There’s a lot of flapping and clucking in the UK ‘luxury apartment’ market as the chickens come home to roost

My Week

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The Independent Online

In London and other parts of Britain where demand for property is soaring, have you ever wondered how it is that no sooner has a pub, service station or office hung up the “closed” sign, and the builders moved in, than another notice goes up announcing “85 per cent sold”?

The answer very often is that the flats – sorry, “luxury apartments” (there being no such thing as mere flats these days) – are sold “off plan” to overseas investors. The agents have hotfooted it to Hong Kong, Shanghai or Mumbai and got them to part with an awful lot of cash. Sight unseen, just like that. 

It’s remarkable. In my experience, living in south-west London, it happens every time. Perhaps this is the Asian way – that they buy property in a cavalier fashion, quite unlike folk in this country who want to pay several visits and get the tape measure out before agreeing. Or, more likely, they are treating the apartment as simply another form of investment, the same as buying shares. 

Certainly, they have propped up the current property boom. But now I hear of a strange noise engulfing the market. It’s of a lot of clucking and flapping, as in chickens coming home to roost. 

Because I was told this week by an industry insider that “85 per cent sold” really means “£2,000 deposits paid on  85 per cent”. And because they face an economic slowdown at home, Chinese investors in particular are saying: “Keep the £2,000 – and if you don’t like it come after us in the Chinese courts.”

They are defaulting, in other words, with no consequences. And the result is that some developers are left holding a huge supply of apartments that few onshore buyers can afford. Prepare, said my nark, for 50 per cent-plus price drops. 

We went on to speculate just what the further consequences might be. Apart from a crash, he predicted that people who were taken in by the “85 per cent sold” boasts might seek compensation. They had been led to believe 85 per cent were sold, and that wasn’t the case. Stand by for possible legal actions against developers and their agents. 

It is, we agreed, fraudulent misrepresentation to claim that a property is sold with no certainty the transaction will be completed. Receiving a deposit is not the same as completion. 

Anyone who has been induced into paying a sky-high price for an apartment in the belief that the bulk of the other units in the block have been sold and demand is huge – when they have not been sold at all – could, we believe, have good grounds to sue.  

Why upside down is the right way up 

On Thursday, I was chatting with Charlie Dunstone, co-founder and billionaire chairman of Carphone Warehouse. 

Charlie, who looks impossibly youthful at 51 – so much so that it’s difficult to think of him as “Sir Charles” – talked about how he had learnt the ropes of management as he went along. He started the business in 1989 with £6,000 of savings and the belief that mobile phones, then in their infancy, would take off. 

What he had come to realise as the retailer grew and grew was that all that mattered was the front line, the shops. He would not let anyone refer to head office as the “head office”. Instead, it was the “support centre”. 

Middle management he came to regard as “oxygen drainers”, depriving the sales force of the means to sell. He saw the organisation as an inverted pyramid, with the salesmen at the top and managers at the bottom. 

Interestingly, much of what he was saying can be found, suitably dressed up as textbook-speak, on expensive MBA courses. Charlie Dunstone, though, is entirely self-taught and reached the same conclusions on his own. 

Full steam ahead for teaching tech 

Good news at last for the computer gaming entrepreneur Ian Livingstone and, hopefully, for our schoolchildren. 

Mr Livingstone, co-founder of Games Workshop and a video technology pioneer (the Tomb Raider series is just one of the best-sellers he produced) called to say he had finally got the go-ahead to open two new free schools and realise his vision of putting computing at the forefront of teaching. 

The Livingstone Academies in Tower Hamlets, east London, and Bournemouth will provide more than 3,000 children with classes rooted in STEAM – science, technology, engineering, arts and maths. They will draw on Mr Livingstone’s experience to instil creative thinking and enterprise in their pupils, who will take part in Dragons’ Den style competitions and form their own mock start-up companies. 

Mr Livingstone has long been an ambassador for digital – when he was Business Secretary, Vince Cable made him creative industries champion– and the cause of bringing our children up to speed so that Britain can compete globally. 

In 2010, he was invited by the Government to review digital skills in England and concluded that poor-quality IT in schools was an obstacle to economic growth. The study was influential in leading to an overhaul of IT teaching and the introduction of a new computer science curriculum.

Now he has got another opportunity to put his views into practice. He said: “The arts and sciences should no longer be a question of either/or – and to further this, I’m delighted to be opening two free schools to embed digital creativity in future generations of our society. It is the combination of computer programming skills and creativity by which today’s world-changing companies are built.”

He also laid down the gauntlet to other tech industry chiefs – who bemoan the absence of digital knowledge among our school leavers and graduates – to do the same. “I encourage other digital entrepreneurs to seize the opportunity offered by the free schools programme in helping to give children an authentic education for the jobs and opportunities of the digital world.” 

I recall sitting with Mr Livingstone at the annual UK gathering of Founders Forum, the network of digital entrepreneurs, held at The Grove hotel and spa in Hertfordshire. Known as “The Davos of Tech”, the super-cool two-day event is a showcase of tech talent and success.