Savills Portugal

We’ve said for some time that London’s most expensive property looks like good value, especially for international money given the currency play. Now, spurred on by post-election confidence, it seems buyers are ready to capitalise.

Prime central London prices are down by about a fifth since the 2014 peak but, while there have been significant savings on offer, political uncertainty led many to put their property aspirations on ice last year.

However, a feeling of greater stability in the form of a majority government has given buyers the confidence to press ahead. Far from a traditional winter lull, the £5 million-plus market has woken up – so much so that one of our Mayfair-based agents reports the busiest January he’s seen in 27 years in terms of enquiries and viewings from around the world.

In fact sentiment translated into action even more quickly than that. There were 310 sales worth £5 million or more in prime central London in 2019. Of those, 109 came in the final three months, 54 of them in December alone – the highest monthly total for five years.

Q4 2019 also set a record for sales worth £20 million or more, with 18 sales, up from just four in Q3 and the highest ever recorded in a single quarter. A total of 35 sales transacted at this level over the full year.

In terms of value, that’s £1.3 billion worth of homes in the closing three months of 2019, 133 per cent higher than the £557 million recorded in the third quarter, and up 11.3 per cent on the final quarter of 2018.

It’s important to put all these increases into context though. The total number of £5 million-plus sales last year was still down 6.9 per cent on 2018 and 8.8 per cent down on 2017. In many cases, what we were seeing was buyers finally signing on the dotted line to seal deals agreed over the preceding months.

The expectation that the coming budget will introduce an additional 3 per cent stamp duty surcharge for non-residents may bring forward buying decisions, but could restrain price growth thereafter.

More fundamentally, there are many unknowns facing the economy as the Brexit deal is negotiated this year, so we are not anticipating a significant bounce in values until that point.

Greater certainty may well deliver sales, but only if the price expectations of buyers and sellers match. This is a highly discretionary market and buyers still want to see value – even those convinced the market has bottomed out, as our indices suggest.