The developer behind the £8bn regeneration of Battersea Power Station has sought to quash fears of investors fleeing the site after warning signs that a glut in new build homes, tougher tax rules, and currency turmoil in foreign markets is weighing on London's prime property market.
Speaking to City A.M. in Cannes, Rob Tincknell, chief executive of Battersea Power Station Development Company conceded that it has witnessed a slowdown, mainly as a result of George Osborne’s stamp duty reforms at the end of 2014, which introduced a higher tax rate of 12 per cent for homes over £1.5m.
“We have had three very exceptional years for residential and the market has now returned to what I would call normal market conditions. And stamp duty has had a relatively big impact on the market.”
However, he insisted that interest from both British and foreign buyers remained buoyant, with £110m sales completed in the last four months and over 1,500 flats in the iconic red building and the rest of the development sold to date.
“That £110m is less than what we have seen in previous quarters but is still a pretty good figure and is strong evidence of a scheme where there is good demand,” he said. His comments come after City A.M. revealed that more than 76 flats listed for resale had had their asking prices slashed since the third quarter of last year, according to Propcision, with some seeing discounts as large as 38 per cent and raising questions over foreign investors exiting the scheme.
But Tincknell said that whilst asking prices on some resales had been cut, buyers were still get an average uplift of 30 per cent following those discounts and with only 10 per cent reassigned in the first phase.
Responding to criticism that not enough flats have been sold to Londoners, he further argued that foreign investors were needed to help buy flats off flat plan at the early stages, with the number of British buyers rising closer to completion. Of the 10 resales completed a month, 70 per cent are to UK buyers, the company claims.
But Tincknell said that whilst asking prices on some resales had been cut, buyers were still get an average uplift of 30 per cent following those discounts and with only 10 per cent reassigned in the first phase. The company is now turning its focus to commercial space and will today announce a raft of local businesses moving into the first phase of the scheme – Circus West.
These include a new branch of Peckham-based restaurant Pedler and other neighbourhood shops such as florists, butchers and bakers – shops that Tincknell says will create a sense of local community.
In the next three months the company also hopes to announce its first office tenant, with Time Warner song the names understood to be looking at the scheme.
With just months to go before the first homes on site at Circus West, Tincknell insists that Battersea, with the support of its Malaysian owners, is still going at full speed: "We are doing really well. It is not as good as it has been but it is certainly not a panic."