After a slow start in the first quarter of 2023, London’s property market for residences worth over £5m is back on track, according to a new analysis by real estate advisor, Savills.
The analysis reveals that buyers are price sensitive and are focusing on top-tier properties and locations.
From April to June 2023, a total of 132 properties valued over £5m were sold, up from 108 in the first quarter. In total, 240 such properties have been sold in the first half of the year.
Though this represents a 21% decrease compared to the first half of 2022, it aligns with the numbers for the same period in 2021 and is 45% above the pre-pandemic average of 166 properties for the first half years of 2017 to 2019.
Sales of properties over £10m also saw a slight increase with 65 transactions year-to-date, which is marginally higher than 2021 and 17% above the 2017-2019 H1 average. However, these sales remain below the numbers for the same period in 2022, which saw 91 transactions.
Frances McDonald, director at Savills residential research, commented on the market recovery. “These latest quarterly figures underscore the remarkable resilience that we have seen in our prime central London index, which fell a marginal -0.9% year on year. Momentum will only be maintained if buyers and sellers remain aligned in their expectations,” McDonald said.
In value terms, properties over £5m sold for a total of £2.4bn year-to-date. This is down from the £3.1bn in the same period last year.
Savills also reported a shift in property types. Apartments now account for 44% of transactions over £5m year-to-date, up from 40% last year and just 28% in 2021. McDonald attributes this to the completion of various world-class new build schemes, as well as a shift from the pandemic-driven demand for larger homes with private outdoor space.
Top locations for these sales remain Chelsea, Kensington, and Belgravia, which make up a third of all £5m-plus sales this year. However, new developments like The Whiteley and Park Modern in Bayswater are redrawing the prime property map, according to Savills.
Ed Lewis, Savills head of London residential development, commented on the limited availability of prime central London properties. “New supply will be squeezed by local government restrictions on the size of residences that can be built in the future, and it’s become clear that those buyers looking for the very best may be frustrated by the lack of choice in future years,” he said.
Alex Christian, co-head of Savills Private Office, added: “Selling in this market invariably requires pragmatic ‘open for business’ pricing. The houses in schemes such as Chelsea Barracks represent a real once in a decade opportunity.”
