Lance Paul put his home in West London on the market last May with a £1.5 million (Dh7.3m) price tag. A year on, the retired animator is asking £1.1m and still hasn’t found a buyer.
Now, after dozens of viewings that came to nothing and a few low-ball bids, the 71-year-old has an offer that’s agonisingly close to the floor he promised himself he would never go below. He just might accept it.
“The fear from my point of view is because things are volatile, it could go down even further,” Mr Paul told Bloomberg.
Similar deliberations are playing out across London as sellers weigh whether to take what they can get in a falling market or sit tight in the hope the slump will be short-lived. For most of the past four decades - through Tory and Labour-led governments and across financial booms and busts - sitting tight proved a wise course. The question now is whether Brexit and the gradual withdrawal of easy-money policies around the globe will turn the current stumble into something much worse.
“The party is over for the London housing market and the hangover is just beginning,” said Neal Hudson, founder of research firm Residential Analysts. “Lower demand due to Brexit or interest-rate rises could put further pressure on some home-owners and investors to sell.”
Since 1973, the year Britain joined the European Union, the average London home price climbed from just under £13,000 to about £474,000 - a 36-fold increase, according to Nationwide, the UK’s largest building society. The last big reversal occurred during the financial crisis, when prices dropped about 20 per cent. Since bottoming out in 2009, they’ve nearly doubled.
The declines this time have been modest. London recorded its first annual decrease in prices in more than eight years in February, a drop of 1 per cent, government data showed. That said, pricier central districts registered sharper falls and forward-looking indicators, such as the time it takes to sell homes, point to further declines.
Pessimists fret that some of the pillars that underpinned the long London property boom - from rock-bottom interest rates to generous government support - are under threat.
In the US, 10-year Treasury yields have reached the highest in almost seven six years, narrowing the premium that real estate has commanded over bonds for the past decade. That dents the relative appeal of London property, especially for those from outside the country.
International buyers made more than half of home purchases in prime central London and almost a third in greater London in the second half of 2017, according to broker Hamptons International. Both overseas and UK investors who purchase homes to rent out have become an increasingly important part of the London market over the past decade, lured by higher returns on offer from rental property at a time of low interest rates.
“What happens to real estate if real interest rates go up? In the most simple form, values go down,” said William Hughes, managing director and global head of research and strategy for real estate and private markets at UBS’ asset management unit. “If the political situation in the UK causes the economy to struggle while global rates were to rise, then that would be a double whammy for London.”
It is not only homeowners feeling the pinch. London-focused estate agent Foxtons posted a 15 per cent drop in first-quarter revenue to £24.5m as it was hit by lower sales and lettings income, according to Reuters.
Foxtons, which was once a symbol of the British capital's property boom, has warned since as early as 2014 that the once runaway market was cooling as prices fall particularly in the city centre.
The firm, known for its coffee shop-style offices, said revenue from its lettings business had fallen in the first three months of 2018 due to a slow start in January and the timing of Easter but that it had seen an up-tick in April.
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Read more:
UK house prices remain stuck in doldrums
UK millennials face a poorer future than their parents
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"Whilst the sales pipeline has begun to improve it remains below where it was this time last year. The performance of our lettings business improved towards the end of the quarter and throughout April," it said.
Changes the government made over the past few years to deter property speculators could also weigh. The reforms included an increase in sales taxes on second-home purchases and the gradual elimination of tax relief for mortgage interest on rental homes, which will eventually disappear in 2020. One popular initiative that’s helped support the property market, the government’s “Help to Buy” loan plan, is slated to end in 2021, unless it’s extended again, Bloomberg said.
And looming over everything is the potential impact of Britain’s withdrawal from the European Union. Less than a year from the planned exit date, the terms of that rupture remain as murky as ever.
“What happens if rents fall 20 per cent because we had a bad Brexit and no one wants to come here?” said Richard Donnell, director of research and insight at Hometrack, which provides data and analysis on the property market.
The city has had a good run. London’s best districts have seen prices climb by more than 500 per cent since 1989, according to an index published by broker Knight Frank. That compares with an almost 350 per cent increase in the average value of condominiums and co-ops in Manhattan in that period, data compiled by Miller Samuel show.
