Welcome back to Women in Property Investment (or WIPI), where we focus on inspiring women who are making their mark in property investment. This week, we catch up with Hannah Aykroyd, founder of Aykroyd & Co and adviser to investors and developers specialising in the PCL market, who tells us about her journey in property so far.
I had originally set my sights on being a lawyer. However, whilst undergoing my law degree, I took a work experience role with a property company and rather surprised myself when I fell in love with the world of property.
After I completed my degree, I embarked on a career in property, beginning on the selling side before moving across to the advisory side. I’m much more comfortable working as an advisor and buying agent because I can always solely focus on representing the buyer’s interests, and importantly flag when there is an issue rather than gloss over as an estate agent might be tempted to.
After over a decade working in the prime London market, I developed a clear vision of the ideal boutique property advisory firm. I wanted to offer a highly personalised, discreet service to ultra-high net-worth (UHNW) clients from both the UK and abroad. I knew this could only be done with a small, extremely professional, tight-knit team working with a handful of clients at a time.
My opportunity came in early 2018, when I set up Aykroyd & Co. We had a hugely successful inaugural year, completing over £60 million in transactions. At the start of 2019 we were named one of the UK’s top 10 buying agents, alongside much larger and more established agencies, which was very gratifying. We work with a wide range of property investors from the UK and overseas, which gives us terrific insight.
As a team, we also have considerable personal experience investing in property. For example, I have just finished a full renovation involving significant structural works of an unmodernised property in Earl’s Court, while a colleague has taken advantage of the opportunity inherent in a short-term lease. We are always on the lookout for ways to create value for our clients and ourselves.
Our clients are evenly split between British and international clients, and they are a mixture of private individuals or families and investment groups. One thing they generally have in common is that they are resource-rich but time poor - this is pretty universal among high-end clients.
We work incredibly hard to ensure not a moment of our clients’ time is wasted. For example, for an average client search, we preview 40-50 of the best properties and carry out extensive research on the final shortlist before we even show a single property to our clients. This is time-consuming for us but ensures our clients’ time is used most effectively.
The market at this level can be extremely competitive – particularly for the sort of best-in-class properties we recommend. Once a property is found, we provide comprehensive real-time data analytics and strategise on how to best approach negotiations. Our clients benefit from our strong track record, which enables us to negotiate firmly without risking the deal. The lower the price per sq ft achieved, the happier we are.
One thing our very disparate clients have in common is an appreciation of the efficacy of bringing in the right professionals to support their aims.
Over the past 25 years, Prime Central London residential property has been one of the best-performing asset classes in the world. My long-term forecast for Prime Central London property is extremely positive, and I’m not alone. There is a huge amount of pent up demand for Prime Central London property that is beginning to be released.
Why? Discounts of up to 20% from the most recent high of five years ago, currency discounts for US dollar-based buyers - and people simply growing tired of waiting for a resolution to Brexit. The election result has done much to provide certainty in the sense that Brexit will happen but, more importantly, that the threat of Corbyn is avoided.
Along with many in the property industry, we believe the bottom of the market is past and prices are on the rise. That said, we expect price increases to be gradual. There is a clear opportunity for the savvy investor, but those who want to buy should be acting now.
What we are expecting to see is a rather more significant increase in transaction levels. This was already beginning to happen in Q3 and Q4 of 2019. The main issue the PCL market has been facing is not lack of demand – rather, it is a lack of good-quality, market-priced properties. Many vendors who are able to retain are holding, while others are unrealistic in their pricing.
Another interesting trend is the growth of the ‘off-market market’. Vendors needing to sell are often opting for a discreet, off-market approach in order to protect pricing data. Having representation to source these difficult-to-find properties is imperative.
The current political landscape remains uncertain, and so it is extremely difficult to make predictions. However, there are interesting opportunities for committed buyers. As always, the focus should only be on best-in-class assets as these will be better protected in a downturn. Then, negotiate firmly, and ideally look to hold for 10+ years in order to help mitigate the variances in the market and SDLT outlay.
When speaking to clients and potential clients who are based elsewhere in the world, the general view is that Brexit is a small blip in comparison to what is going on at home. I think it’s important to keep this in mind, and to focus on all the strengths that make London one of the world’s leading cities to live, work, and invest.
The recent pledge by the Conservative party to add a 3% surcharge to existing SDLT for overseas buyers has proven to be good vote-winning tactic. However, given the political uncertainty, we need to be encouraging people to invest in the UK and specifically in London. The evidence is clear that a high rate of SDLT stagnates the property market.
Transaction levels have dropped dramatically, with most of the reduction occurring after the introduction of higher rates of SDLT and before the Brexit referendum. Any addition to SDLT rates will further risk putting the brakes on the property market at a time when we desperately need stimulus.
A better option is the recently floated suggestion that both the threshold for first-time buyers and the higher rate SDLT be raised. For the normal buyer the amount of money required for stamp duty is prohibitively high, in addition to having to fund the standard minimum deposit of 20%. We should be encouraging overseas investment and supporting first-time British buyers by reducing SDLT. If I were in charge, that’s where I would start. I would be looking to stimulate the volume of transactions with lower rates of SDLT because high transaction levels are critical to a healthy market.
There are many women as well as men working in the field, and I think each individual brings a different set of strengths and weaknesses, aside from their gender. Some women may find that they have to work a bit harder to earn professional respect and authority, although I feel fortunate that I haven’t knowingly encountered any barriers.
I am passionate about what I do and have remained focused on growing the business and surrounding myself with intelligent, motivated and professional people within my network. If you work hard and believe in what you are building, people will respect you.
This is part of an ongoing series focusing on women in property investment, with the next article appearing on January 31.