The news this month concerning the prime London property market has been decidedly downbeat, with many commentators and media sources speaking of a ‘cool down’.
According to Business insider, the reasons for this range from increases in stamp duty on more expensive properties, to prices climbing too high. The Financial Times meanwhile has said that the number of ‘buying agents in London – brokers working on behalf of wealthy property buyers – has more than halved in the past two years.
Money Week has furthermore pointed to the fact that the recent high value of Prime London Property has quite naturally resulted in an increase in the supply of such property. According to the publication, “more than 50,000 apartments in the £1m-plus target market are either being built or are in the pipeline… this is despite the fact that less than 4,000 such flats were sold in 2014.”
This accumulation of factors may suggest that prime London prices could potentially soon experience a dip.
“With a soon to be overstocked supply, a reduced number of buyers and general reluctance in the market at present, 2016 may well be the year for shrewd investors to purchase prime London property for less,” commented Vanet’s director, Joel Brookes.
A rare breed – the sub-£1million Mayfair property
Mayfair has long been the very epitome of Prime London luxury, but even so there has been some room for manoeuvre at the (relative) lower end of the market for buyers with less than a million pounds to spend. But it may soon be harder for these affluent yet not quite so affluent buyers to get a foothold in the exclusive Central London district.
According to a recent survey, less than 5% of homes in Mayfair are now priced below £1million, while almost half of all properties in the exclusive area of the city currently cost between £2million and £10million. A further 11% cost in excess of £10million.
If you’re looking to get a home in Mayfair for less than a million you may well have a long search followed by a bidding war on your hands. What’s more, 60% of those properties below £1million still retail at upwards of £950,000, and the absolute minimum price tag is £750,000.
“These figures confirm what many in the Prime London property market have known for a long time – that Mayfair is one of the most desirable areas of real estate in the capital, and indeed the country,” commented Vanet’s Head of Sales and Lettings Paul Bartolo. “It’s understandable that properties in the area have a price tag to match this reputation.”
Kensington and Chelsea tops list of expensive areas
One of Central London’s other renowned havens for the rich and the famous meanwhile – Kensington and Chelsea, has recently been revealed as having the highest proportion of properties selling for a million or more in the country. According to the Office for National statistics, 57% of properties in the borough were recorded as selling for in excess of a million for the year ending September 2015. The City of Westminster came in second, with 42% of properties exceeding the million mark.
Prime London property solid in face of ‘Brexit’?
Finally, Property Wire has suggested this month that, “the prime property market in London is likely to retain its attractiveness to wealthy international buyers regardless of what happens in the forthcoming referendum on UK membership of the European Union”.
The publication cites London’s cultural attractions, ‘legal system’, geographic location and numerous opportunities as reasons for its continuing popularity with overseas buyers. Vanet’s Joel Brookes has meanwhile commented that, “in the EU or out of the EU, London is a fantastic global city and its prime areas are associated with the very best in luxury living. That’s always going to appeal to people.”
The Spectator has also weighed in on the issue of Brexit, with Ross Clark pointing out that, “as for non-EU nationals, most important to the London prime market at present are those from Russia (9%) and the Middle East (7.5%)… What attracts these international buyers to London are political and economic stability, an honest legal system, favourable rules for non-doms and a vibrant cultural life. None of that is threatened by Brexit.”
Whether Britain votes to remain in the EU or leave, it seems likely that prime London’s status as a highly desirable part of the world to own property and live in, is unlikely to diminish come July.