London: It was the best year for sales of super-prime, or luxury properties above 10 million pounds ($12.6 million) in London since before 2016’s Brexit vote, which ushered in years of political uncertainty and sent the pound tumbling. This is according to a new report by real estate agency Knight Frank.
Between March 2022 and March 2023, 161 super-prime properties were sold, at a total of 3.1 billion pounds. The last time there were more sales was 2015-16, with 164 properties. The highest number of super-prime deals took place in the borough of Kensington with 26 properties sold, followed by 25 in Belgravia and 22 in Mayfair. The biggest month for deals was in December 2022, with 29 deals priced at 10 million pounds and over.
Recent sales include a penthouse in Knightsbridge overlooking Hyde Park with a large roof terrace and a guide price of 19.95 million pounds in March, and a house on Eaton Place in Belgravia at 17.5 million pounds in February.
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“After everything that has happened in recent years, London is still highly regarded by global buyers,” says Paddy Dring, global head of prime sales at Knight Frank. “However, I expect sales volumes will decline by at least 10 per cent over the next 12 months as political and economic uncertainty picks up.”
Dring tells Bloomberg that he expects just a 3 per cent decline in prime central London prices, less than in London as a whole.
“We don’t expect a dramatic decline,” he says. “There will always be a market for houses in areas like Mayfair and Belgravia, and we are still behind our five-year average on supply terms.” “Ultimately, property in London is seen as an effective long-term hedge against inflation,” says Dring.
The next issue moving onto the radar for buyers since the mini-budget chaos last September, and the bailout of Credit Suisse and the health of the banking sector, may be the coming general election in the UK, which is expected to take place in 2024.
The Conservative Party, currently led by Prime Minister Rishi Sunak, has been in control of Parliament since 2010. Last week, Sunak’s Conservatives lost hundreds of local council seats in a bruising election, a result that suggests the ruling party is in danger of losing power to the opposition Labour Party. Matters such as foreign investors owning homes and taxation could become hot-button issues during the election.
“Discussions around the general election have started to creep into conversations,” says Christian Lock-Necrews, head of the Knightsbridge office. But Dring says he anticipates a busy end to the spring, as well as a lively buying spree during the summer. “London still remains at the top of people’s list of global destinations,” he says.