Super-wealthy spending less on London property

Competition from Dubai and political uncertainty leads to £100m year-on-year drop in deals worth £15m or more in first half of 2024

A mansion on Park Street was sold in March for £25 million ($32.4 million) to a Middle East businessman from the Gulf. All photos: Lawrie Cornish

The Park Street first-floor reception room

A Greybrook House Penthouse in Mayfair sold in January for the £21.5 million asking price to a businessman from Abu Dhabi

A reception room in the Greybrook House Penthouse

A penthouse in Oceanic House was sold in June for £1.25 million under the £16.25 million asking price to an EU buyer

The Oceanic House roof terrace

A townhouse on Mayfair's Aldford Street was sold at the end of March to a British businessman for £10 million, substantially under the £12.9 million asking price

The Aldford Street townhouse kitchen

Frognal Rise House in Hampstead sold for £10 million to a European buyer

Drawing room at Frognal Rise House

Rising competition from Dubai and concerns about a change in government led the super-rich to spend less and buy smaller properties in central London in the first half of this year, a wealth survey has found.

The research by Beauchamp Estates found there was almost a £100 million ($129.8 million) drop in sales of properties priced £15 million or more in the capital’s best postcodes, compared to the same period in 2023.

Between January and June 2024, there were £731 million worth of deals in the area known as Prime Central London, compared to £829 million in that market in the same period last year.

Paul Finch, director at Beauchamp Estates, told The National that political uncertainty was partly to blame, beginning with the Conservative government's announcement earlier this year of the end of the non-dom system, followed by the summer general election.

“I think people still want a piece of Prime Central London,” he said. “I just find that buyers today are a bit more fickle than they used to be.

“Give them an excuse to sit it out and wait on their hands, and they will.”

The market has still featured sales of big houses and mansions but some of the offers are substantially below the asking prices and many of the properties involved are smaller, he said.

The majority of sales in the first six months of the year were in the £15 million to £25 million price range, driven by US and Middle East buyers, who bought spacious pied-a-terre apartments ideal for occasional stays, said Beauchamp.

Sales included a penthouse in Greybrook House on Brook Street in Mayfair for £21.5 million to a businessman from Abu Dhabi to use as his London pied-a-terre, a duplex on Charles Street in Mayfair for just under £15 million to a US buyer and a £15 million penthouse in Oceanic House in Westminster to an EU citizen for use as his London pied-a-terre.

The £21.5 million Brook Street penthouse sold for its asking price but the Oceanic House penthouse went for £1.25 million under the £16.25 million price tag.

Another corner town house on Aldford Street and Rex Place in Mayfair sold for £10 million, substantially under the £12.9 million asking price.

“Clearly potential buyers are trying to factor in stamp duty and taxation changes into their offers in order to de-risk their purchases,” said Mr Finch.

“However, the other big reason is global choice and competition from other wealth centres such as Dubai, Miami and the French Riviera.

“Currently what they are doing is buying pieds-a-terre in London, but alongside this they are purchasing big villas and penthouses in Dubai, taking advantage of the emirate’s current property boom, and post-Covid there has also been a significant return of affluent international buyers to the French Riviera and Miami.”

The London market is still popular with Middle Eastern buyers, he said, although it has been quieter. And while there has been a reduction in their number, it has been to a lesser degree.

However, activity should pick up now that Labour is in power and has a large majority, which will bring some stability to the market, said Mr Finch.

“A Labour government now is going to be pretty vanilla. They can tinker around the edges, so I think they will make a few changes. The might mess around with capital gains tax a bit. That might be an issue. But generally, what keeps the market steady is certainty.”

Some of the biggest deals of 2023 were clinched towards the end of the year, he said, and it could be the same story for this year, said Mr Finch.

“I already sense there are people coming out of the woodwork. For us, often the bellwether is buying agents, we have this person who is about the sign up. Once you get that uptick you know that those deals are going to start happening in September and they are going to close before Christmas, so we will probably have the same as last year.”