six iconic penthouses in the heart of coveted Soho, full of character with soaring vaulted brick ceilings and oversized windows, which frame the sweeping cinematic views of one of the most famous cities in the world.

SWITZERLAND – L’ÉGLISE RUSSE Everything you need to be the perfect host with a home cinema, guest accommodation and spacious reception rooms. This apartment is located in one of Geneva’s most prestigious squares, perfect for exploring the city.

BRUSSELS A ground floor apartment with incredible ceiling heights of up to 4m. This is an excellent base for exploring Brussels and great for entertaining, with space for 24 to dine.

MIAMI Situated between the ocean and the bay, and designed by architect John Pawson, these apartments provide breath-taking views from their floor-to-ceiling windows.

BARBADOS An exclusive villa in the Sandy Lane Estate complete with private beach, swimming pool and home theatre; a perfectly serene retreat.

SPAIN – IBIZA Positioned in a dramatic cliff-top location, this 4 bedroom villa with its own bar, is the perfect place to watch some of the island’s beautiful sunsets.

Barbados

INTERNATIONAL

New York

Switzerland

1 1


12

From renewable energy to connectivity, we cover the issues that homeowners are talking about in 2014.

AUTOMATIC GATES Many homeowners have powered gates for security and access control. From time to time these need servicing and maintenance which can lead to contractors recommending significant extra spend on upgrading, to meet apparent new minimum safety standards.

Time should be taken to quiz the contractor because, in many cases, private gates in rural locations need no mandatory upgrading. A simple acknowledgement that features designed to increase safety have been offered but voluntarily declined, can often satisfy contractors’ legal obligations and avoid costly work.

WITH THE PROPOSED £2M MANSION TAX THRESHOLD

NEARLY ONE IN TEN PROPERTIES DEFINED AS

“MANSIONS” WOULD BE ONE AND TWO BEDROOM FLATS

GREEN ISSUESWith ever increasing pressure on individuals to reduce their carbon footprints, homeowners should make an effort to implement aspects of sustainable living. If homeowners insulate their homes sufficiently, they will see a reduction in the cost of their energy bills, as well as saving vital resources and contributing to eco-friendly living. Solar panels can also represent an excellent investment as they can generate income and deliver an on-going free supply of clean electricity. The cost of an average solar panel installation is £6,500 and the average saving is around £160 annually, providing a long term investment for homeowners for their environmental and financial futures.

RENOVATION BASICS Homeowners planning renovations or building projects will firstly need to consider basic costs such as windows, doors and insulation. Energy efficient double or triple glazing limits draughts and reduces heat loss as well as insulating against outside noise.

The cost for installation varies depending on the size of the property and the number of windows, however the annual saving is usually £170 or more. If each home in the UK used the best draught proofing, every year we would save £180 million, and enough energy to heat nearly 930,000 homes.

DOMESTIC STAFF LAWS The government is continuing in its quest to overhaul some areas of employment law that have long been felt by employers to be imbalanced in favour of employees. In April 2012 the maximum period of employment within which an employer can terminate an employee’s contract of employment, with only very limited danger of an unfair dismissal claim, was extended from one year to two years. Since 29th July 2013, employers can theoretically enjoy greater freedom to engage in pre-termination discussions with longer serving employees. Such discussions approached in the correct way will be inadmissible in any future tribunal claims. A new ACAS Code of Practice helps explain the new process.

1. 2. 3.

4.

TALKING POINTS


13

BROADBAND SPEEDBroadband speed can be an issue for anyone living in a rural setting, particularly in the age of communication when being online is so essential to everyday life. It is important for homeowners to consider signal strength before choosing their internet provider; many companies and comparison websites will offer an online service to allow customers to check before committing to a contract. Homeowners should be aware of the length and quality of the phone wiring extensions in their home and consider fibre optic broadband for larger homes as it uses a special data extension kit rather than existing phone extensions. Signal boosters are also an option for homes with poor connections; they work by bouncing the signal over a greater distance and are available from electrical retailers.

RURAL PAYMENTS AGENCY INSPECTIONS Country house owners claiming Single Farm Payment should be mindful of the fact that they could be notified of an inspection by the RPA and given 48 hours within which to provide access for this purpose. Great care should be taken not to be complacent over the eligibility criteria that need to be met to validly claim subsidy and also the minimum standards of land and environmental management that must be demonstrated. Anyone who has had an inspection will vouch for the thoroughness of the process. Landowners who claim subsidy but who allow others to undertake the farming activities should be on particular guard and will need to show evidence that they are ‘bearing the farming risk’ and are ‘in control’ of the land.

