Boutique Knightsbridge agents, Kaye & Carey celebrate their 15th anniversary, reflect on the past and look ahead to the future

When Adam Carey and I took that leap of faith to eschew a salary and embark on our own venture in 2003, everyone thought we were mad. The invasion of Iraq by US Military Forces on March 19 th supported by the British Army heralded the start of the Second Gulf War and fears over UK involvement plunged the property market into a state of paralysis.

When Adam Carey and I took that leap of faith to eschew a salary and embark on our own venture in 2003, everyone thought we were mad. The invasion of Iraq by US Military Forces on March 19 th supported by the British Army heralded the start of the Second Gulf War and fears over UK involvement plunged the property market into a state of paralysis. Our rather simplistic view was that it couldn’t get any worse so, in theory, things could only get better – and thankfully they did. Developers were desperate to shift stock so willing to give ‘the new team’ a chance and our fellow agents very happy to lend their support. By dint of necessity and sheer hard work, we managed to break even in our first year - much to the relief of our wives!

Like most agents in prime Central London, we have seen good and bad times in the last 15 years. A healthy economy with a growing services sector and City bonuses being paid in cash, saw average London property prices rise consistently year on year from 2003 (£203,000) to 2008 (£351,000) when that October we were suddenly hit by the biggest global Financial Crisis since the 1930’s. Looking back, we were extremely fortunate to be involved in our biggest transaction ever when a £30million deal was landed that Christmas.

Encouraged by a modest fall in prices, the following April saw a flood of Italians into London taking full advantage of both a tax amnesty from Silvio Berlusconi and a 20% discount on the Pound against the Euro. Britain was seen then as a safe haven for cash and other nations followed with money flowing in from Russia, China, Singapore, India and Australia.

Stamp Duty Land Tax on homes remained at a modest 4% on homes over £500,000 from March 2000 until it changed in 2010 to 4% from £500,000 up to £1million and 5% above £1million.

By 2010, the market had recovered and we saw prices move ahead again, reaching a London average of £492,000 by 2014 – October seen by most as the peak in the market. A further increase in 2012 took SDLT to 5% on homes between £1million to £2million and 7% over £2million.

Then, on 3 rd December 2014, the most damaging change came when George Osborne announced in his Autumn Statement that Stamp Duty Land Tax was to be reformed, replacing the old slab system below with a graduated structure adding sizeable increases to higher value homes.


RateCharge Band
0% Up to £125,000
1% Over £125,000 and under £250,000
3% Over £250,000 and under £500,000
4% Over £500,000 and under £1,000,000
5% Over £1,000,000 and under £2,000,000
7% Over £2,000,000


Under the new rules below, no tax is paid on the first £125,000 of a property, followed by 2% on the portion up to £250,000, 5% on the portion between £250,000 and £925,000, 10% on the next bit up to £1.5 million and 12% on everything over that.


RateCharge Band
0% Up to £125,000
2% Over £125,000 and under £250,000
5% Over £250,000 and under £925,000
10% Over £925,000 and under £1,500,000
12% Over £1,500,000


Taking a typical three bedroomed house in Chelsea valued at £3,500,000, this took the SDLT bill from £245,000 to a whopping £333,750 or 9% of the price.

A further, very significant change in April 2016 added an additional 3% of the entire purchase price if the property was a second home or investment, meaning SDLT on the above would rise to £438,750 (12.5%) for anyone fortunate enough to buy a second home worth £3,500,000, but that is not unusual. Unfortunately, this hike in costs applies to developers of one-off homes meaning many simply cannot see a return on their money in PCL and are focussing on outer London districts instead; the result being a lack of newly refurbished homes in the prime areas.

The 23rd June 2016 saw the UK vote on our continued membership of the European Union and, much to the surprise of many, 51.89% voted leave against 48.11% voting remain. No market likes uncertainty and, not helped by the recent increases in SDLT, turnover in the Prime Central London market has fallen by nearly 27% compared with 5 years ago (source: LonRes), with values falling back by an average of only 1.5% in 2017, although it is fair to say the most blue-chip homes, especially lateral apartments with good facilities, have fared better and held their value.

