Normally, when a celebrity moves into your neighbourhood the price of property will rise as more people take an interest. Many homeowners have taken advantage of the “celebrity premium” but unfortunately it can sometimes have a detrimental impact. Have you noticed, when a celebrity has a wild reputation but no criminal convictions they tend to have an air of “unpredictability” which can attract some investors to the neighbourhood. However, once they have any criminal convictions and they return from jail they can have a detrimental impact upon the value of neighbouring property.
Celebrities gone wrong
Convicted sex offender Rolf Harris was recently released from prison after serving almost 3 years of a five year nine-month sentence passed down in 2014. While he is said to be in the process of appealing against his convictions his return to a private estate near Maidenhead, Berks, has sent ripples through the neighbourhood.
A £2.75 million property which boasts five bedrooms has just been listed for sale on the same private estate as Rolf Harris’s home. This is now the fourth home to be put up for sale since his release from prison with concerns that more will follow. The problem is that the more properties listed on the estate the greater the likelihood of potential buyers negotiating lower prices. We know why families are looking to move, we know the current market environment and these two factors are obviously detrimental to the value of properties in the area.
Over the years there have been many celebrities returning from jail sentences who have seen their neighbourhoods turn against them and properties put up for sale. Historically properties in the area would have “benefited” from the connection with local celebrities but this can very quickly turn on its head. The so-called “celebrity premium” can very quickly become a “celebrity discount” with a fall in the value of property overnight and a probable lack of interest.
It will be interesting to see whether any of the four properties on the Rolf Harris estate are sold at anywhere near their asking price and who actually buys them. Even though there is significant space between properties on the estate there are communal areas when neighbours may bump into each other.
High-end property in the UK
Whether or not there is a celebrity connection it would appear that demand for high-end property in the UK has weakened somewhat in the aftermath of Brexit. Whether or not Brexit will have a negative long-term impact on UK economy is debatable but in these times of uncertainty investors appear to be holding back. This can sometimes prompt a vicious circle where potential sellers are forced to reduce their price as buyers gain the upper hand.
We have seen this with celebrity properties in the US, despite the fact the US real estate market has been fairly buoyant, with some homeowners forced to knock tens of millions of pounds off their asking price. Yet on the flipside of the coin we see international superstar Beyonce acquiring an $88 million home with her partner Jay Z with a $52 million mortgage! What more can you say about that?