Without further ado…
A series of measures have often been described as ‘the final straw’ for the high-end London market - the ATED, the additional homes stamp duty surcharge, and very recently the non-domiciled overseas buyer SDLT surcharge…how confident are you that high-end London will bounce back from the pandemic and Brexit?
There is little doubt that the tax changes over the past few years have made buying and owning property in the UK more expensive for overseas buyers. Although the effect has been felt more across Prime London where the market has been driven in a large part by overseas buyers, some of these increased costs have been offset by lower values and the weakness of the pound.
Central London property is widely regarded as a AAA-grade asset that most of the world’s wealthy want in their portfolio, regardless of the fact that it is now more expensive. Aside from the investment angle, London will continue as one of the great global cities where people flock to for business, education, culture and recreation and so people are able to make good use of their investment when they or their family come to London.
Obviously, the pandemic has had an impact on the high-end London market like it has everywhere else, but even during the worst of it last year, we saw almost zero ‘fire sales’ and most sellers were happy to ride the wave and wait for the market to recover or the right buyer to come along.
Those that felt they wanted to sell were quickly able to find buyers who knew the market well enough to know that they were getting a very rare opportunity to buy at a level which wouldn’t last for long.
Central London property is a buy-and-hold investment - especially because of the stamp duty – and we are seeing much less churn than we used to, with some people holding on to their property longer than they normally would in order to break even before they sell.
Will the top-end London market bounce back? Yes. Values have already recovered a bit since last March but the second stage of the recovery will occur when the overseas buyers that have been unable to get to London for over a year finally get to return. I think there will be a lot of pent-up demand from these buyers so I wouldn’t be surprised to see a second mini-bounce.
It’s recently been suggested by investors that Foxtons widens its network to go beyond London to reduce the risk of being London-only. Is there merit in that idea for Chestertons?
Chestertons is well established as an international brand with operations across many countries, but our UK business is London-focused and our current business model is very much geared towards this. There is a huge opportunity for growth here and we consider ourselves to be perfectly positioned to do so. However, we wouldn’t rule anything out, especially high-volume, high-value commuter locations that feed into and out of London.
You’ve said it’s your aim to become the greenest large estate agency in the UK – how are you going about doing this? And why is sustainability so important?
Following our decision to move our entire fleet to electric BMW i3s in 2019, Chestertons this year became the first large agency in the UK to be certified as Net Zero Carbon. We believe that environmental change is one of the biggest challenges the world faces and everyone has a responsibility to do their part.
For us, the journey has just started and we have an exciting range of initiatives that we will be rolling out over the coming months. We have, in fact, already released a short video on how people can change their driving habits to become more fuel efficient and are about to publish a ‘Green Guide’ on positive changes that people can make around the house.
We will also be announcing an exciting new charitable partnership very soon.
As one of the oldest estate agents in the world, does the firm still take inspiration from the way your founder, Charles Chesterton, did things at the very start of the 19th century?
Charles Chesterton opened his first office on Kensington High Street in 1805, and we have maintained a continual presence there ever since, which is important not just for us, but for our clients who expect a strong local representation as well as top service and real value.
As well as having a true entrepreneurial spirit (he started his career as a ‘poulterer’), Charles Chesterton was obviously an exceptional agent with an ability to build relationships with people that would last years, if not generations.
We work hard to ensure that we continue running Chestertons with those same values: we have enjoyed success because we train and recruit the best agents, we work hard, are unafraid to innovate and put an absolute focus on our clients and building lasting relationships with them.
Is the agency world moving fast enough with digital solutions? Or is it way behind consumers?
There are definitely some areas of the agency world that have benefited from digital solutions, such as data management, property management tools and AML processes, but I think it is fair to say that the fundamentals of our business haven’t changed too drastically.
However, this isn’t to say that we are way behind consumers; I think, in fact, that we are listening to consumers and making changes where they want changes and changes are practical.
I passionately believe in digitalisation and using technology to help us do our jobs more efficiently and effectively and delivering a better service to our clients, but the one thing that we have no interest in trying to digitalise is the personal interaction between an agent and their buyer, seller, tenant or landlord.
This is where our value lays and it is something that cannot be replaced by an algorithm.
You’ve been with the company since September 2012 – what has been the biggest change you’ve seen in that time? And the biggest change in the market?
I think the pandemic-induced market shut-down for six weeks last spring is probably the biggest change that anyone currently working in the industry has ever seen. It was a unique situation that presented so many challenges that none of us had ever faced before, and certainly not at the same time. Rules (that were vague at the best of times) were changing on a daily basis and [we] were trying to adapt in a way that best protected our clients, customers, staff and the wider public.
Thankfully, we were quickly able to mobilise our staff to work from home and therefore keep most people working full time. We were also quick to seize on the potential of video viewings and in a very short space of time, managed to have the majority of our properties available to view virtually.
What was the biggest challenge you faced during the pandemic? And the biggest lesson you and your team learned?
The biggest challenge was trying to interpret the very loose guidelines that we were given and try and work out what was going on and what we were able to do operationally. To this end, we were talking to lawyers and advisers every day and my team did a phenomenal job of supporting the decisions we made and communicating those to staff and clients.
The lesson has to be one of the absolute necessity to communicate clearly, regularly and honestly and what a huge difference it makes when you manage to do that.
First and foremost, our top priority was to keep our clients and employees safe. As such, and under consideration of government guidelines, we kept all of our offices fully operational. Not only did this allow us to support our clients during a time they needed us the most; it also meant we were able to protect our staff’s jobs and prevent the business from an exponential drop off in revenue.
This meant, compared to our competitors that shut up shop for two or three months, we secured a big growth in market share.
Thanks for the brilliant insight, Guy. In Conservation Today will appear once a month from now on, so keep your eyes peeled for the next edition in July.
*Nat Daniels is CEO of Angels Media, publishers of Estate Agent Today and Letting Agent Today. You can follow him on Twitter @NatDaniels. He also writes a regular column – Property Natter – which appears in the Weekend Features section every two weeks.