London super-prime market had best start to the year since 2017
The release of pent-up demand following the general election boosted transaction volumes before the Covid-19 pandemic struck
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The number of super-prime (£10 million-plus) sales in London reached a three-year high in the first quarter of 2020, provisional data shows.
There were 28 exchanges above £10 million in Q1, which was the highest figure for the period since 2017. The tally, which will increase as more data comes in, is a further sign of how the London property market gained momentum in the three months between the general election and the government lockdown.
“Deal volumes picked up noticeably after the election with Brexit risk increasingly being priced out by buyers,” said Paddy Dring, global head of prime sales at Knight Frank. “More buyers were prepared to commit long-term to London with a number hedging their bets ahead of potential tax changes in last month’s Budget.”
An increase in the number of super-prime new-build schemes nearing completion has also boosted the numbers, said Paddy.
The number of super-prime sales had been on a downwards trajectory in recent years due to a succession of tax changes as well as Brexit-related political uncertainty.
There were a total of 96 sales recorded in London in 2019 compared to 112 in 2018 and 133 the year before.
“Super-prime buyers are still focussed on London,” said Rory Penn, head of Knight Frank’s Private Office. “Only part of the pre-election pent-up demand was released in Q1. The vast majority remain primed and ready to go once logistics allow.”
The relative weakness of the pound also helped drive demand, said Rory. The effective discount for super-prime London property, which combines currency and price movements, is between 30% and 40% for a range of overseas currencies compared to mid-2014.
Super-prime buyers have been more active than most in the market despite current lockdown restrictions, Knight Frank data shows.
The number of web views for UK properties priced at £10 million and above increased by 22% in the week ending 3 April (week 14) compared to the same period last year. It was the biggest increase in any price bracket for the second consecutive week, as the chart above shows. For the full story click here.
“The volatility of recent weeks has reminded many investors of the appeal of property as a greater proportion of their portfolio,” said Paddy. “The benefits of bricks and mortar as a long-term store of value have become self-evident.”