Money blog: The 'invisible' housing market that only super rich can ever see (2024)

By Emily Mee, Money team

The cost of living crisis has not slowed London's prime property boom.

A total of 54 properties in the capital sold for £15m or more last year, costing their buyers a combined £1.3bn.

Many of these properties are "invisible" to the average buyer - never making it to sites like Zoopla or Rightmove, and instead becoming part of an almost underground market accessible only to the super rich and in-the-know.

Marc Schneiderman, founder of luxury estate agency Arlington Residential, knows all about this market.

Super rich buyers will often have family offices (private wealth advisory firms) running the sale process, he says, along with top lawyers, surveyors, architects and designers - all of whom will be on standby and able to get to the property "very quickly".

It's often these teams who will approach estate agents or selling agents with specifics on what the super rich buyer is looking for - which can sometimes mean finding a property on a particular sought-after street.

In some cases, estate agents might be asked to approach the owners of properties to find out if they're willing to sell - and while this works "infrequently", it can help if the potential buyer is well-known.

Specific requests

"I've had a request recently from somebody with a car collection who wants to house that underground," Mr Schneiderman says.

This isn't too easy to find in central London, but he says there are a "few houses" in the Hampstead area.

Another tricky request is from somebody who wants a tennis court - "that's quite hard to find in certain parts of London" - and another who needs a recording studio, ideally in a separate building at the bottom of the garden.

Simon Tollit, partner at luxury selling agency Tedworth Property, says there is a "very large market" that is "invisible and off-market to the majority".

He reckons about half of luxury properties - those valued at about £10m-plus - will never end up on websites.

"That's where a buying agent or family office will provetheir worth because they have a relationship with people like us," he says.

The properties likely to get snapped up the quickest are known in the business as "triple A" homes.

Mr Tollit says that in London these might be the white porticoed properties on Eaton Square, in Belgravia, a period house in Chelsea, or a townhouse on Chester Square.

Wealthy buyers will often be looking for lateral apartments, a big roof terrace, high ceilings, a good outlook and lots of entertaining space.

There is still "great demand" for these places - as Mr Tollit points out, London is not growing in terms of prime housing stock.

But despite what many might expect, he says he has found dealing with the super rich "actually quite straightforward".

"They are super, super successful, know exactly what they're looking for, and are clinical in terms of not wasting their time," he says.

While security is often a big factor for the super rich, he says some of the wealthiest people are "super discreet" - "they can walk down the road and you wouldn't bat an eyelid".

"Some of the wealthiest people I've worked with and sold properties to are very unassuming. Literally you wouldn't know that they hadtwo pennies to rub together," Mr Tollit says.

The minimum wage is going up on 1 April - and on the face of it, for workers and their pockets, that can only be a good thing.

But analysts at Capital Economics have warned "a clear risk" is the rise keeps wage growth, and in turn inflation, high - and could "keep the Bank of England on alert" over the need to delay interest rate cuts.

How much is the minimum wage rising?

The national living wage (what the minimum wage is generally called) will rise from £10.42 to £11.44 per hour from next month - up 9.8%.

It's also being expanded to include 21 and 22 year olds.

The minimum wage rate is also going up for younger people. Those aged 18 to 20 will get at least £8.60 an hour from April - a bump of £1.11. For those 16 and 17, and apprentices, the minimum pay will be £6.40 - a rise of £1.12 on last year.

Potential consequences

Wage growth is one of the factors the Bank of England considers when deciding whether to cut interest rates - as rates can only fall when inflation is under control (high rates are used to lower inflation by squeezing the economy).

The Bank has predicted the minimum wage hike will add 0.3% to wage growth.

Analysts aren't yet convinced of the threat this poses to inflation but Capital Economics does warn...

"There is a clear risk that the rise in the minimum wage supports wage growth by a bit more than we expect and/or businesses pass on more of the resulting rise in their costs in their selling prices. This is unlikely to stop wage growth and the various measures of domestic inflation from falling further. But it may slow the pace of decline.

"Overall, the Bank of England has indicated that if wage growth and measures of domestic inflation were to ease in line with its forecast, it will be in a position to cut interest rates at some point this year.

"Our view remains that wage growth and domestic inflation will fall faster than the Bank is forecasting, which may prompt the Bank to cut rates in June. But a bigger upward influence from the rise in the minimum wage could be one reason why that first interest rate cut comes a bit later."

