London’s super prime property market shows signs of recovery – Show House

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There are signs that the super-prime (£10 million-plus) sales market in London is recovering after 12 months during which activity was curbed by the global pandemic, according to research by Knight Frank.

Transaction levels and spending are rising as the UK’s successful Covid-19 vaccination programme gathers pace and expectations grow that travel rules will be relaxed in coming months.

Key highlights:

  • In the six months to the end of April, £817.4million was spent on London super-prime property, 21% higher than the figure of £677.9 million recorded during the preceding six months;
  • There were a total of 45 super-prime deals in the six months to the end of April, compared to 43 transactions in the preceding six month period;
  • Despite international travel restrictions, demand has continued to build from around the world and far exceeds supply. The number of new prospective super-prime buyers was 150% higher in May 2021 than it was in January 2020. Meanwhile, over the same period, the number of new property listings in the price bracket fell by 25% as owners hesitated against the backdrop of the pandemic;
  • Based on the 12-month rolling average, in May 2021 there were 8.7 new buyers for every new super-prime property listed for sale. This was the highest figure in seven years;
  • Average super-prime prices increased 0.6% in the year to May, which was the first rise in more than three years.

Liam Bailey, Knight Frank’s global head of research said: “The London super-prime market is seeing a surge of interest. Purchasers with a combined budget of £36.8bn are actively searching for £10m+ properties right now, representing a rise of 54% compared to the five-year average. A combination of lockdown easing, a rapidly growing economy, sharply improved business sentiment, and a sense that city living is being reignited after a long close-down is helping to drive buyers.

“While the figure represents a growth in new demand from new UK and international buyers, there is also a growth in demand from existing luxury home owners looking to buy a new, bigger, better, super-prime home to improve and expand their London base, as a response to Covid’s impact on their lifestyle.”

Area focus:

  • The highest percentage of super-prime exchanges in the 12 months to April took place in Kensington (18.6%);
  • The joint top locations in the previous 12 months were Knightsbridge and Mayfair (17.4%). Notting Hill has also grown in popularity, recording 10.5% of all super-prime deals over the last year, up from 5.4% in the previous 12-month period.
  • Race for space: The percentage of super-prime sales that were houses was at its highest level in five years. Almost three-quarters of transactions were houses, compared to a split that was closer to 50/50 between apartments and houses in 2017

Rory Penn, Head of Knight Frank’s Private Office said: “The super-prime market has performed well in exceptional circumstances over the last 12 months, which highlights the resilience of London’s super-prime property market. I expect overseas demand to spring back quite quickly once travel restrictions are relaxed.”

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