Tim Macpherson of Carter Jonas on PCL’s revival, memorable deals & what high-end buyers are really after

By PrimeResi Editor

PrimeResi meets Carter Jonas’ longstanding PCL specialist Tim Macpherson to discuss the current state of play in the golden postcodes, the capital’s most impressive new developments, his most memorable deal to date - and what today’s buyers are really looking for (and no, it’s not outside space)…

You joined Carter Jonas back in 2004; which have been the most seismic market shifts in your career, and how do the events of the last two years compare?

Without doubt, the price increases over the 22 years I’ve been an agent (18 of which have been with Carter Jonas). They have been simply staggering. What has also been amazing is the regeneration of Prime Central London, with the incredible quality of the new builds and international clientele that have entered the market. The last two years however – incomparable.

We’ve had various periods of growth and decline over the years, but the last two years has been an something never seen before

We’ve had various periods of growth and decline over the years, but the last two years has been an something never seen before. I do feel Carter Jonas has navigated the pandemic quite well for two reasons however – the high end of the market has remained in play, with less activity, but is still generating good traction, and furthermore, our agency is a multi-disciplinary business, including client management, sales, lettings etc., so we have had a better than expected performance during an extremely challenging time.

A number of analysts and research houses are predicting price growth well in excess of 20% in PCL over the next five years; do you share this optimism?

I do share in the optimism of the marketplace, however, with the current situation in Ukraine and coronavirus still delaying international travel, I would expect this year’s growth may be reduced, but we expect it will accelerate over the next four years with growth anticipated to be between 15 to 18%.

Which specific areas of PCL are you expecting to outperform in the coming year(s)?

I have my eye on Mayfair, Belgravia, Notting Hill and Bayswater, along with Regent’s Park. I expect them to continue to gather pace and outperform the rest of the market – they are definitely markets to watch.

Bayswater is one of the top areas to watch, according to Macpherson (Credit: The Whiteley)

What type of stock is proving especially popular at the moment; and which other buyer trends are you seeing at the top of the market?

Unsurprisingly, outside space is an absolute premium, but interestingly, it is very rarely used after the purchaser has taken the time to acquire it! It is widely acknowledged that outside space drives a premium, but what we have found buyers are really after is being able to live in a self-contained way – it can still be in an apartment rather than a house, but the property needs facilities and amenities. This may include staff quarters, a garage or luxury amenities such as spa facilities.

Buyers want to feel like they don’t need to step out the building for anything

Simply, buyers want to feel like they don’t need to step out the building for anything.

Right at the top of the market, we’re undertaking a huge number of searches for detached houses in Prime Central London – which are really rare gems. We’ve experienced the highest applicant intake ever for that type of property.

With daily coverage of soaring prices, how hard is it managing clients’ expectations right now – and are you seeing lots of unrealistic pricing? What advice would you have for those entering the market at this time?

With regards to unrealistic prices, we have seen quite a bit of this. If you price an instruction correctly, the average sale time is within three months, with only a 1% discount on the asking price, but if you have a property that is overpriced, that remains unsold for a year, the average discount becomes 14% (according to LonRes 2022).

At all times, we’d advise vendors to either seek formal representation or seek an agent you trust. In the current climate, we have quite a lot of clients who feel they shouldn’t sell until they have found a new property. This is less apparent in Mayfair than in other areas, as it is an investment trading market, rather than family market, but it is still a key factor in our ‘stalled’ market.

Many estate agents adapted swiftly to the socially-distanced world in 2020 (e.g. remote viewings); are there any changes that Carter Jonas will be adopting long-term?

Remote viewings and video tours are here to stay, and I feel this is also to the benefit of the market. You can cut-out additional viewings, as the brochure and video tours count as the initial viewing. The market has changed forever – it’s online dating for properties!

How important is social media to your marketing campaigns, and what are the most effective channels for engaging with high net worth individuals?