By Brad Young, Money team

Gold has been trading at record levels - so we've re-upped a post from January about whether it's a good investment for the average Briton.

First though, an explanation of why gold is up from Ricardo Evangelista, a senior analyst at ActivTrades.

He said: "Concerns surrounding global economic prospects, geopolitical tensions, and shifting expectations towards earlier interest rate cuts have fuelled increased demand for the precious metal, leading to its upward price trajectory."

So, should you be investing in gold?

Those considering gold should be less interested in this short-term figure, and more in treating gold "like a pension", Ross Norman, chief executive of Metals Daily, told the Money team.

And there are reasons - ranging from interest rates to coups - why some investors "wouldn't touch it with a long pole", according to Russ Mould, investment director at AJ Bell.

'Don't bother reading gold in the short term'

These two types of buyers tend to hold the metal for longer periods of time, making gold a "resilient" investment that usually rights itself in the long term, Mr Norman says.

But in the short-term, there are many influences on its value when compared with metals like copper, which are more clearly linked to supply and demand, he says.

Uncertainty caused by geopolitical events is likely to affect gold prices this year, with wars in Ukraine and Gaza and 76 elections taking place across the world prompting nervous investors to stock up on gold.

Cuts to interest rates in the US could drive up the metal's value, though this depends on when and how fast.

"Don't bother to try and read gold in the short term - it's unreadable," Mr Norman says.

He said if you want to make a fortune or lose one then "go to the casino, go and buy bitcoin, but I think you buy gold with a different motivation in mind... you want to secure what you've got".

Predicting gold prices over the long term is much simpler because the fundamental rules of supply and demand become much more relevant, said Mr Norma.

This includes mining (supply) and the size of middle-classes in various nations (demand).

Pros and cons

"UK investors typically have homes as their go-to store of value. It's a cultural thing, and yet gold has massively out-performed housing on almost every front," Mr Norman says.

For those who can afford a second home, he says, gold offers an alternative that doesn't incur the same taxes, stamp duty or agents' fees - and doesn't take months to sell.

Mr Mould, of investment platform AJ Bell, says gold is "seen as a haven" from central bank and government policy, but there are reasons some investors won't touch it.

Gold produces no yield or cashflow - you can't earn interest on the metal like money in a bank, he says.

Mining companies are also "volatile", often difficult to manage and don't always meet expectations. They are subject to taxes, geological problems, nationalisation and even coups, he explains.

The material is also primarily a hedge against things going wrong, and if economies are starting to get a handle on inflation - and cut rates at the right pace so as not to drive them up again - the incentive to buy gold drops.

But at the same time, lower interest rates mean your banked cash isn't working for you as hard, reducing the opportunity cost of buying gold, he says.

Two big financial moments will play out next week - we'll hear February's inflation data on Wednesday (it's expected to have fallen from January's 4%) and the Bank of England's latest interest decision on Thursday (they're likely to be held, again, at 5.25%).

One of the factors the Bank will consider is wage growth - and while workers are happy this is high, economist concern themselves with how this could impact inflation (we'll have more on this in one of our Weekend Money posts shortly).

This week we learned that British wages, excluding bonuses, grew by 6.1% in the three months to the end of January compared with the same period a year earlier.

The Office for National Statistics figures mean Britons are seeing wages climb at a higher rate than inflation.

If high wages persist, and contribute towards further inflation, it could lead to caution in cutting interest rates - as the whole point of high interest rates is to curb inflation by squeezing the economy.

Although if you've been following the Money blog this week, you'll have read the chairman of M&S saying the Bank of England's actions have been "totally ineffective".

Archie Norman said: "What we've proved in the last three years is that monetary policy is totally ineffective.

"Putting up interest rates didn't actually slow the economy very much."

The top businessman and former Tory MP explained that inflation was driven by "global macro prices" and it "had no bearing on the price of gas" and "had no real bearing on the price of food".

"We probably sometimes listen a bit too much to central bankers," Mr Norman added.

"The impact of higher interest rates hasn't really materialised."

While the Bank considers when to start cutting rates (markets are still expecting a cut to 5% in June or August), we continue to see a mixed picture on the mortgage market.

The week started with four major lenders raising rates - before Coventry became the first big name to respond to falling swap rates (these dictate how much it costs for lenders to lend) by announcing reductions.

We will have to see if others follow but for now here's the current average rates...

