London's £5 million-plus residential market has recorded its strongest start to the year ever, according to real estate advisor, Savills, which has kept a detailed log since 2006.
• 128 £5million-plus second-hand and new build sales in Q1 2022 - 25% higher than Q1 2021
• Sales valued between £5 - £10 million dominated the first quarter – with more than £600 million spent in this price band
• Return to prime central London: two in every five second-hand sales took place in established prime postcodes such as Kensington, St Johns Wood, Belgravia and Chelsea.
In total, there were 128 second-hand and new build sales priced at over £5 million in the first quarter of 2022, which is +25% and +24% higher than Q1 2021 and Q1 2020 respectively.
Sales valued between £5-10 million dominated this quarter – with more than £600 million spent on properties in this range. This is a third up (+34%) on Q1 2021 and 23% higher than Q1 2020.
However, the overall average value of transactions in Q1 2022 was £8.9 million, 18% lower than the £10.8 million recorded in Q1 2021, reflecting lower levels of activity at the £10 million-plus end of the market.
"Last year we saw London's super-prime residential market record its strongest year since 2013 and the activity seen so far this year is evidence that appetite remains strong. Significant sales volumes between £5 and 10 million signals that domestic buyers are continuing to dominate the market, however, this has been bolstered by a slight uptick in international buyers returning to the market at the start of the year," says Frances Clacy, research analyst at Savills.
"While prices remain good value historically – both flats and houses in prime central London have now recovered from pandemic falls – and the market looks ripe for further growth in the remaining eight months of the year."
Two in every five super-prime second-hand sales were located in either Kensington (+12.1%), St John’s Wood (+12.1%), Belgravia (+10.1%) or Chelsea (+9.1%), in the strongest yet indication of prime central London bouncing back, post-pandemic.
Savills latest sales index (Q1 2022) revealed that prime central London recorded its strongest quarterly price growth in eight years as international buyers began to re-enter a stock-constrained market that has been largely dominated by domestic buyers over the past two years. Prices ticked up +1.1% in the quarter, leaving them +2.8% higher than a year ago. Though still outpaced by the country, this was the most robust performance since the stamp duty changes of 2014.
Jonathan Hewlett, Savills Head of London Residential says, "The market during the pandemic was dominated by the race for space, and as a result, we saw leafier locations with typically larger homes – such as Wandsworth, Wimbledon, Richmond and East Sheen – outperform the rest of London.
"However, prime buyers who headed out to the country during the pandemic are now being drawn back in as the City finally returns to normal, and we are now seeing domestic buyers return to traditional prime hotspots famed for their traditional housing stock. Old-established postcodes such as Kensington, Belgravia and Chelsea are now reasserting themselves, which is a trend we only expect to strengthen throughout the year."
Mark Elliott, Senior Director, Head of International Residential Sales of Savills says: "Since Q1 2013 prime central London and super prime London have been in a bit of a bottoming out process in terms of prices. As we come out of the COVID-19 pandemic in the UK and as the rest of the world starts to travel again, we have noticed a drastic increase in clients in Hong Kong looking for properties between £5 and £15 million. It is a part of the market that we know very well and it is a welcome change."