Social media is more important than ever, though private contact channels, e.g. offices, directly by phone or increasingly through WhatsApp, is the best way to engage with high net worth clients. Despite some agencies selling properties online and through social media, it hasn’t caught the market completely. Social media does help to drive activity to brands and individuals and is excellent for brand awareness (especially Instagram), but nothing can still compare to the personal, one-on-one experience of an in-person agent.

How important are property portals, such as Rightmove, Zoopla and OnTheMarket, to the prime and super-prime market? What proportion of your instructions are off-market?

I’d say that property portals are very important to the mid-level to prime market, but less so for the super-prime market. Across the Prime Central London area, 40% of instructions I’ve recently handled have been off-market.

40% of Macpherson’s instructions in PCL have been off-market recently

Non-resident property buyers in the UK are now subject to a 2% SDLT surcharge; has this had any impact on buyer behaviour?

No. This hasn’t had any immediate impact just yet. As a matter of course, we find when a new tax comes into play, a period of negotiation ensues, with buyers trying to split the SDLT surcharge with the vendor. For example, if it is £1m, £100k will be taken off the offer price, which is normally accepted, with the vendor absorbing the remaining 1%. Eventually however, and as time goes on, the whole tax is absorbed by the buyer – it becomes the norm. The initial period tends to last around six months to a year, before it settles.

What impact will the new legislation around Overseas Entities have on the market, and the way high-end buyers operate?

This is yet to be seen. The high-end market is functioning very well across Prime Central London at this juncture. In terms of the way high-end buyers are operating, we have seen little change, however if individuals are from specific countries, or are people of political interest, it may become increasingly difficult to purchase.

Which new developments have you been particularly impressed by in the last few years? And which forthcoming projects should we be keeping an eye on?

The developments that have really shone out to me recently have been 80 Holland Park, the most recent offering from Christian Candy, 20 Grosvenor Square and 1 Grosvenor Square – the conclusion of sale and velocity of sale really impressed me on these.

In terms of what’s coming, I’m really looking forward to seeing John Caudwell’s Audley Square development, the Old War Office (OWO) is superb, Fenton Whelan’s Park Modern has stood out and finally Almacantar’s Marble Arch Place – this development has the most incredible view across Hyde Park – it feels like you can touch it! Plus, the eloquence they have bought to the interiors is another level.

Christian Candy’s 80 Holland Park

What’s the best or most memorable property you have sold to date?

I’m currently under offer on a building in Mayfair that would be my most memorable property in the last year. My favourite property to date, however, would be a Grade I listed mansion in Regent’s Park with two cottages and an acre of grounds I had the pleasure of listing around five years ago. I was the first agent who had been allowed entry into the house for 45 years and I didn’t expect the meeting to last more than 30 minutes, but 2.5 hours later, I was helping the client get her classic 1937 Rolls Royce started (a car that had featured at the Earls Court Motor Exhibition in 1937). We succeeded with both the car and the sale, so that was a memorable day!

If I’m honest, I think my lofty 6 ft 6 stature helped me, as the vendor was a delightful 6 ft 3 lady from The Netherlands, who appreciated someone who could look her in the eye!

A significant number of top agents have left the corporate world behind to start-up their own US-style brokerage operations lately; do you see this trend continuing and is it a good thing for the sector – and also buyers and vendors?

I think we’ll continue to see a huge number of leaders in large corporate agencies continuing to leave, to operate on their own, or in conjunction with a small group of other agents. It is a brilliant offering for the buyer, however, I think there is still a place for shop fronts and agents, because clients do like the idea of their property being marketed by an agent with an enticing window display.

On the other hand, diversity is brilliant for the sector. It is great that many can take their experience from larger corporate agencies to a non-corporate environment as clients do appreciate that personal touch, but there is still a need for small and mid-sized agencies in London.

What’s the best piece of advice you’ve been given?

Don’t move around too much in your career – make your career plan, stick to it and stick to what you love. For me, I do what I love. I have a career, not a job.