LUXURY HOMES SELLING WELL DESPITE CORONAVIRUS

LUXURY HOMES SELLING WELL DESPITE CORONAVIRUS

These are interesting and disturbing times, but the one thing you can rely on is the performance of the luxury London property market.

You only need to look at demand for top-end properties in popular districts such as Mayfair, Knightsbridge and Belgravia — sales and asking prices both hit record highs recently. In fact, many predict that we are experiencing a boom in the housing market, despite the economic effects of Covid19.

Ironically, sales of houses priced under £1 million dropped 36 per cent and completions of home valued between £2 and £3 million were down 24 per cent. And yet at mid-year, London’s luxury homes (£5 million-plus) were actually up 31 per cent from the previous year.

Property Services in London say that sales were up 70 per cent in September from the previous year, this marked the highest annual price growth in four years with average asking prices up 5.5 per cent or almost £17,000 year-on-year in October.

Naturally, Covid-19 is a key factor in all statistics at the moment, and the lifting of international travel restrictions imposed during lockdown is still a worry for international investors. So too is Brexit.

However, Tom Bill, head of UK residential research at Knight Frank says: “Despite the background noise of Brexit, there is smart money in Europe targeting London, the combination of a weak pound, a looming stamp duty hike and less competition from buyers who need to catch a long-haul flight has created a buying opportunity.”

This ties in with the news that China is no longer top of international property buyers in the purchasing of prime central London property.

It appears that in much of 2020, France was the country holding the largest share responsible for 11 per cent of all transactions from foreign buyers.

This is an upward shift from China’s 8.3 per cent according to data from estate agency Knight Frank and a decrease from their 15 per cent share over the same period in 2019.

UK buyers in the central London market were up to 59 per cent compared with 47 per cent of deals in the previous year.

So, what is happening? There is some evidence that Central London is losing its lustre during the lockdown, as wealthy owners are trading luxury flats (some have fallen 10 per cent) for large houses in the leafy suburbs – such as Hampstead and Richmond.

This makes sense as people stuck at home are seeking properties with outside space, access to parks and home office space with good broadband. As always, close proximity to good schools is a key factor.

Two inevitabilities will slow the market – the end of furlough and the return of stamp duty – but despite this, those who keep a brave head will still see that the luxury London property market has a bright future.

© 2020, Top Household Management Ltd

These are interesting and disturbing times, but the one thing you can rely on is the performance of the luxury London property market.

You only need to look at demand for top-end properties in popular districts such as Mayfair, Knightsbridge and Belgravia — sales and asking prices both hit record highs recently. In fact, many predict that we are experiencing a boom in the housing market, despite the economic effects of Covid19.

Ironically, sales of houses priced under £1 million dropped 36 per cent and completions of home valued between £2 and £3 million were down 24 per cent. And yet at mid-year, London’s luxury homes (£5 million-plus) were actually up 31 per cent from the previous year.

Property Services in London say that sales were up 70 per cent in September from the previous year, this marked the highest annual price growth in four years with average asking prices up 5.5 per cent or almost £17,000 year-on-year in October.

Naturally, Covid-19 is a key factor in all statistics at the moment, and the lifting of international travel restrictions imposed during lockdown is still a worry for international investors. So too is Brexit.

However, Tom Bill, head of UK residential research at Knight Frank says: “Despite the background noise of Brexit, there is smart money in Europe targeting London, the combination of a weak pound, a looming stamp duty hike and less competition from buyers who need to catch a long-haul flight has created a buying opportunity.”

This ties in with the news that China is no longer top of international property buyers in the purchasing of prime central London property.

It appears that in much of 2020, France was the country holding the largest share responsible for 11 per cent of all transactions from foreign buyers.

This is an upward shift from China’s 8.3 per cent according to data from estate agency Knight Frank and a decrease from their 15 per cent share over the same period in 2019.

UK buyers in the central London market were up to 59 per cent compared with 47 per cent of deals in the previous year.

So, what is happening? There is some evidence that Central London is losing its lustre during the lockdown, as wealthy owners are trading luxury flats (some have fallen 10 per cent) for large houses in the leafy suburbs – such as Hampstead and Richmond.

This makes sense as people stuck at home are seeking properties with outside space, access to parks and home office space with good broadband. As always, close proximity to good schools is a key factor.

Two inevitabilities will slow the market – the end of furlough and the return of stamp duty – but despite this, those who keep a brave head will still see that the luxury London property market has a bright future.

© 2020, Top Household Management Ltd