How did Covid-19 spark super-prime home sales in London? More US$10 million-plus homes were sold in the UK capital in 2020 than any other global housing market – even New York and Hong Kong
- Not even Brexit could stunt luxury residential sales in London, cementing its status as the world’s leading wealth destination
- Elite central London neighbourhoods like Mayfair, Belgravia and Knightsbridge have even seen ‘giga-prime’ homes – US$100 million mega-mansions and penthouses
Who would have thought that lengthy pandemic-induced lockdowns would have sparked a bull run in London’s prime housing market, even as the economy was rapidly contracting?
In a new research report, Lucian Cook, head of residential research at Savills, ponders the unforeseen outcome that, he argues, has “continued to surprise many”.
Yet, according to data agency TwentyCi, since June 2020 the number of sales of £1 million (US$1.38 million) homes per month has typically been between 60 and 95 per cent above levels seen in the period 2017 to 2019, while in April they exceeded twice the level of normal market activity for the first time.
Cook reasons that with the ability to lock in low costs of borrowing, wealthy and financially secure households have had both the inclination and opportunity to reassess their housing preferences.
“And while the lockdown in the first quarter of this year temporarily caused some to put their plans on hold, the prolonged nature of social distancing appears to have embedded the changes in buyer priorities in the short term at least,” he says. “In March and April, deals being struck for the sale and purchase of £1 million homes were again 94 and 112 per cent above normal levels for the month.”
Rory Penn, joint head of Knight Frank Private Office, adds that despite the pandemic, more residential “super-prime” sales above US$10 million took place in London in 2020 than in any other global market, with the US$3.7 billion transacted in the city at this level outpacing that in its usual rivals, New York and Hong Kong.
“The UK capital saw transactions rise by three per cent in 2020, while Hong Kong and New York saw theirs fall by 27 and 48 per cent respectively,” Penn says. According to Knight Frank data, domestic buyers accounted for a third of all activity in this segment, up from 12 per cent a year earlier.
