The £5 million-plus property market makes a steady start to 2023
2022 was a record year for residential sales above £5 million in London, with transactions exceeding 600 for the first time since Savills records began in 2006. As expected with current global economic headwinds, activity at this price point has been more subdued in the first quarter of 2023, with 106 sales taking place across the capital. While this is lower than the 139 recorded in the same timeframe in 2022, it is still above the 102 sales in Q1 2021 – a 4% increase.
The total value of £5 million+ property transacted at the beginning of this year was £1.13 billion: 16% lower than Q1 2022 but 3% higher than Q1 2021.
Traditional prime central London hotspots continue to dominate the sales market, with Kensington, Knightsbridge and Chelsea accounting for more than two thirds of second-hand sales. Yet typically lower value destinations in outer prime London, including Battersea and Richmond, accounted for a small proportion of sales. Here, we are seeing larger properties with gardens and good connectivity into central London attract buyers’ attention. It continues to be properties that are realistically priced that continue to sell well.
The total value of £5 million+ property transacted at the beginning of this year was £1.13 billion: 16% lower than Q1 2022 but 3% higher than Q1 2021
Frances McDonald, Director, Residential Research
Best-in-class, high-value properties remain sought after by both domestic and overseas buyers across prime central London more broadly, as well as new homes with standout amenities. This trend has continued across the board, as the availability of labour and cost of materials remains a challenge and buyers look for something of a turn-key specification.
International buyers, who hold their wealth in foreign currencies, are continuing to make a return to London’s most prestigious postcodes as they look to maximise the opportunity to purchase a property while prices remain good value in historical terms. Values across prime central London remain around 18% below their previous 2014 peak but once exchange rates are considered, those buying in US dollars, for example, will achieve a discount of more like 40%.
What’s next for luxury residential property in the capital?
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