And with a number of high-profile schemes reaching completion, new build properties have been taking a larger share of this particular market. A record 21% of all £5 million+ sales in 2022 were new build, with this trend continuing in Q1 2023 as one in five £5 million+ property sales sold as new.

Schemes such as The OWO, Chelsea Barracks and The Whiteley have met an increasing requirement for turnkey properties from a discerning group of ultra-high-net-worth individuals who are drawn to properties that are demonstrably best in class.

These buyers are also increasingly aware that with a diminishing pipeline of new schemes that meet their requirements for space, convenience and luxury amenities, the opportunity to secure such properties in the future may be limited.

Our analysis of the pipeline for homes above £5 million identifies that there are now just 15 schemes currently under construction. And consents for such schemes are limited – only a further four schemes have planning but are yet to start on site.

In the future, the delivery of new homes targeted at this part of the market will be subject to increasingly strict planning policy. Already Westminster City Council’s Local Plan, which was adopted in April 2021, prevents consent being granted for new homes that are in excess of 200 sqm. And it appears the Royal Borough of Kensington and Chelsea is set to follow suit in resisting what have been dubbed ‘over-sized units’ (albeit it has been less prescriptive on precisely what this means).

To date, these restrictions have been stringently implemented. With just 35% of £5 million+ new build sales since 2021 coming in below this size threshold, this could severely curtail future supply.

That means at the end of March there were an estimated 450 £5 million+ homes in the new build pipeline which offer accommodation in excess of 200 sq m. And based on current sales rates, in five years these schemes will be sold out.

Other policy changes are likely to mean opportunities for redevelopment will also be harder to come by. For example, a retrofit first policy in Westminster requires developers to extensively prove that it is not feasible to retrofit a building rather than demolish and rebuild it. And, furthermore, while permitted development rights technically allow developers to convert offices to residential use without going through the planning system, both Westminster and Kensington and Chelsea have applied for exemptions to this.

So there is a sense that substantially fewer new “super prime units” will hit the market in the future, meaning the most desirable homes in central London which have been developed over the past 20 years will continue to carry a substantial price premium.

Interested to know how the market is performing for second-hand homes above £5 million? Click here to read our latest update

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