Also this week, we were told the UK could be emerging from recession - as GDP grew by 0.2% in January. We need two more months of growth for the recession to be declared over.

If you want to read more on this, this analysis of what's going on with the UK economy bydata and economics editor Ed Conwayis well worth five minutes of you weekend...

The Money blog is your place for consumer news, economic analysis and everything you need to know about the cost of living - bookmark news.sky.com/money.

It runs with live updates from Monday to Friday - while on Saturdays we scale back and offer you a selection of weekend reads.

Check them out this morning and we'll be back at the start of next week with rolling news and features.

The Money team is Emily Mee, Bhvishya Patel, Jess Sharp, Katie Williams, Brad Young and Ollie Cooper, with sub-editing by Isobel Souster. The blog is edited by Jimmy Rice.

Norfolk County Council has won a £384m payout from Apple after it claimed the company misled predictions about iPhone demand in China.

In 2018, Apple, its chief executive Tim Cook and its chief financial officer Luca Maestri were accused of misleading shareholders about iPhone demand in China.

Mr Cook had told investors that while Apple was seeing pressure in some emerging markets he did not believe demand would be down in China.

Yet two months later the company issued a profit warning blaming weak demand in China, something that caused an 8% drop in its share price.

Norfolk County Council claimed that Mr Cook must have known at the time that sales in China were starting to slow down.

The council claimed that this cost its pension fund almost $1m.

Now, after a five-year-lawsuit, Apple has agreed to pay shareholders the sum after settling with the council, The Telegraph reports.

The payout will be shared by investors who apply for damages and say they were affected by what they claim are misleading claims from Apple.

It is unclear how much the Norfolk pension fund itself will receive.

An average of 35,000 parking tickets are being issued by private companies to drivers every day - while the wait for new government legislation continues.

The RAC Foundation said many drivers could feel "badly let down" by the delay in ministers introducing a code of conduct aimed at eradicating some of the sector's worst practices - despite legislation being passed.

In all, 9.7 million tickets were issued to drivers by private parking companies across the UK between April and December last year - equivalent to nearly 35,300 every day.

Tickets can cost drivers up to £100 - with private parking businesses accused of using misleading and confusing signs, aggressive debt collection and unreasonable fees.

"We've not seen is the implementation of the protections MPs were queuing up to support when the Parking Act made its way onto the statute book all those years ago," Steve Gooding, director of the RAC Foundation, said.

"What's needed is a swift dose of hurry-up treatment in this election year if those voters are not to be left feeling badly let down."

A new energy tariff offered by EDF on Uswitch is offering rates 18% below the current price cap - and 6.5% cheaper than the new cap introduced in April.

The 12-month fixed deal is the cheapest Uswtich has offered since October 2021 - costing £1,581 for households with average consumption.

It is £109 under than the April price cap, and is the cheapest energy-only fixed deal available across England, Wales and Scotland.

"Customers have been under the cosh from sky-high prices for years, so it’s a big step to see tariffs priced lower than the upcoming cap, and the cheapest we’ve seen since late 2021," Will Owen,energy expert at Uswitch.com, said.

"At £1,581 for the average household, this should be worth considering for those wanting to take advantage of falling rates and lock in price certainty for 12 months."

The Scottish seaside town of North Berwick in East Lothian has been named the best place to live in an annual guide run by The Sunday Times.

It is the first Scottish winner of the guide - which has been running for 12 years.

The judges said they were impressed by its easy connections to Edinburgh and the way life revolves around the town's beaches.

There's a range of independent shops and a wealth of activities for any ages.

The newspaper also named 10 regional winners:

• East of England: Wivenhoe, Essex
• London: Clerkenwell
• Midlands: Stirchley, Birmingham
• North and North East: Leeds
• Northern Ireland: Portstewart, County Londonderry
• North West: Stockport, Greater Manchester
• Scotland: West End, Dundee
• South East: Folkestone, Kent
• South West: Sherborne, Dorset
• Wales: Abergavenny, Monmouthshire

A new regular savings account paying 6.75% for "loyal" customers has been launched by a building society.

The loyalty regular saver account can only be opened by savers who have been members of Coventry Building Society since the start of last year.

The rate lasts for 12 months, after which it drops to 3.1% - with savers able to deposit up to £250 per month for the first year.

While withdrawals are allowed, they are subject to a charge equal to 30 days' interest on the amount withdrawn.

If you don't qualify - the building society is offering a regular savings account at 5%.