London’s super-prime housing market is continuing to outperform despite the seasonal summer slowdown and wider political and economic uncertainty, according to buying agency Black Brick.
Its August market report points to rising transactions at the top of the market, continued interest from international wealth and evidence that significant price corrections are attracting buyers back to selected prime neighbourhoods.
LonRes data shows transactions above £5m are up 7.1% year on year and 11% ahead of the pre-pandemic average, while the number of properties under offer has increased by 11%.
Separate JLL research indicates that sales above £10m rose by 50% during the second quarter compared with the same period last year, reaching their highest quarterly level for three years. Savills reports an almost 40% increase in transactions between £15m and £20m.
GLOBAL WEALTH SUPPORTS DEMAND
Black Brick cautions that relatively few transactions take place at these price points, meaning a modest increase in sales can produce a large percentage change. Nevertheless, the direction of travel remains positive.
Camilla Dell (main picture), Managing Partner of Black Brick, says: “I think that one explanation here is that there has been so much global wealth generation in the past few years, particularly in America.
“As people get wealthy they invest in property. At first, they buy a bigger home but then they look at buying additional property assets around the world, and London is right up there on the list of places to buy.”
Research from developer London Square also finds strong international appetite for the capital among people living in New York, Singapore, Dubai, Hong Kong and Paris. Respondents associate London with career opportunities, stability, technology, diversity, education and culture.
STAMP DUTY CERTAINTY WELCOMED
Black Brick welcomes Prime Minister Andy Burnham’s confirmation that stamp duty reform will not form part of the forthcoming Budget, arguing that prolonged tax speculation can cause buyers to delay exchanging contracts.
Dell says: “Rumours like this are bad for property markets – as we saw last year when the wild conjecture about the imminent imposition of an extortionate Mansion Tax went on for months before the Budget.
“None of our clients wanted to exchange contracts. It’s therefore encouraging that the new Prime Minister has come out publicly and confirmed there will be no changes to Stamp Duty. It’s killed the uncertainty.”
