Super prime property market in London seeing resilience in the face of Brexit
Buyers spent a total of £2.06 billion on super prime properties in London in the year to May 2019.
This was marginally higher than a figure of £2.05 billion in the previous 12 months, according to super prime sales market insight report for Winter 2019 from international real estate firm Knight Frank.
The market for properties worth £10 million plus is showing a resilience in terms of demand against an uncertain political backdrop, but overall transaction volumes fell 13% to 104 from 120.
‘Political uncertainty has affected sentiment over the last five years, however, this has intensified as the UK’s intended departure from the European Union continues to be discussed, combined with the impact of wider global economic tensions,’ said Tom Bill, head of London residential research.
‘However, higher value sales are increasing, as high net worth individuals target London and take advantage of the weak pound,’ he added.
The report also shows that 73% of super prime buyers were below 50 in the year to September 2019, which was up from less than half at the start of 2015.
Some 16 transactions above £30 million took place in the year to May 2019 compared to 11 over the previous 12 months.
Meanwhile, the ratio of new prospective buyers to new sales listings above £10 million climbed to 6.5 in the third quarter of 2019, the highest figure since the first quarter of 2014.
‘Beyond Brexit, there are global trade and geopolitical tensions that mean other super prime residential markets have slowed. While there are fewer discretionary buyers in London, well-priced and good quality stock is seeing strong interest and leaves me convinced that demand will accelerate once Brexit has been resolved,’ said Rory Penn, joint head of Knight Frank’s Private Office .
According to Victoria Garrett, head of residential, Asia-Pacific at Knight Frank, there is a strong appetite for the London market from buyers in Asia. ‘A combination of the currency discount, relative political stability and a world class education system means London is the logical choice for many buyers at the super prime level,’ she said.
‘When more clarity around Brexit emerges and there is more currency stability, much of the pent-up demand will be released,’ she added.