The London prime property market weathered the storm of wider economic turmoil last year with the price of million pound and £10 million plus properties increasing by 0.5 per cent as 2022 drew to a close.
This brought the annual house price growth of luxury homes to three per cent in 2022.
The tide looks to be turning, with 2023 gearing up to be a buyer’s market, according to last quarter’s findings from Coutts London Prime Property Index.
Outer versus inner central London
Whereas the pandemic saw a ‘race for space’, inner central London is regaining popularity.
Prime property in leafy outer central London was in high demand during lockdown with prices in ‘King’s Cross and Islington’ increasing by almost a quarter (23.5 per cent) in the last five years.
The two areas – ‘St. John’s Wood, Regent’s Park and Primrose Hill’ and ‘Hampstead and Highgate’ – also both saw a bounce, with prices increasing by nearly a quarter (24.7 per cent and 22.8 per cent respectively) since the beginning of the pandemic.
Now however, activity is expected to remain strongest in those parts of the capital such as ‘Mayfair and St James’ and ‘Kensington, Notting Hill and Holland Park’ which are attracting foreign and American buyers taking advantage of strength of the dollar versus the pound.
These property purchasers are also less reliant on mortgages to make their purchase, versus domestic buyers looking towards outer central London. Another reason why activity is expected to remain strongest in prime central locations.
Bagging a ‘bargain’
More prime properties are being reduced in price from their initial listing giving buyers the upper hand.
More than a third (34.7 per cent) of luxury homes were marked down from their original price, with the average discount rising to 7.7 per cent, up from 5.6 per cent the previous quarter.
Some of the most prestigious prime central locations are now offering the best ‘value’ for money. Prices in ‘Knightsbridge and Belgravia’, ‘Mayfair and St James’ , ‘Pimlico, Westminster and Victoria’ are now 17.0, 16.6 and 15.5 per cent per cent below the height of the market respectively, offering attractive investment.
Coutts Real Estate Investment Service Director, Katherine O’Shea, says: “London has always attracted international buyers lured by the elegance, tradition and architecture of the capital.
“This was particularly true towards the end of 2022 with American buyers taking advantage of the favourable exchange rate and prime central London property prices still not returning to their peak. If last year is anything to go by – 2023 is shaping up to be a buyer’s market.”
