LONDON PROPERTY MARKET CONTINUES TO BOUNCE BACK

Chapter 01
MOVING ON UP

Property worth £1 million or more in London continues to make a comeback as the world adjusts to life alongside the coronavirus pandemic – with house prices up and discounts down.

Prices have risen particularly well in areas outside central London, such as Richmond, Wandsworth and Islington, as we see a ‘race for space’ brought on by the pandemic.

This has created an opportunity for those looking to buy centrally as some areas are currently pretty cheap compared to historic levels. Prices in Knightsbridge & Belgravia, for example, are 17 per cent below their peak in 2014.

That may not last though, with many UK property agents predicting significant growth in central London’s luxury housing market this year.

Peter Flavel, CEO, Coutts, says, “The market for properties worth £1 million or more in London is well and truly on the rebound, having been in the doldrums over recent years. Prices are up, with new records set in some areas, and the amount buyers are getting off the asking price is dropping.

“Kensington, Notting Hill and Holland Park have been the most active in the over £10m price bracket, while King's Cross and Islington have seen rises of 12 per cent over the last 12 months.”

He adds, “The pandemic has forced many to rethink what they want. Clients are looking for more space, a bigger garden, and a home office. To get all that, many have been forced to move out a little further, and the resulting demand in those areas has caused prices to shoot up.”

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CHAPTER 02
SUPER PRIME SALES SURGE

Meanwhile, the market for super prime properties – those worth £10 million or more – has skyrocketed.

Sales have doubled in 2021 compared to the previous year, and from October to December we saw the highest number sold in any three-month period since 2016.

Katherine O’Shea, Director, Coutts Real Estate Investment Service, says, “There appears to be a sense of opportunity as super prime buyers take advantage of a central London market that’s had pretty stagnant growth for a number of years.

“For many investors there’s a desire to put funds into assets they can enjoy; for others it’s simply about investing in real assets that appear cheap compared to historic prices.”

Data for Q4 2021. Source: Coutts/LonRes
(January 2022)

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CHAPTER 03
THE MARKET IN NUMBERS

The latest numbers and analysis on luxury London property come from our regular review of the market – the Coutts London Prime Property Index (CLPPI) – which reveals overall trends and what’s happening area-by-area (see below).

Key highlights for the last three months of 2021 include:

• prime property prices increased 3 per cent, which brings annual house price growth to 5 per cent – driven mainly by outer prime London markets
• prices are still low historically though – currently 8 per cent below what they were when the market peaked in 2014
• super prime (£10m+) property prices have risen 11 per cent in the last year
• over a third of high-end London property is being sold at a discount but buyers are getting less off the asking price – around 7 per cent compared to 8 per cent the previous year, and 13 per cent three years ago
• the number of properties available for sale has dropped – down 17 per cent on the previous year – and new listings are down 12 per cent
• the difference in price between central London and other parts of the capital has shrunk dramatically – four years ago central property prices were over 70 per cent more expensive than outer prime markets, now they’re roughly 58 per cent pricier

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