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Buyers in search of London’s rarest trophy homes are providing a striking counterpoint to the mood music of Brexit.
In 2018 there was a surge in the number of sales worth more than £15 million – up 43 per cent on 2017. And boosted by this activity at the very top end of the market, overall sales of prime London homes worth more than £5 million totalled nearly £4 billion, up 10 per cent on the previous year. Clearly demand in central London has very different drivers from the capital’s broader, more domestic prime markets.
The sums buyers are prepared to pay for the city’s finest addresses – both heritage and new – underline their ultimate and enduring appeal. The last few weeks of 2018 saw some very big ticket deals – not a flood of activity, granted, rather canny international interest taking advantage of what were perceived as great opportunities.
Our researchers have looked at the numbers – prime central London values are now down 19.4 per cent from their peak in June 2014 (see table below) and, even accounting for the increase in stamp duty which triggered the falls in the first place, this signals significant savings. Historically, that’s a cue for overseas buyers to come knocking. Add the depreciation of sterling to the mix and London looks even more appealing.
We have seen a renewed appetite from US dollar buyers, primarily those with a real need for accommodation in London, and it’s not hard to see why. Back in the summer of 2014 a £5 million home would have cost more than $9 million, including stamp duty. At the end of 2018, the price tag was just over $5.8 million. Even for a sterling buyer there’s now a saving of some £800,000 to be had.
History tells us that when London bounces it can take us by surprise. We don’t expect that until Brexit is behind us, but assuming a deal is struck with the EU, we do expect to look back and reflect that early 2019 was pretty close to the bottom of the market.
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