Not everyone sees Brexit, or even higher interest rates, upending the property market. The pound’s slump after Britons voted to leave in June 2016 cushioned the blow by making London homes more affordable to buyers from abroad. The prospect of a weaker currency remains an insurance policy against a disorderly Brexit, said Savvas Savouri, the chief economist at Toscafund Asset Management. He’s optimistic about the housing market and supports leaving the EU.
He does see one big political risk beyond Brexit, however: the potential ascension of Labour party leader and self-proclaimed socialist Jeremy Corbyn to the premiership. At last year’s general election, Mr Corbyn promised to introduce rent controls, among other proposals that hark back to a less business-friendly era.
Should a Labour government materialise, “the pound will crash”, Mr Savouri said. That would lead to “a genuine stampede” of capital out of the UK, he said.
All of these “what ifs” complicate matters for owners like Mr Paul, who’s considering the offer for his Shepherd’s Bush home. He wants to raise money for medical bills, to top up his modest pension and to move closer to his son, who was forced out of London by sky-high home prices.
“We want to move now - so we have to accept that if we hung on we could get more,” he said. “But I don’t think we would be out of this house for another three years.”
While older homeowners like Mr Paul are having difficulties selling, experts say more and more young people are having to rely on their parents to get on to the property ladder in the firts place.
"Today's young people, millennials, are half as likely to own their own home at the age of 30 as baby boomers were in the past," Lindsay Judge, a senior research and policy analyst at British think-tank Resolution Foundation, told Reuters.
Baby boomers are considered to be people born before the mid-1960s while millennials are those born between 1981 and 2000.
In the 1980s and 1990s, it took the typical young household about three years to save for a deposit. Now it takes 19 years, according to a Resolution Foundation statistic that Ms Judge called "shocking".
"This is largely due to increased barriers to entry because of higher house prices, lower earnings growth and tighter credit availability - so they've got a triple whammy," she said.
Over the past 20 years home ownership in Britain has plummeted among young adults, who have had to pay more toward pensions while bearing the brunt of weak wage growth since the financial crisis.
As part of a push to help people on to the housing ladder, the government has set an ambitious target of building 300,000 new homes a year by the mid-2020s.
"Over the decades there's been a lack of investment in truly affordable housing," said Jon Sparkes, the chief executive of the homelessness charity Crisis.
"There clearly aren't enough houses being built overall."
Baftas 2020 winners
BEST FILM
- 1917 - Pippa Harris, Callum McDougall, Sam Mendes, Jayne-Ann Tenggren
- THE IRISHMAN - Robert De Niro, Jane Rosenthal, Martin Scorsese, Emma Tillinger Koskoff
- JOKER - Bradley Cooper, Todd Phillips, Emma Tillinger Koskoff
- ONCE UPON A TIME… IN HOLLYWOOD - David Heyman, Shannon McIntosh, Quentin Tarantino
