As Londoners search for space and international buyers return to the city, London’s super-prime property market is seeing the highest demand in six years.
The first three-quarters of this year have seen the highest number of super-prime sales in the city since 2014. Over 350 properties priced at over £5m ($6m) were sold between January and September 2021, almost 100 of which were over £10m ($13.8m).
This is a 43% increase in super-prime sales volume compared with the same period in 2020, which had already been stronger than the previous year. In total, super-prime sales in the first three-quarters of 2021 totalled around £3.5bn ($4.8bn), a 40% increase on the value sold in the same period in 2020.
More in-depth analysis using the UK land registry shows that, for non-new build sales, Central London is the most popular. Two-thirds of London sales priced over £5m ($6m) in the past year were in Westminster and Kensington and Chelsea.
But there are also strong sales in outer boroughs too, with buyers spending £5m ($6m) or more on large properties close to the river or large parks of London’s suburbs.
A former pub next to the famous Fullers brewery in Chiswick, which has been renovated as a stunning seven-bedroom property with a view of the River Thames, sold for £6.4m ($8.8m) last November.
In Enfield on the edge of Hertfordshire, two super-prime houses on the coveted Beech Hill road, sold within a couple of weeks for each other – with buyers attracted to the spacious properties and the proximity to the countryside.
This high level of activity in the super-prime sales market is putting even more pressure on the rental market. As many owners capitalise on the resurgent sales market and buyers' search for space, the number of so-called ‘accidental landlords’ decreases.
Analysis by Knight Frank and LonRes found that the number of lettings (rentals) listed for over £5,000 ($6,875) per week in Q3 of 2021 was the lowest since 2016. The number of super-prime lettings in the first three quarters of 2021 is less than a third (31%) of the number in the same period for 2020.
Tom Smith, head of super-prime lettings at Knight Frank, says the past summer in particular has been a perfect storm.
“A number of people in London were affected by flooding, which produced a spike in tenants needing a rental property for six to nine months,” said Smith. “On top of that, people came back from holiday, there was a seasonal rush ahead of the schools reopening and all that was happening just as international travel was kicking back in.”
The result? The average super-prime rent in 2021 is £7,819 ($10,750) a week, up 8% on 2019.
In lettings, it is the most central locations that have the highest popularity, with Belgravia and Mayfair making up almost a third of super-prime lettings so far in 2021, compared with less than 20% in the same period of 2020. Meanwhile, Hampstead has seen the biggest fall: from January through September last year it accounted for 12% of super-prime lettings, but this year just 3%.