Like many cities across the UK, London experienced a lull in buying activity throughout 2020 because of the pandemic, with modest and uneven price growth across the City’s exclusive neighbourhoods.
Over the past year, however, high net worth (HNW) individuals have begun to return to the residential market here, with buying activity rising 28% above pre-pandemic levels, according to London residential data service, LonRes.
London boasts some of the best high-end residential properties in the UK, but for first-time HNW buyers, getting onto the property ladder here can be challenging – from knowing where to buy amongst the many sub-markets here, to ensuring you are in the best financial position to secure the property you want.
In this update from our family office team, we explore the various high-end residential markets that London has to offer, and provide an update on how each is performing, to help you make an informed decision about where best to get on the high-end residential property ladder.
But first, let’s explore where the prime residential property market is exactly.
It can be broken down into three main categories:
- Central London Prime: Encompassing such as Knightsbridge, Chelsea, Mayfair and Kensington.
- Prime London: Covering Regents Park/Primrose Hill, Hampstead, St Johns Wood, Westminster, Marylebone and Notting Hill/Holland Park.
- Prime Fringe: Covering the likes of Chiswick, Fulham and Hammersmith as well as Battersea, South Bank and Kennington south of the Thames.
How has each market performed in 2021, against the national backdrop?
Demand for residential property remained high across the UK throughout the first half of 2021, as families continued to seek properties offering a better standard of living, with space inside and out – indeed, the Yorkshire Dales has become the epicentre of Britain’s pandemic house price boom.
The same has been true in London, where the London Prime market enjoyed 237 £5m-plus property transactions in the first six months – 59% above the first half of 2020, when the UK first went into lockdown.
This was driven, in part, by the temporary Stamp Duty Land Tax (SDLT) holiday which ended in June and boosted the market, but also by the desire for many HNW individuals to seek a permanent home in central London.
Many HNW individuals already living in London sought to upsize their properties in 2021, with the addition of more or better outside space, and there was also an increase in the number of residential purchases for children.
We have seen evidence of this in areas such as Notting Hill, Bayswater and Holland Park which experienced the highest demand, reflecting the attractiveness of these areas to long-term residents looking for a family home.
Initially, the Central London Prime market, Belgravia, Knightsbridge and Mayfair in particular, were impacted by restrictions on international travel from the Middle and Far East, preventing overseas buyers from viewing and purchasing properties here. This resulted in price falls of over 3%, according to LonRes – a good opportunity for domestic buyers to take advantage of.
However, with travel reopening from the Middle and Far East, we expect this window of opportunity for domestic investors to close quite quickly.
We are already seeing an uptick in the Central London Prime market, which throughout the second half of 2021, experienced it strongest period of growth for some time. However, this is yet to translate in price growth terms – again, a good opportunity for the astute investor.
The Prime London market, including Notting Hill, experienced particularly strong domestic demand, appealing to both domestic buyers and resident non-domiciles seeking a family home. Prices here have remained relatively static, rising by just 0.2%.