One of London’s most expensive properties has sold after its asking price was sharply reduced to £20.95 million (US$29 million) from £37.5 million (US$48 million).
Cresswell House, a five-level home in Chelsea, had been on the market since 2016, according to listing records, before selling late last week, according to James Pace, partner and office head of Knight Frank LLP in Chelsea (the brokerage co-listed the property with Savills).
An exterior view of the house
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An investment company bought the five-bedroom mews house in 2012 for £8.1 million, according to The Times. Developer Albyns Ltd. extensively renovated it, turning the 3,000-square-foot property into 11,000 square feet, largely by expanding underground.
Albyns added a sub-basement and utility room below an enlarged basement, according to online records. The enlarged basement has a 42-foot pool, a gym, spa, and a 500-bottle wine gallery. They also added a third level above ground with a mansard roof, and a six-person elevator for all five levels. The garage includes a car stacker. Staff quarters are in a separate section in the basement.
The Jersey trust holding company recently declared bankruptcy; soon after, the asking price for the house was cut nearly 50%, and the property sold just days later. The final sales price and the buyer were not disclosed.
Although the price cut was viewed by the U.K. press as a sign that a property price bubble was bursting, it’s too soon for doom and gloom.
"It’s fair to say that the top end of the market did see pretty hefty price rises from 2011 onward," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors in London. "Trying to value a property in that sort of marketplace is always a challenge. With unique properties, you’re looking for the special buyer, so they’re not especially indicative of the rest of the market."
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In London and the South East U.K., valuations rose sharply over the past few years and now the increases are less sharp. In the South West, Midlands, North West and Northern Ireland, Mr. Rubinsohn said, "the market is acting much more normally. They never saw the spectacular gains we saw in London. Prices are ticking up, but not drastically."
A 2016 increase in stamp duty tax on second homes along with some other changes to the way corporate real estate purchases are treated, plus uncertainties around Brexit, have weighed on the market.
"The stamp duty really put the brakes on things," Mr. Pace said.
"People had to reduce prices accordingly," he said. Cresswell House "isn’t the only example of where prices have had to come off. Where prices have come down, we have seen considerable interest."