THE RIPPLE EFFECTProperty prices in the prime London and prime country markets fell significantly in the immediate aftermath of the financial crisis, eventually reaching their low points in 2009. However, over the past five years there has been a significant divergence in performance. While prices in prime central London now sit 68% higher than their market low, in the regions there was a different picture with values fluctuating until the end of 2012. The turning point in the country house market happened in early 2013 and, as the UK economy improved, we began to see confidence in the housing market ripple out from central London. Prices for prime country houses have now been rising for five consecutive quarters and are 4.5% higher on an annual basis in the year to the end of March 2014. Much of this growth has been concentrated in a mix of prime urban locations across the country with the property markets in the Home Counties, Sevenoaks, Winchester, Bristol, Bath and Oxford leading the way. These locations are benefitting from a flow of wealth from London as buyers, who previously didn’t have the confidence in the housing market outside the capital, move out. They are now seeing the early signs of recovery and are taking advantage of the wide price gap between London and the rest of the country before prices start to play catch-up. The gap between the price of homes in central London and the country is at its widest in several decades. As the UK economy continues to recover and the job market picks up, we expect more Londoners will make the move out to the regions. We are forecasting further price growth in the prime country market in the coming year, as improved economic conditions and confidence feed in. Property markets in South East England will continue to be boosted by the “ripple effect” of London prices, as well as continued interest from buyers in towns within easy commuting distance of the capital.

RISING ENERGY COSTSHelp is at hand in the form of the long awaited announcement of the Renewable Heat Incentive (RHI) for domestic premises. RHI has been available to commercial properties for some time, but from Spring 2014, houses producing heat from ground and air source heat pumps, biomass boilers and other similar technologies can apply for payments of between 7 – 19 pence per kwh of heat energy they generate each year for 7 years.

GAINING PLANNING PERMISSIONPlanning permission is vital for new builds, extending a property or changing the purpose of a building. Buyers should be mindful of the age of the property and whether any major changes are required. Listed Building Consent is also obligatory for any structural changes being made to listed properties. This service is free, and although planning permission is not overly costly, local authorities can take up to 13 weeks to make a decision on a proposal so it is important to consider the cost of delays and it is advisable to make enquiries before building work begins.

6.5.

7.

8.

9.

To keep updated on all our latest research and market insight, sign up to My Knight Frank via KnightFrank.co.uk


We surveyed our clients to find out the questions they wanted to ask.

THE HONEST ANSWER

CAN’T I JUST MARKET MY PROPERTY MYSELF THROUGH A PORTAL?You can, but you need to go into the process with your eyes wide open. You’ll not only have to make time to vet potential buyers and host viewings, but the all-important negotiation process will also be down to you. If it’s your property, it can be difficult to be objective and an agent can be a useful buffer between you and your buyer, giving you a better chance of getting the deal you want.

I’VE BEEN GIVEN A RANGE OF VALUES FOR MY PROPERTY – WHY WOULDN’T I GO WITH THE HIGHEST PRICE?No-one has the monopoly on correct pricing, but beware the agent that comes in with a high price to win your instruction. Having to reduce it once you’ve been on the market for a while means you’ve missed out on the initial flurry of interest that can help you get the very best price.

LONDON PRICES ARE STILL GOING UP – IS IT SUSTAINABLE?We get asked this a lot, and we believe the price rises are sustainable for a couple of good reasons. One, London attracts buyers from all over the world for the lifestyle it offers and the security of investment. Two, supply is limited – London’s best postcodes aren’t getting any bigger. Put the two together and you get the perfect conditions for a long-term rising market.

SHOULD I DO SOME WORK TO MY PROPERTY BEFORE I PUT IT ON THE MARKET?It’s a cliché, but first impressions count. A new coat of paint and de-cluttering inside will give a cleaner, more open feel to your property – this will all help your property to stick in the viewer’s mind. You may be surprised at the number of people who decide whether or not to view based on the appearance of the front door, so a little time invested up front can pay real dividends later on.

14

YOU NEED AN AGENT THAT HAS A GOOD TRACK RECORD OF

SELLING OR LETTINGPROPERTIES LIKE YOURS

IN YOUR AREA

LONDON ATTRACTS BUYERS FROM ALL OVER THE WORLD FOR THE LIFESTYLE IT OFFERS


WHAT DOES MY FEE PAY FOR?Experience, local knowledge and, hopefully, someone you’ll enjoy working with as you look for your buyer or tenant. Whoever you choose, you need an agent that has a good track record of selling or letting properties like yours in your area, so don’t be afraid to put them on the spot – ask them about their experience and for details of recent transactions.

