London’s super prime residential market has recorded its strongest half year in volume and value terms since the rush to beat the introduction of the new stamp duty rates seven years ago, according to Savills.
In total, 237 £5m-plus transactions were recorded in the first six months of 2021, 59 per cent above the first half of 2020, when the UK first went into lockdown. It is also 61 per cent higher than the same period in 2019, when much more normal market conditions prevailed.
The total value of these transactions was £2.28 billion, 41 per cent higher than the first half of 2020 and 43 per cent higher than 2019.
Domestic buyers and international buyers already resident in London drove the market, many looking for larger homes and gardens after the experience of lockdown.
The agency says activity was particularly focused in the £5m to £10m range, which recorded 179 transactions.
Despite being more heavily reliant on international buyers historically, transactions in the £10m-plus bracket were on a par with the first half of 2019, with 58 sales compared to 57. In the first six months of 2020 there were just 45.
The total value was also higher, at £1.08 billion in H1 2021, compared to £0.99 billion in H1 2019 and £0.93 billion in H1 2020.
“The absence of overseas buyers has held back the recovery of parts of the prime London market, most notably the highest value central postcodes, where prices remain around 20 per cent below peak” says Frances Clacy, Savills residential research analyst.
“London-based buyers clearly called the bottom of the market late last year and have been able to enjoy transacting with relatively low levels of competition.
“Houses have remained the top performers as buyers look to upsize but the flat market continues to lag behind because of international travel restrictions. However, pent up demand from those who have been unable to travel suggests that there is likely to be a rebalancing in demand once international buyers are able to visit the capital again.
“We expect this window of opportunity to close quickly as travel corridors reopen.”
Central London boroughs continued to account for the vast majority of £5m-plus sales.
Chelsea and Kensington took the highest share, 14 and 13 per cent of deals respectively, but leafy outer London suburbs, such as and Putney and Wimbledon, continue to increase their share of this super prime market, with 11 per cent of the sales in the period.
Indeed, the demand for country house style living in London led to annual price growth of 9.0 and 8.2 per cent for homes with six or more bedrooms across west and southwest London, respectively, making this the only segment of the London market to match the prime country market for price growth.