The Scarcity Premium Is Not a Market Cycle
Grandfathered moorings, expired consents, protected sightlines. A growing share of prime value now sits in permissions that current regulation would refuse to grant.
Anneke de Vries
Partner & Senior Market Advisory
Photography: Private shoreline beneath a cliffside property
There is a category of value in prime property that does not appear in any comparable analysis, does not respond to interest rates, and cannot be created by capital. It is the value of a permission that would not be issued today.
We have been tracking it deliberately since 2019, and across our own book it now accounts for a materially larger share of price than it did a decade ago.
“Permits and non-replicable physical rights do not respond to credit cycles. Their supply curve is fixed or declining.”
— Private Underwriting Thesis
What the category contains
A deep-water mooring on a coastline that has since been designated. A ninety-metre private beach in a jurisdiction that now mandates public access above the high-water line. A rental licence in the Balearics, where new tourist permits have been effectively frozen since 2022. A jetty on Lake Geneva built in 1948 under zoning that was rewritten in 1974.
None of these can be replicated at any price. A buyer with unlimited capital cannot acquire the right to build them, because the right no longer exists to be sold.
Why it behaves differently
Ordinary prime property is cyclical. It responds to credit conditions, currency movement, and the general appetite for risk assets, and it draws down accordingly. What we might call permission-backed value does not behave this way, because its supply curve is not merely inelastic — it is fixed and, in most jurisdictions, declining.
Across the eleven transactions on our book carrying a non-replicable permission between 2019 and 2025, the average drawdown during the 2022–23 correction was 4.1 per cent. The comparable figure for our wider prime residential book was 11.8 per cent.
The diligence implication
This changes what diligence has to look for. A structural survey and a title search will confirm that a mooring exists and that it is owned. Neither will tell you whether it could be rebuilt if a storm removed it, and that is frequently the more consequential question.
We now instruct a planning opinion on any property where a material part of the value sits in a physical asset outside the building envelope. In roughly one case in five, the opinion returns something the seller did not know — occasionally in the buyer's favour.
What we tell clients
Where a property carries a permission that could not be reissued, we say so explicitly in the underwriting model and we assign it a value. Where a property's permissions are ordinary and replicable, we say that too. The distinction is not a marketing device; it is the single most reliable predictor of downside behaviour we have found.
Need tailored underwriting advice?
Speak directly with our market intelligence desk regarding private acquisition diligence.