WHY DO THE FEES DIFFER FROM AGENT TO AGENT?It’s like most things in life – you get what you pay for. So although one agent might be charging an extra 0.5% than the next, they could repay that many times over when they put their experience to work in negotiating a better price for your property.

SO WHAT DIFFERENTIATES ONE AGENT FROM ANOTHER?The one-word answer is people. You want an agent that has a lot of experience and understands the considerable ins and outs of selling. It is also important to be confident that your agent is able to find the right buyer for your home. Are they up to speed with how people go about finding property in 2014, and will they ensure that your most valuable asset is marketed through the right channels? Whatever they offer, you need to be sure they have all the bases covered.

DO YOU REALLY KNOW THE VALUE OF MY HOUSE?Yes. There’s no magic formula, but experience and local knowledge means that it is possible to know what’s achievable for any given property on a patch. Part of this is down to in-depth research and the rest is down to how long an agent has been working in that area.

15

A NEW COAT OF PAINT,TIDYING UP THE GARDEN,

DE-CLUTTERING INSIDE...WILL ALL HELP YOUR PROPERTY TO STICK

IN THE VIEWER’S MIND

If you have a question that you’d like answered, please send it to us at [email protected]

Or see other questions being discussed by our agents at KnightFrank.co.uk/answers@

A LITTLE TIME INVESTED UP FRONT

CAN PAY REAL DIVIDENDS LATER ON

BE CONFIDENT THAT YOUR AGENT IS ABLE TO FIND

THE RIGHT BUYER FOR YOUR HOME


THE WORLD IS NOT ENOUGH

V irgin Galactic’s increasingly assured sub-orbital test flights are one of the most obvious manifestations of

the new wave of activity in space. Talking to Knight Frank, entrepreneur Richard Branson said: “New commercial space will be one of the most exciting investment sectors in the next 20 years, driven by the initial successes of companies like Virgin Galactic. There is already some good evidence that the leading players are receiving high levels of interest from the mainstream investment community and attracting valuations that reflect confidence in future growth and opportunity.”

REDUCED GLOBAL TRAVEL TIMESAlthough sub-orbital trips for wealthy tourists will keep Virgin Galactic busy in the short term, Mr Branson says the next step for the technology will be to slash travel times around the world. “I’m very excited about a future version of our current spaceship which will make transcontinental travel clean and fast – London to Sydney in a couple of hours with minimal environmental impact.”

Travelling outside the Earth’s atmosphere, gravitational forces will allow spacecraft to travel at over 4,000 miles per hour, so breakfast in Mayfair could easily be followed by lunch overlooking Sydney Opera House. It doesn’t take much imagination to see the dramatic impact this innovation could have on global luxury property markets.

As our Global Cities Survey confirms, right now London wins over New York as a global wealth hub, in part because London is more convenient for African, Middle Eastern, Russian and European Ultra High Net Worth Individuals (UHNWIs). But within a decade, this convenience premium could be noticeably reduced if Mr Branson succeeds in making his vision a reality.

IMPLICATIONS FOR SECOND HOMESTicket price will be critical. If this is a technology for billionaires only, then market disruption might be limited to a wider choice of global lunch options. But if the price drops to allow the merely very wealthy to access sub-orbital flights, then we have to reconsider everything.

Take second homes in Europe. Right now, demand is mainly restricted to European investors, who try to limit their travel to less than two hours. In future, that same time limit could allow Chinese or Indian investors to pop over for the weekend to visit their Tuscan farmhouse.

New York may well gain ground from London, but that is in relative terms. As all the global hubs become dramatically more accessible, the criteria for choosing a second home become more about the location itself, and much less about the convenience of travel.

Expect more property demand, more development, more travel and, as a result, more people searching for really private escapes. Maybe it’s time to invest in that South Pacific island you’ve had your eye on. Assuming it can accommodate a runway and a space port, a James Bond villain-esque hideaway will soon be convenient for, well, just about everyone.

As investment in space travel rockets, Liam Bailey, Head of Knight Frank Research, considers the implications for prime residential property markets.

16

IT DOESN’T TAKE MUCH IMAGINATION TO SEE THE DRAMATIC IMPACT THIS

INNOVATION COULD HAVE ON GLOBAL LUXURY PROPERTY MARKETS


17

The World is Not Enough, originally featured in The Wealth Report 2014. To download your copy, visit thewealthreport.net

DOWN TO BUSINESSBut it’s not just the travel industry that is going galactic. Behind the telegenic images of Virgin Galactic’s SpaceShipTwo is a burgeoning industry investigating the commercial possibilities of space.