- PARASITE - Bong Joon-ho, Kwak Sin-ae
DIRECTOR
- 1917 - Sam Mendes
- THE IRISHMAN - Martin Scorsese
- JOKER - Todd Phillips
- ONCE UPON A TIME… IN HOLLYWOOD - Quentin Tarantino
- PARASITE - Bong Joon-ho
OUTSTANDING BRITISH FILM
- 1917 - Sam Mendes, Pippa Harris, Callum McDougall, Jayne-Ann Tenggren, Krysty Wilson-Cairns
- BAIT - Mark Jenkin, Kate Byers, Linn Waite
- FOR SAMA - Waad al-Kateab, Edward Watts
- ROCKETMAN - Dexter Fletcher, Adam Bohling, David Furnish, David Reid, Matthew Vaughn, Lee Hall
- SORRY WE MISSED YOU - Ken Loach, Rebecca O’Brien, Paul Laverty
- THE TWO POPES - Fernando Meirelles, Jonathan Eirich, Dan Lin, Tracey Seaward, Anthony McCarten
FILM NOT IN THE ENGLISH LANGUAGE
- THE FAREWELL - Lulu Wang, Daniele Melia
- FOR SAMA - Waad al-Kateab, Edward Watts
- PAIN AND GLORY - Pedro Almodóvar, Agustín Almodóvar
- PARASITE - Bong Joon-ho
- PORTRAIT OF A LADY ON FIRE - Céline Sciamma, Bénédicte Couvreur
LEADING ACTRESS
- JESSIE BUCKLEY - Wild Rose
- SCARLETT JOHANSSON - Marriage Story
- SAOIRSE RONAN - Little Women
- CHARLIZE THERON - Bombshell
- RENÉE ZELLWEGER - Judy
LEADING ACTOR
- LEONARDO DICAPRIO - Once Upon a Time… In Hollywood
- ADAM DRIVER - Marriage Story
- TARON EGERTON - Rocketman
- JOAQUIN PHOENIX - Joker
- JONATHAN PRYCE - The Two Popes
SUPPORTING ACTOR
- TOM HANKS - A Beautiful Day in the Neighborhood
- ANTHONY HOPKINS - The Two Popes
- AL PACINO - The Irishman
- JOE PESCI - The Irishman
- BRAD PITT - Once Upon a Time… in Hollywood
SUPPORTING ACTRESS
- LAURA DERN - Marriage Story
- SCARLETT JOHANSSON - Jojo Rabbit
- FLORENCE PUGH - Little Women
- MARGOT ROBBIE - Bombshell
- MARGOT ROBBIE - Once Upon a Time… in Hollywood
ADAPTED SCREENPLAY
- THE IRISHMAN - Steven Zaillian
- JOJO RABBIT - Taika Waititi
- JOKER - Todd Phillips, Scott Silver
- LITTLE WOMEN - Greta Gerwig
- THE TWO POPES - Anthony McCarten
ORIGINAL SCREENPLAY
- BOOKSMART - Susanna Fogel, Emily Halpern, Sarah Haskins, Katie Silberman
- KNIVES OUT - Rian Johnson
- MARRIAGE STORY - Noah Baumbach
- ONCE UPON A TIME… IN HOLLYWOOD - Quentin Tarantino
- PARASITE - Han Jin Won, Bong Joon ho
DOCUMENTARY
- AMERICAN FACTORY - Steven Bognar, Julia Reichert
- APOLLO 11 - Todd Douglas Miller
- DIEGO MARADONA - Asif Kapadia
- FOR SAMA - Waad al-Kateab, Edward Watts
- THE GREAT HACK - Karim Amer, Jehane Noujaime
OUTSTANDING DEBUT BY A BRITISH WRITER, DIRECTOR OR PRODUCER
- BAIT - Mark Jenkin (Writer/Director), Kate Byers, Linn Waite (Producers)
- FOR SAMA - Waad al-Kateab (Director/Producer), Edward Watts (Director)
- MAIDEN - Alex Holmes (Director)
- ONLY YOU - Harry Wootliff (Writer/Director)
- RETABLO - Álvaro Delgado-Aparicio (Writer/Director)
ANIMATED FILM
- FROZEN 2 - Chris Buck, Jennifer Lee, Peter Del Vecho
- KLAUS - Sergio Pablos, Jinko Gotoh
- A SHAUN THE SHEEP MOVIE: FARMAGEDDON - Will Becher, Richard Phelan, Paul Kewley
- TOY STORY 4 - Josh Cooley, Mark Nielsen
CASTING
- JOKER - Shayna Markowitz
- MARRIAGE STORY - Douglas Aibel, Francine Maisler
- ONCE UPON A TIME… IN HOLLYWOOD - Victoria Thomas
- THE PERSONAL HISTORY OF DAVID COPPERFIELD - Sarah Crowe
- THE TWO POPES - Nina Gold
EE RISING STAR AWARD (voted for by the public)
- AWKWAFINA
- JACK LOWDEN
- KAITLYN DEVER
- KELVIN HARRISON JR.
