Sales of £5mn-plus London properties hit report stage


Sales of London’s priciest properties hit their highest ever stage within the first half of this 12 months as rich consumers sought sanctuary from financial turmoil and uneven fairness markets by investing in bricks and mortar.

There have been 294 gross sales of properties value £5mn or extra within the six months to the tip of June, representing a complete spend of virtually £3bn, in line with property agent Savills. The report outlay included 89 properties that bought for £10mn or extra with the majority of the funding coming from home consumers, it added.

Sales within the first half have nearly matched the 308 £5mn-plus offers struck in the entire of 2019 — the final interval to be unaffected by the pandemic, stated Savills.

The rush to purchase high-end properties contrasts with indicators of a cool-down within the wider market, with a rising variety of analysts predicting that home gross sales will gradual as rates of interest rise and the UK faces the prospect of a recession.

Buyers within the mass market are battling each increased mortgage prices and the squeeze on financial savings attributable to inflation and the rising price of dwelling.

But folks with £5mn to spend are prone to be much less encumbered, in line with Frances McDonald, a analysis analyst at Savills.

“This end of the market is less reliant on borrowing, reducing its exposure to further interest rate rises, and less likely to be impacted by the increased cost of living,” she stated.

Half of all this 12 months’s gross sales have been recorded in a handful of rich neighbourhoods: Chelsea, Belgravia, Kensington, St John’s Wood, Mayfair and Knightsbridge.

The spate of exercise on the prime finish of the market has partly been prompted by sellers’ rising willingness to barter on value, pushed by worry {that a} darkening financial outlook might set off value falls later within the 12 months, stated Stuart Bailey, head of prime gross sales in London for property company Knight Frank.

Buyers, in the meantime, are turning to property within the hope it should show a safer funding than equities or bonds, stated Bailey.

“People tend to believe the London property market isn’t going to crash overnight; it’s not crypto. And with inflationary pressures, having cash in the bank isn’t sensible either,” he stated.

But common costs on the prime of the market are nonetheless a way beneath their peak. Having recovered rapidly from a crash in 2008 — with buyers from world wide parking money in London property — costs of high-priced properties within the capital have since fallen.

With the market hit by tax will increase and political uncertainty over the previous six years, consumers at the moment are paying on common 14 per cent lower than they have been in 2016 for “prime” London properties, in line with Knight Frank.

High demand may push costs up for high-quality properties, however there was little signal it was doing so but and expectations have been tempered by the gloomy financial outlook, stated Bailey.

Overseas consumers, who may profit from the weak spot of the pound, are comparatively skinny on the bottom. International arrival figures from Heathrow airport present that the variety of abroad guests to the UK stays greater than 20 per cent beneath pre-pandemic ranges.

The circulate of arrivals from Asia — usually a extremely lively group on the prime finish of the London housing market — is down 60 per cent, in line with Heathrow knowledge.