Although prices are holding up reasonably well, this still means most people who bought in mid-late 2014 will be extremely lucky to sell today without making a loss, a position untenable for the majority which also explains why so many properties have been withdrawn from sale. Some have been let, filling the increased demand from would-be buyers who have decided to ride out the next year or so and see which way the market moves.

The appetite for Buy to Let has lost steam as a result of policy changes that will mean 40,000 fewer investment property purchases in 2018 alone thus reducing supply of homes to rent.

The Letting market in 2017 proved resilient, with transactions up 7% year on year (source: LonRes) and it is easy to understand why a wealthy buyer, faced with a hefty stamp duty bill at a time when capital values could fall further, might prefer to rent until the picture becomes clearer. In a flat market, a prospective buyer loses nothing by renting and guards against a potential capital loss in the interim.

Those buyers upgrading today are generally more pragmatic, accepting say, an 8% reduction on a £1million sale is more palatable when that same discount can be negotiated off an ongoing purchase at £2million.

Correct pricing today is crucial, buyers are wary and negotiate that much harder to offset the high cost of SDLT and guard against any further fall in value.

The big mistake many sellers make is listening only to what they want to hear and often accept unrealistic advice from agents who should know better. Invariably, this adds months longer to the selling process and causes unnecessary stress - an unwelcome prospect for any committed seller keen to move on.

Our advice is to be sensible, take advice from several agents who know the patch and don’t be hoodwinked by the highest valuation - this tends to be in the agent’s best interest to win instructions, not the seller’s.

Unmodernised property remains attractive as buyers are not paying SDLT on the value of any improvements. We have recently sold a small, undeveloped cottage off Chelsea Green where the asking price was pitched at an enticing level and, much to the delight of our client, we obtained six offers all in excess of the asking price – a great result in any market. 

We have also sold this month a very special 2,000 sq ft flat on Pont Street SW1 which had fabulous proportions but had last been refurbished by Colefax & Fowler in 1985. Again, after discussing strategy with the owners, we achieved £100,000 over what was an attractive asking price of £4million.


As a result of the mortgage Market Review in 2014, mortgages are not easy to obtain and millennials in London still need large deposits to get on the property ladder. This explains why 35% of buyers today have assistance from the ‘Bank of Mum and Dad’ but better perhaps to pass money on now to benefit children or grandchildren than see it disappear later in Inheritance Tax!

So, what to expect of our next fifteen years?

No government can afford to see a wholesale collapse in prices and the spectre of negative equity raising its ugly head again, so the Bank of England must exercise caution and not raise interest rates by anything other than very modest increments.

High street agents face an increasing threat from on-line competitors with cheap fees and but we remain convinced there is nothing like dealing face to face with an agency like ours where all staff have at least 15 years’ experience in the prime central districts of Knightsbridge, South Kensington, Chelsea, Belgravia and Kensington.

The internet is both a help and a hindrance – a help because no matter what the size of the business is, the internet puts us all on a level playing field, a hindrance because it has lessened the value of all those years of experience – it’s easy to be an ‘expert’ now! However, information found on line can often be very misleading as it rarely tells the full story in terms of condition, aspect and lease length – important details which often only the agents have access to.

Good, personal service should be expected in any field but the value of an experienced professional cannot be under-estimated when something goes awry. We are passionate about our often-maligned industry and proud to have been recognised by ‘Prime Resi’, the journal of luxury property, as one of the top 25 boutique agents in London for the second year running.

Look at any graph of London houses prices and there are peaks and troughs but the trend is inexorably upwards. Prices seem to have stabilised and, albeit begrudgingly, SDLT is slowly being absorbed. Brexit negotiations are, for better or worse, well underway and we may well look back in a few years’ time and question what all the fuss was about – perhaps with a tinge of regret that we didn’t take advantage of a soft property market in 2018?

Matthew Kaye, ANAEA
Founding Director