- MICHEAL WARD
CINEMATOGRAPHY
- 1917 - Roger Deakins
- THE IRISHMAN - Rodrigo Prieto
- JOKER - Lawrence Sher
- LE MANS ’66 - Phedon Papamichael
- THE LIGHTHOUSE - Jarin Blaschke
EDITING
- THE IRISHMAN - Thelma Schoonmaker
- JOJO RABBIT - Tom Eagles
- JOKER - Jeff Groth
- LE MANS ’66 - Andrew Buckland, Michael McCusker
- ONCE UPON A TIME… IN HOLLYWOOD - Fred Raskin
COSTUME DESIGN
- THE IRISHMAN - Christopher Peterson, Sandy Powell
- JOJO RABBIT - Mayes C. Rubeo
- JUDY - Jany Temime
- LITTLE WOMEN - Jacqueline Durran
- ONCE UPON A TIME… IN HOLLYWOOD - Arianne Phillips
PRODUCTION DESIGN
- 1917 - Dennis Gassner, Lee Sandales
- THE IRISHMAN - Bob Shaw, Regina Graves
- JOJO RABBIT - Ra Vincent, Nora Sopková
- JOKER - Mark Friedberg, Kris Moran
- ONCE UPON A TIME… IN HOLLYWOOD - Barbara Ling, Nancy Haigh
SOUND
- 1917 - Scott Millan, Oliver Tarney, Rachael Tate, Mark Taylor, Stuart Wilson
- JOKER - Tod Maitland, Alan Robert Murray, Tom Ozanich, Dean Zupancic
- LE MANS ’66 - David Giammarco, Paul Massey, Steven A. Morrow, Donald Sylvester
- ROCKETMAN - Matthew Collinge, John Hayes, Mike Prestwood Smith, Danny Sheehan
- STAR WARS: THE RISE OF SKYWALKER - David Acord, Andy Nelson, Christopher Scarabosio, Stuart Wilson, Matthew Wood
ORIGINAL SCORE
- 1917 - Thomas Newman
- JOJO RABBIT - Michael Giacchino
- JOKER - Hildur Guđnadóttir
- LITTLE WOMEN - Alexandre Desplat
- STAR WARS: THE RISE OF SKYWALKER - John Williams
SPECIAL VISUAL EFFECTS
- 1917 - Greg Butler, Guillaume Rocheron, Dominic Tuohy
- AVENGERS: ENDGAME - Dan Deleeuw, Dan Sudick
- THE IRISHMAN - Leandro Estebecorena, Stephane Grabli, Pablo Helman
- THE LION KING - Andrew R. Jones, Robert Legato, Elliot Newman, Adam Valdez
- STAR WARS: THE RISE OF SKYWALKER - Roger Guyett, Paul Kavanagh, Neal Scanlan, Dominic Tuohy
MAKE UP & HAIR
- 1917 - Naomi Donne
- BOMBSHELL - Vivian Baker, Kazu Hiro, Anne Morgan
- JOKER - Kay Georgiou, Nicki Ledermann
- JUDY - Jeremy Woodhead
- ROCKETMAN - Lizzie Yianni Georgiou
BRITISH SHORT FILM
- AZAAR - Myriam Raja, Nathanael Baring
- GOLDFISH - Hector Dockrill, Harri Kamalanathan, Benedict Turnbull, Laura Dockrill
- KAMALI - Sasha Rainbow, Rosalind Croad
- LEARNING TO SKATEBOARD IN A WARZONE (IF YOU’RE A GIRL) - Carol Dysinger, Elena Andreicheva
- THE TRAP - Lena Headey, Anthony Fitzgerald
BRITISH SHORT ANIMATION
- GRANDAD WAS A ROMANTIC - Maryam Mohajer
- IN HER BOOTS - Kathrin Steinbacher
- THE MAGIC BOAT - Naaman Azh
Itcan profile
Founders: Mansour Althani and Abdullah Althani
Based: Business Bay, with offices in Saudi Arabia, Egypt and India
Sector: Technology, digital marketing and e-commerce
Size: 70 employees
Revenue: On track to make Dh100 million in revenue this year since its 2015 launch
Funding: Self-funded to date
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It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
RESULTS
Tottenham 1
Jan Vertonghen 13'
Norwich 1
Josip Drmic 78'
2-3 on penalties
The specs
Engine: 6.2-litre V8
Transmission: seven-speed auto
Power: 420 bhp
Torque: 624Nm
Price: from Dh293,200
On sale: now
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