High-end buyers continue to flock to Prime London luxury homes

Super-top-end real estate transactions in the capital city increased by 30% last year, and this trend is anticipated to continue in 2023.

Discounts on luxury property

America is the largest source of multi-millionaires and billionaires, although there are also wealthy individuals from Europe, India, and the Middle East. The US Dollar's rise against the British Pound gives American buyers an effective 30% discount on their purchases in London, indicating that they are certainly investing.

The numbers speak for themselves

Over a two-year period, 92 luxury homes costing over ￡15 million have been sold, with 52 sales in 2022 as opposed to 40 in 2021, and 17 in 2020.

Prime Central London during 2022, American buyers made up half of the transactions for properties over ￡15 million, spending almost ￡620 million on luxurious real estate. Other significant buyers of luxury residences in London during the previous year were Swiss, French, Indian, and Middle Eastern buyers. For sales over ￡15 million, rising interest rates have increased cash purchases by more than 60%. In contrast to 2021 and 2020, when the majority of deals were financed by favourable "interest-only super-prime mortgages", this represents a substantial shift.

Buyers benefiting from a weak pound

Managing Director, Fokrul Islam went in-depth into how overseas investors can benefit from a weak pound and favourable currency rates. If you missed that video, you can click here to watch it.

London's billionaire deals market

Property sales between January 2021 and December 2022 totalled over ￡1.97 billion. In conclusion, that amounts to ￡553 million in 2020, ￡778 million in 2021, and ￡1.23 billion in 2022. Thus, the size of the London billionaire deals market has more than doubled in just three years.

The average price of a super-rich home in London over the past two years has been ￡3,259 per square foot, with Belgravia recording the highest price in 2022 at ￡10,000 per square foot.

Turn-key homes that are newly constructed or recently renovated and come with services like a concierge command a hefty price premium. That implies averaging values of ￡6,666 per square foot.

In Prime Central London, 36 mansions or townhouses selling for more than ￡15 million in 2022. As opposed to 11 in 2020.

What do billionaires look for?

A billionaire's home typically has seven bedrooms, a private theatre, a pool, and expansive gardens measuring over 9,000 square feet.

Buyers find both ultra-prime apartments and penthouses to be desirable, and sales in this market have increased. Over 6,000 square feet, four bedrooms, and a sizable balcony or private roof terrace are the selling factors in this situation.

London's top address for ultra-prime sales is still the SW1 postcode (Belgravia/Knightsbridge), with 17 deals, followed by the W1 postcode (Mayfair) (up from 11 in 2021)

It's all about the billions

Many multi-millionaires and billionaires have turned back to investing in London real estate as a tried-and-true safe haven and stable asset class as a result of the uncertain global economy and the underperformance of alternative investments.

London has defied the trend, despite the decline in billionaires' wealth. There are now 177 billionaires in the UK, an increase of six from 2021. Their combined wealth is ￡653 billion, and 120 of them own one or more houses in London.

The expectation is that, as a result of the global economic slowdown and rising interest rates, Prime Central London values will either remain unchanged or slightly increase by 1% or 2% in 2023. We anticipate that the growth in wealth in the USA, Europe, and the Middle East will cause a 30% increase in the volume of deals for properties over ￡15 million in 2023 compared to 2022.

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