Super-rich make London the global hotspot for luxury homes

High-end buyers spent $4bn in the UK capital last year on properties worth $10m or more

A street of elegant Victorian Edwardian luxury houses in the exclusive area of South Kensington, London. Alamy Stock Photo

The super-wealthy spent more on luxury homes in London last year than in any other city across the globe, real estate consultancy Knight Frank said.

International buyers spent almost $4 billion on super-prime properties in the UK capital in 2020 – homes with a price tag of more than $10m.

The sum is higher than the total spent on similar pads in any other city in the world, outstripping property hotspots such as New York, Hong Kong and Singapore.

“London’s super-prime residential market shrugged off Brexit and even looked through the pandemic, confirming the UK capital as the world’s leading wealth destination," said Liam Bailey, global head of research at Knight Frank.

"After five years of price falls, the capital is set for a reset and the latest numbers from Knight Frank’s super-prime data confirm that London is on top of the world.”

Britain’s economy ground to a halt at the start of the pandemic last spring, causing a standstill in the real estate sector.

However, neither the cycle of lockdowns nor travel restrictions failed to dent the appetite for London property.

The number of sales above $10m in the capital was up on 2019, with the influx of capital from overseas coming after many Londoners relocated to the outskirts of the city or to larger homes with more space in the countryside.

In total, 201 super-prime properties were sold in London at an average price of $18.6m, with 31 of those buyers paying $25m or more.

Out of the usual top markets, the UK capital saw transactions rise by 3 per cent, while Hong Kong and New York saw theirs fall by 27 per cent and 48 per cent respectively.

Domestic buyers accounted for a third of all activity in London’s $10m-plus market last year, up from 12 per cent in 2019. European buyers were also more prevalent due to the relative ease with which they could reach the city.

One of the biggest sales of the year involved a £58m ($67.1m) mansion in the leafy area of Belgravia, which was bought by British industrialist Sanjeev Gupta.

A weaker pound and the resolution of the Brexit saga, which had dampened appetite for London properties and depressed prices, caused the surge in demand, Mr Bailey said.

The average British house price hit a record high of £254,606 ($348,891) in March, as the market saw a resurgence in activity after UK Finance Minister Rishi Sunak's extension of the stamp duty holiday in his annual budget.

House prices in March were 1.1 per cent higher than in February, the first rise since November, the Halifax House Price Index showed, and 6.5 per cent higher than in March 2020 – the equivalent of £15,430 in cash terms.