The allure of London’s high-end property continues to grow in 2024, with a rise in the purchase of properties valued at over £10 million. This year has seen an impressive 9.1% increase in sales of these luxurious homes, according to a recent report from Coutts. Despite a general 3.9% dip in Prime London property prices during the first quarter, savvy buyers are capitalising on these more attractive rates.
The Appeal of Prime Central London
Jamie Hope, Managing Director at Maskells, highlighted a 45% increase in offers compared to last year, signaling a strong buyer commitment to high-value properties. “When buyers see value, they are absolutely committing… and when there is competition, buyers are very much prepared to compete and pay strong prices to secure the best properties,” Hope explains.
Global Buyers Drive Demand
Nicholas Vaughan, a Partner at Withers, observes a significant influx of international buyers, especially from the US and China, drawn by the weakened pound and the relative affordability of London compared to other global prime markets. These factors, combined with a softening in seller pricing due to election year dynamics and increased loan servicing costs, are catalysing transactions, even for the most opulent properties that had languished on the market for years.
A Distinct Market for Ultra-Expensive Homes
While overall sales for homes above £1 million declined by 7% year-over-year, the market for properties over £10 million tells a different story. Katherine O’Shea, Director at Coutts Real Estate Investment, notes a 9.1% increase in sales volumes for these prime properties. Many of these buyers, often international, view London real estate as a ‘safe haven’ for their wealth, benefitting from currency fluctuations and a significant drop in prices since their peak in 2014. “Dollar buyers in certain parts of the capital are managing to secure a 47% discount on 2014 prices,” O’Shea points out.
What Do Wealthy Buyers Want?
The demand for trophy heritage homes in prestigious London postcodes remains high among high-net-worth (HNW) and ultra-high-net-worth (UHNW) buyers. Islay Robinson, Group CEO at Enness Global, indicates a growing interest in newer developments that offer more real estate square footage for the money. This shift has sparked interest in previously overlooked areas like Bayswater, adjacent to the fashionable Notting Hill.
Outer Prime Markets and Current Trends
Strong demand persists in some outer prime London markets, with Islington notably surpassing previous price peaks. The recent Netflix TV series Buying London has also played a role in showcasing a broader array of available properties, attracting a new international audience.
Buyers are currently favoring turnkey properties over those needing refurbishment, given the rising costs and uncertain timelines for renovations. “We have sold every single turnkey property on our books, often for record prices and with competing offers,” says Hope.
The recent Leasehold and Freehold Reform Act 2024 introduces complexities, particularly concerning the enfranchisement and lease extension legislation. Potential buyers are advised to seek specialised legal and valuation advice before purchasing properties with short leases.
Robinson stresses the importance of being well-prepared when entering the Prime London market. Choosing the right agent and broker to navigate the complex mortgage landscape is crucial for a smooth transaction. O’Shea recommends working with a buying agent to devise a strategic approach to negotiation, emphasising that property sales are often more emotional than typical business transactions.