Coutts London Prime Property Index | Q4 2018

Super prime property looking up

London’s priciest properties are bucking the trend of today’s listless housing market by selling fast and fetching the asking price.

This is good news for homeowners at the very top of the capital’s luxury housing market. It reflects the resilience of so-called ‘super prime’ property in times of greater uncertainty – such as the current dampened market mood brought on by Brexit.

Properties worth £10 million or more are selling within three months on average – the shortest period since the start of 2016. This is a marked improvement on the last quarter of 2017 when they took over six months to sell.

Only a fifth of these properties are being sold at a discount too – again, the lowest number for three years.

Katherine O’Shea, from the Coutts Strategic Solutions team, says, “The latest numbers prove there’s always a place for super prime property. There are more billionaires living in London than any other city in the world*, the M&A market is booming – good for entrepreneurs’ bank accounts – and high-end London property is often popular with lottery winners.

“Also, the weaker pound favours foreign buyers looking to take advantage and get a good deal on a luxury London home.”

* Sunday Times Rich List, May 2018

Bigger picture still sluggish

The broader prime property market continues to tell a different story, however.

High-end London homes – those valued between £1 million and £10 million – are taking over five months to change hands. That’s a 10% rise on how long they took at the tail-end of 2017. More than half are selling below asking price with buyers getting almost 13% off on average. There are fewer sales than a year ago too, with the number of London’s prime properties sold in the last three months of 2018 down 12%.

This is all happening even though prices are 7% lower than the same period last year and are 17% below their 2014 peak.

“People are feeling cautious at the moment due to Brexit and the stamp duty hikes introduced in 2014 and 2016,” says Katherine. “This is still affecting prime property sales. Transactions are taking more time partly because renegotiation on the price is more common in times of uncertainty.”

But she adds, “The number of properties under offer at the very end of the year was higher than the end of 2017, which could be a sign that sales volumes will increase in the coming quarter. But it’s also indicative of a market that simply has a longer sales cycle – from an offer being accepted through to the exchange of contracts.”