SPACE RESOURCESMining asteroids for precious metals and rare minerals might be an activity confined to computer games for now, but two companies – Planetary Resources and Deep Space Industries – are taking the prospect very seriously. Even the public sector has been prompted to consider the potential, with NASA’s recent launch of its Robotic Asteroid Prospector project.

Planetary Resources, backed in part by Google’s Larry Page and Eric Schmidt, is planning on launching a dedicated telescope into space as early as next year in order to get a better understanding of targeted asteroids.

While eyebrows have been raised in scientific circles regarding the economic viability of asteroid mining, the potential rewards appear compelling, if the significant technological challenges can be overcome.

To whet your appetite we have published a list of “asteroids to watch” at thewealthreport.net, confirming the potential value of the key space rocks that will be coming (relatively) close to Earth soon.

Assuming you are keen to get involved, make sure you have a good legal team. If other miners join you on your target asteroid you will find existing property law is slightly vague about settling ownership disputes in space.

PUBLIC OFFERINGHowever, the more immediate impact of this new extra-terrestrial investment is likely to be felt rather closer to home. While Richard Branson is currently focused on his Virgin Galactic spaceship, which will make him and his children astronauts later this year, he is also thinking about other applications for his space investment.

“I believe our small satellite launch plans could radically improve life on Earth, maybe by enabling space-based solar power stations or providing cheap internet and phone coverage.”

“Virgin Galactic may well become the most valuable company we have ever launched. There’s a chance we’ll take it public, enabling investors large and small to join the ride. Watch this space.”

BREAKFAST IN MAYFAIR COULD EASILY BE FOLLOWED BY LUNCH OVERLOOKING

SYDNEY OPERA HOUSE


DRIVEN TO GO THE TO EXCEED OUR CLIENTS’ EXPECTATIONS EXTRA MILE

3,855 homes

88 farms

1Power Station3

402

200 houses with tennis courts

2,409 homes Let

1

4,253 cups of tea, kindly made for our agents

1,000

51,934

houses with swimming pools

orchards

Car breakdown on the way to a viewing

active buyers joined our database

mortgages arranged via Knight Frank Finance

PR

OF

ESSION

ALISM

T

HA

T IS U

NR

IVALLED

So far in Property Intelligence we have avoided talking about ourselves and focused on content that was useful, interesting or fun. For that reason, we hope you won’t mind us taking a couple of pages to tell you about some of the things we’ve done in the past 18 months.

ABOUT US

TEA

MW

OR

K

AT

TH

E H

EA

RT

OF

EV

ERY

TH

ING

WE

DO

18

Sold

in the

pas

t 18

mon

ths

1,388,189 sq ft of office space let

office space beingmarketed in the

310 metre Shard

£7.75 BILLIONinvestment advised on

Over

10 cinemas acquired off market


1

335 offices

52 countries

1

12,000 employees

A property search in

16 languages

17 awards for excellence

Over

2,000 tweets

6,364,737

47,161

56

acres of land managed

£500MILLION of rural property valued

30

846

Knight Frank experts spoke at

duck race sponsored3

TRUST & INTEGRITY AT EVERY LEVEL

BUYING & SELLING RESIDENTIAL PROPERTY

PROPERTY IN CENTRAL LONDONNoel Flint

+44 20 7861 5020

UK PROPERTY OUTSIDE OF LONDON Rupert Sweeting +44 20 7861 1078

UK FARMS AND ESTATESClive Hopkins

+44 20 7861 1064

PROPERTY OUTSIDE OF THE UKPaddy Dring

+44 20 7861 1061

KNIGHT FRANK’S PROPERTY SEARCH SERVICE

Philip Selway +44 20 7591 2647

FINANCING AND MORTGAGES Simon Gammon

+44 20 7268 2581

RESIDENTIAL DEVELOPMENTS

Ian Marris +44 20 7861 5404

CONSULTANCY SERVICES

James Thompson +44 20 7861 1075

RENTING, LETTING AND PROPERTY MANAGEMENT

Tim Hyatt +44 20 7861 5044

COUNTRY HOUSE CONSULTANCY Angus Harley

+44 1488 688511

Interview with Boris Johnson

app downloads

281,380

people advised on HS2

renewable energy installations

27 seminars

£103,000

of our employees cycled from London to Cannes for charity

farms

Over

5,139 press mentions

60 well-read publications distributed

@www.knightfrank.com

19

films made

raised at our Day of Giving for charity

INDEPENDENT PROPERTY CONSULTANCY IN THE WORLDLARGEST

Over

Over

web visits


WWW.KNIGHTFRANK.COM

property intelligence

Documents