132 London homes worth £5m-plus EACH sold in six months

2023-07-14

Big spenders! More than 130 homes with price tags of £5m-plus EACH sold in London in the past three months, despite wider economic concerns

A total of 132 London homes priced £5m-plus were sold in three months to June
Cash buyers have accounted for 71% of prime central London deals

A total of 132 properties in London that were worth more than £5million each changed hands in the three months to the end of June 2023.

It is up from 108 similarly priced properties during the first three months of this year, but down from a figure of 163 homes sold at this level during the second quarter of 2022.

However, all these numbers are significantly higher than the total seen seen in the three months of 2020 leading up to the start of the pandemic, which stood at 102.

High prices: A total of 132 properties in London that were worth more than £5million each changed hands in the three months to the end of June 2023

The increase this year may raise some eyebrows given the economic backdrop where mortgage rates have risen above 6 per cent.

However, many of these house hunters were cash buyers who are not exposed to concerns around rising interest rates.

This year, cash buyers have accounted for 71 per cent of prime central London deals and 35 per cent in outer prime London, according to Savills.

The estate agent explained that while the posh homes figures for the start of the year showed remarkable market resilience against the wider economic picture, buyers were still cherry-picking the best properties and were ‘price sensitive’.

The number of sales in the first quarter of this year is a 21 per cent drop on sales in the first six months of 2022, but the estate agent said it was ‘on a par’ with the same period in 2021.

It is also 45 per cent higher than the first six months average of just 166 for the three years between 2017 and 2019 – just before the pandemic started.

Frances McDonald, of Savills, said: ‘The first quarter marked a slowdown after an intense period of activity from mid-2021 as buyers refocused on city life.

‘These latest quarterly figures underscore the remarkable resilience that we have seen in our prime central London index, which fell a marginal -0.9 per cent year on year.’

Savills said that at the £10 million-plus end of the market there have been 65 sales year to date.

This is marginally higher than in 2021 – at 63 sales – and 17 per cent above the 2017 to 2019 first half average. However, it is once again below the same period in 2022 when 91 transactions took place.

McDonald added: ‘A backdrop of unsettling domestic and international economic indicators means that even the cash-driven very top end of the market is price sensitive, particularly given its discretionary nature.

‘Momentum will only be maintained if buyers and sellers remain aligned in their expectations.’

In value terms, over £2.4 billion worth of £5 million-plus properties have transacted year to date, according to the Savills data. At the same time last year, that figure stood at £3.1 billion.

No need for a mortgage? Cash buyers have accounted for 71% of prime central London deals, according to Savills

There has also been a shift in the mix of properties selling, with flats accounting for a growing share of sales as pandemic memories fade.

A total of 44 per cent of £5 million-plus transactions took place across London year to date, up from 40 per cent last year and just 28 per cent in 2021.

McDonald said: ‘To an extent this reflects the completion of a number of world class new-build schemes, and buyers focused on turnkey properties, but it also marks a clear shift away from a time when larger homes with private outdoor space topped every buyer’s wish list.’

There remains a market for well-priced, best in class properties in London’s most long-established prime locations.

Chelsea, Kensington and Belgravia accounted for a third of all £5million-plus sales so far this year.

Savills agent Alex Christian added: ‘While there are a lot more buyers in the market than at the turn of the year, all are adopting a “belt and braces” approach to every aspect of a purchase. Selling in this market invariably requires pragmatic “open for business” pricing.’

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