The super-rich bought more homes in London than any other city in the world last year, according to new figures from estate agent Knight Frank, with buyers lured by the weak pound and the end of the UK’s Brexit saga.
Buyers from around the world spent almost $4bn on so-called super-prime properties in the UK capital, which are classified as anything with a price tag of $10m or more.
That is more than the total spent on super-prime homes in any other city last year, with London leapfrogging Hong Kong and New York, according to Knight Frank.
Despite travel restrictions and the fact that the UK’s housing market was effectively locked down between March and May 2020, the number of sales above $10m in London last year was up on 2019, with Russian, French and Chinese buyers particularly active.
The influx of money from overseas came as many London residents looked to the suburbs and the countryside in search of more space in the era of homeworking.
“The story all last year was that people were moving out of cities. But quietly there were some big purchases taking place,” said Liam Bailey, global head of research at Knight Frank.
In all, 201 super-prime properties were sold with an average price of $18.6m. In 31 of those transactions, buyers paid $25m or more.
One of biggest sales of the year was the purchase of a £42m Belgravia mansion by British industrialist Sanjeev Gupta, revealed last month by the Financial Times.
Buyers of $10m-plus homes in London and elsewhere are a narrow, international set, motivated and constrained by entirely different factors to those that move the mainstream housing market.
Where they choose to buy signals as much about the relative attractiveness of a city’s tax regime or its safety as a place to store wealth as it does about livability.
Despite the pandemic, the $19bn spent on super-prime properties across a dozen cities monitored by Knight Frank last year was just 5 per cent less than the 2019 total.
London’s attractiveness has been burnished by the conclusion of Brexit negotiations and the fact that average prices in the most expensive postcodes are down around 20 per cent from a 2015 peak, said Bailey.
Another large factor driving strong sales was the cheapness of the pound against the dollar and euro, he added.
Super-prime sales in New York fell 48 per cent last year as wealthy buyers looked to sunnier coastal cities in the US such as Palm Beach, Los Angeles and Miami.
Trade in Hong Kong, which had the highest number of $10m-plus sales in 2018 and 2019, fell 27 per cent, hit by political uncertainty and tough coronavirus measures, said Bailey.
“There’s still a cachet to a London residence even if you’re not in it for months at a time. If you’re super wealthy you will have a plane, a helicopter, a superyacht and your place in London,” said Nathalie Hirst, a London-focused buying agent whose clients are hunting homes with a budget of up to £100m.
“I had clients predicting doom and gloom, Armageddon, but the property market has carried on,” she said.