A long day’s journey into Knightsbridge | FT Alphaville

A long day’s journey into Knightsbridge

This should’ve been easy.

The idea was to make a price index for One Hyde Park, a Central London wealth camouflage device that also happens to be the world’s most expensive housing estate. Six years have passed since the 100 Knightsbridge complex opened to buyers, though time has made its owners no more relaxed about the public. Just to pause for a moment near the entrance — to take the photo on the right, for instance — will draw the immediate attention of black-suited goons. And it has been noted often that nearly all the flats are registered to companies, mostly domiciled in places where the state taxes are too low to fund a searchable database. Scrutiny, it seems, is one of the many things the owners hope to evade.

What changed was that over the past few months, property websites have pointed to an increasingly busy secondary market. Rightmove added two listings for OHP in the last week alone, in addition to seven already on the site. Others can be harvested from Google’s cache.

So. Asking prices might be compared against historical prices paid (which by law are made freely available on the UK Land Registry website). Changes can be mashed into a single time trend. The resulting metric might give a handy gauge of paranoia levels among the clandestine international vulgarati. It sounded simple enough. An hour’s work, tops.

Problem one: the data.

The Land Registry records only ten prices paid for OHP. All the other title deeds show “price not disclosed” — an exclusion the Registry’s FAQ explains can only be applied in circumstances mostly related to when deals fall outside market value. It’s not obvious why OHP’s purchasers are exempt. A random selection of title deeds (bought at £3 each with the author’s own cash) offer no clues, mostly showing ordinary-looking registrations to extremely wealthy individuals. With such a small data set, the chance of getting two prices on the same unit is close to nil.

No problem though. It’s a block of flats. All four OHP towers have been built on the same floor plan. Each offers the same facilities, the same space, the same lifeless beige decor and banal art chosen to put at ease anyone whose comfort zone is a Dubai airport hotel. That makes them fungible. A three bedroom can be a proxy for all equivalent three bedrooms. All that’s needed is a formula of equivalency, otherwise known as a floor plan.

Problem two: the data.

Westminster Council’s planning portal records 103 flat numbers for OHP, which is unhelpful for a building that has 80-something flats. Cross-referencing the Westminster data against title deeds helps knock out parking spaces, wine storage bunkers and the like, though complications remain. For example, three of the 83 flats with title deeds have no planning portal listing. For those that do have listings, permissions have been granted to knock through partition walls and subdivide penthouses. But it’s impossible to know whether those permissions have been acted upon.

Still, by comparing the two databases there’s enough to make a guess of OHP’s current build. Here it is in Lego.

(Each colour block is one self-contained unit; Lego choice does not represent unit size.)

Okay! The building schematic complete, it’s time to build our synthetic OHP.

Problem three: the data

All four towers have the same footprint, which makes each level look like the same slice of Millennium Falcon. Here’s a penthouse:

Individual units jigsaw into that floorplan, most commonly in a 3-2-1 formation.

… or so we assumed. On lower floors, however, the formula goes haywire.

Take, for example, unit C-01-8. None of the other towers has a Number 8, nor room on their plans for one to exist. And most inconveniently of all, C-01-8 is OHP’s only unit to have two publicly available prices: it sold for £7,700,000 on November 11, 2012, and again for £8,150,000 on May 8, 2014.

A grub around the architects’ plans suggests C-01-8 might be a ground-floor duplex tucked behind a branch of Abu Dhabi Islamic Bank. It shouldn’t be confused with C-08-1, a lateral five bedroom recently featured in the Daily Mail. (A handy way to tell them apart is that C-01-8 has title deeds but no planning permission listing, whereas C-08-1 has a planning permission listing but no title deeds.)

Anyway. Enough repetition shows through to make a formula:

The Land Registry and estate agent prices can be dropped into that formula. Which should be the easy bit. Right?

Problem four: the data

It’ll be quickest to put these in a list.

  • Asking prices are not selling prices. Hometrack’s September report for London has a 2 per cent gap between the two, narrowing from around 6 per cent in 2012, which complicates the figures quite a bit. But as these are not homes we’re talking about anyway, the author opts not to GAF.
  • Apartments are standardised only up to a point. Some have parking spaces and storage bunkers, some don’t. Some sellers pay the buyer’s stamp duty, some don’t. The only way to find out specifics would be to buy all title deeds for all 83 units, which ain’t happening, so we’ll treat extras as error margin.
  • Ditto square footage, which might’ve offered a much quicker and easier metric of value. Unfortunately, the measurements on estate agent listings are haphazard. And besides, we’re in far too deep for that kind of thinking.
  • Sales value differentials don’t factor ground rent and various service charges, which for a Big Spoon in 2013 totaled — get this! — £59,953.73. (For the same price, incidentally, one could book 218 nights at the Mandarin Oriental Hyde Park, whose many conveniences and facilities are comparable to OHP on account of being literally identical.)
  • Is it fair to consider a unit in Tower D (which is physically attached by glass walkways to the Mandarin Oriental and offers views over the Serpentine) as equivalent to a unit in Tower A (which is next to a rat run onto the A4 and offers views of the Paxton’s Head pub)? For our purposes, yes. Yes it is.

The results:

Or, normalised to 100 at the approximate date of first sales…

So what have we learned?

  • Full-floor units are the best store of wealth (based on the two data points available).
  • In 2013, a full floor cost twice as much as a half floor. Projections indicate that, by year end, a full floor will cost the same as five half floors.
  • The price of a generic Big Spoon is considerably more volatile than a Misshape — which is, by definition, a misshape.
  • The value of the Small Spoon one-bedroom flats will fall to zero by 2017.
  • Data journalism is hard.

Further reading:
An exclusive preview of One Hyde Park — FT.com slideshow (2010)
London penthouse sells for £140m (but doesn’t show up on the Land Registry database) — FT.com
Candy brothers settle over OHP breach-of-confidence allegation — FT.com
Lunch with the FT: Nick Candy — FT.com
A tale of two Londons — Vanity Fair