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COVID-19 and lockdowns actually lifted the UK real estate market, as investors jumped in to make full use of government incentives. But all of that seems to have bypassed luxury home prices. Image Credit: Agency

Dubai: In extreme stress situations, the luxury end a city’s property market is more resilient – right? That’s the conventional wisdom… but London has just gone and contradicted it.

The uber-premium addresses in London recorded value declines of 10 per cent and much more over the last 12 months, according to the consultancy Astons.

For instance, the W1J postcode in Mayfair and St. James’s has been the “worst hit” with sold prices falling by 40 per cent as a result of the pandemic. In value terms, a sold home would have seen its value drop from 4.9 million pounds to 2.9 million pounds.

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Shock and awe

Kensington’s W8 postcode saw seen the second-largest decline of 18 per cent, and the SW1X (by 17 per cent), W1S (15 per cent) and SW1W (11 per cent) postcodes also seeing rapid declines.

"This decline has been due to a number of factors - while nice, the stamp duty holiday saving hasn’t boosted buyer demand amongst high-end homebuyers to the same extent as it has in the regular market," said Arthur Sarkisian, Managing Director of Astons. "Restrictions on travel have also prevented foreign investment to a certain extent, while those looking to buy for themselves have continued to opt for more peripheral locations such as Hampstead."

And all this despite overall property market in London actually gaining 3 per cent in value during the pandemic months, as buyers sought to make use of multiple government incentives that the government brought on for them.

Thus, you can see the SW1Y postcode averaging a sold price shoot up 54 per cent during the pandemic, with Chelsea’s SW3 and SW10 postcodes also enjoying an uplift of 23 per cent and 12 per cent. respectively.