Light streams in through the bay window of Mike Nelson's home in London's Chelsea neighborhood as he pitches it like a polished salesman.
"It's a fantastic, six-bedroom house" says Nelson of his row home, which sits on a quiet street, lined with Japanese cherry trees in a section of town between Kensington Palace and the Thames. "It's got 3,100 square feet. It's over five stories and has a very nice, western-facing back garden and a roof terrace at the top."
There's even a gray, marble fireplace in the master bathroom, which served as a reception room in an earlier era.
Nelson is asking a little over $7 million dollars. That sounds like a lot, but it's actually a $700,000 markdown from the original price when the house was first listed in the spring. Nelson, a management consultant, said he was forced to trim expectations after the United Kingdom voted in June to leave the European Union.
"One has to be realistic about how the markets have changed," said Nelson, his tone turning sober. "Clearly it's given rise to a great deal of uncertainty and markets don't like uncertainty. They usually ask everyone to take a drop in value."
Knight Frank, the global realtor, said values for prime London properties are down nearly 2 percent in the first eight months of this year – the steepest decline since the global financial crisis nearly a decade ago. The largest annual decline is nearly 9 percent here in Chelsea.
A Soaring Market In Recent Years
This is a big change from just a few years ago when luxury property in Central London was booming. Simon Rose, a realtor with the firm Strutt & Parker, who is trying sell Nelson's house, says it would have been much easier back then.
"Decisions on houses such as the one that we're sitting in were made in minutes," explains Rose. "Probably you would make a bigger decision about your lunch than the property, because if you didn't make that decision, someone else would be coming in behind you and making an offer."
Rose says prices have jumped up to 10 times in value over the past two decades.
Many Londoners blame the run up on foreign buyers. In some instances, those buyers have been suspected of using London property to launder money or stash their wealth. Some in the real estate trade cite more basic economic principles.
"The demand for London property is high because it's an incredibly attractive global city in which to live, work, play and visit, so the pressure on space is great," says Yolande Barnes, head of global research for Savills, the real estate advisors. "Like many global cities, it has a limited amount of land."
The central London market began to turn several years ago because of sales tax hikes designed to bring luxury prices under control. Uncertainty following the vote to leave the EU has pushed values down even more.
A Buyer's Market
What's bad news for sellers like Mike Nelson, though, is good news for buyers, especially foreign ones who hold lots of U.S. dollars or euros.
James Boulton-Lea, who also works for Strutt & Parker, recalls a recent case of bargain hunters who were looking at property in the weeks before the Brexit vote.
"The profile of that buyer was an English family, based in the Cayman Islands, buying the property in dollars," says Boulton-Lea, "but for obvious reasons they wanted to sit tight and see what happened."
After the referendum, the value of the British pound plunged as economists had predicted. The buyers paid in dollars, earning at least a 12 percent currency discount — a savings of more than $1 million dollars off the asking price.
"There are various stories like that across the business," says Boulton-Lea.
This is the sort of buyer that Mike Nelson hopes scoops up his home in Chelsea. Nelson first spoke with NPR in early August. Today, his home is still listed at around $7 million. It has yet to sell.
ROBERT SIEGEL, HOST:
Central London is one of the world's most coveted and expensive real estate markets. But ever since the British voted to leave the European Union, there are bargains to be had - at least for people who hold their wealth in U.S. dollars. NPR's Frank Langfitt reports from London.
FRANK LANGFITT, BYLINE: I'm sitting in a living room of a house in the city's Chelsea neighborhood. Light streams in through the window as the owner, Mike Nelson, pitches me his home, which sits on a quiet street between Kensington Palace and the Thames.
MIKE NELSON: It's a fantastic six-bedroom house. It's got 3,100 square feet. And it's over five stories and has a very nice western-facing back garden and a roof terrace at the top. So literally until the evening, you get the sunshine.
LANGFITT: And, Mike, how much would you like for this property?
NELSON: We've got it on the market recently reduced, actually, recognizing the changes that have taken place with the European referendum. And so we brought it down to 5.495 million pounds.
LANGFITT: And what was it before?
NELSON: Six million.
LANGFITT: That's a huge reduction. So which - it would be close to what, 700,000 U.S. dollar drop?
LANGFITT: In U.S. terms, the price tag is still more than 7 million bucks. Simon Rose is a realtor with the firm Strutt and Parker. He's trying to sell Mike Nelson's house. Rose says not so long ago, this would've been easy.
SIMON ROSE: Decisions on houses such as the one that we're sitting in were made in minutes. Probably you would make a bigger decision about your lunch than you would property just because if you didn't make that decision, you knew that someone else would be coming in behind you and probably making an offer.
LANGFITT: That was during a period when housing prices in prime central London were skyrocketing. Rose says they've jumped nine to 10 times in value in the last couple of decades. Many Londoners blame the run-up on foreign buyers, some of who use property to launder money or stash their wealth. Some in the real estate trade cite more basic economic principles. Yolande Barnes heads global research at Savills, the real estate advisers.
YOLANDE BARNES: The demand for London property is high because it's an incredibly attractive global city in which to live, work, play and visit. So the pressure on space is great. And like many global cities, it has a limited amount of land.
LANGFITT: In the past several years, though, the market has turned. First because of tax hikes designed to bring luxury prices under control, and now because the vote to lead the European Union has created so much uncertainty. Knight Frank, the realtor, said values for prime London properties are down nearly 2 percent in the first eight months of the year. That's the steepest decline since the global financial crisis. It's bad news for sellers but good for buyers, especially those from overseas. Barnes says the plunge in the value of the British pound has made luxury homes even cheaper for those who hold dollars or euro.
BARNES: We have seen an influx of some overseas foreign currency investors who've just seen London become 10 percent cheaper than it was before.
LANGFITT: James Boulton-Lea also works for Strutt and Parker. He cited a recent case of bargain hunters in the weeks just before the June Brexit vote.
JAMES BOULTON-LEA: The profile of that buyer was an English family based in the Cayman Islands buying the property in dollars, but for obvious reasons wanted to sit tight, wait and see what happened.
LANGFITT: A few days after the referendum, they got a nice currency break on a home with a price tag of more than $11 million.
BOULTON-LEA: That discount for them at 12, 13 percent at that time would've have been a saving for - you know, in excess of 900,000 pounds. There are various stories like that across the business.
LANGFITT: This is the sort of buyer that Mike Nelson hopes scoops up his home in Chelsea. Mike and I first chatted about his house in early August. His home, still listed at $7 million, has yet to sell. Frank Langfitt, NPR News, London. Transcript provided by NPR, Copyright NPR.