Prime central London residential market recovery continues with strongest £5m+ sales since 2014

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London’s super prime residential market continues to show clear signs of recovery, with more £5million-plus sales recorded in the first four months of the year than in any year since 2014, according to real estate advisor Savills.

There were 43 £5million-plus sales during April 2021, the highest April figure since 2014.  This brings the total for the first four months of the year to 142, a third higher than in the same period in 2020 and 65% higher than in 2019.   Again, this is the strongest performance since 2014, when there were 159 deals in the same four months, and this despite the introduction of an additional 2% surcharge on buyers based overseas.

The total spent on these deals has also increased, reaching £1.42 billion in the first four months of the year, 32% more than in 2020 and 63% more than in 2019.  That puts the average deal price at just over £10million.

“Prime central London values looked ripe for recovery in early 2020 after five years of price falls which left prices around 20% below peak,” said Frances Clacy, Savills research analyst.

“The pandemic put that on hold but does not appear to have dented the appeal of the city’s very best residential real estate despite the additional 2% surcharge introduced on 1 April for all overseas-based buyers.

“It now looks as though buyers are themselves calling the bottom of the market and acting on the perceived value – a window of opportunity that could close quite quickly.  This is particularly true of domestic and UK domiciled buyers, who’re able to take advantage of the low levels of competition from overseas buyers until travel corridors reopen. 

“Unsurprisingly, in the race for space the domestic house market is stronger than the flat market, but we expect this to rebalance as international buyers start returning to the market over coming months.”

Savills forecasts price growth of 3% this year and 7% in 2022, with total growth to the end of 2025 expected to reach 21.6%.

All sales over £5m in London, number£5m – £10m£10m+Total
Jan-Apr 2019602686
Jan-Apr 20207829107
Jan-Apr 202110636142
19 v 2176.7%38.5%65.1%
20 v 2135.9%24.1%32.7%

Source: Savills Research

All sales over £5m in London, total value (£bn)£5m – £10m£10m+Total
Jan-Apr 2019£0.40£0.47£0.87
Jan-Apr 2020£0.53£0.55£1.08
Jan-Apr 2021£0.71£0.71£1.42
19 v 2176.6%52.0%63.4%
20 v 2134.6%28.6%31.5%

Source: Savills Research

The highest concentration of domestic buyers was seen W11 (Notting Hill and the fringes of Holland Park) accounting for 13.6% of deals year to date compared to the 8.2% average over the previous four years. This ties in with Savills Q1 index, which saw Notting Hill the top performer with quarterly growth of +1.3%, compared to average growth across prime central London of 0.4%.

The £5million-plus price tag is also continuing its reach across the UK capital.  The leafier suburbs of west and southwest London have accounted for around 6% of sales at this price point, up from just 2.6% in 2017. 

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