The £10 million-plus market that’s defying the downturn

While cautious buyers and a dip in transaction levels have characterised much of the UK property market in recent months, one sector remains resolutely buoyant. Sales of London’s most prestigious super-prime properties, priced at £10m or more, have bucked the slowdown, seemingly resistant to prevailing economic headwinds.

According to Frances McDonald, director of residential research at Savills, during 2022 sales of homes across London priced at £10m and above rose by 17% compared to 2021. Sales of homes priced between £10m and £15m increased by 25%, while those in the £15m-£20m bracket saw a 42% rise. Although the number of sales in Q1 2023 declined compared with the same period in 2022, a residual effect of the autumn mini-budget, the general direction is clear: sales of properties priced at £10m and over remain above their pre-pandemic levels and have risen by 50% compared to Q1 2019.

It was a very different picture across London as a whole, according to Nationwide, with the capital registering some of the weakest annual price growth of the UK’s 13 regions throughout 2022. Property prices in the city fell by 2.2% in the first quarter of 2023, although a surprise 0.5% price rise across the UK in April 2023 offers hope of a recovery.

Why have London homes priced over £10m proved so resilient? “While we have seen increased caution across all price ranges, it’s always been clear that the wealthiest buyers are not as affected by fluctuations in interest rates and the cost of living,” explains Pete Bevan, director of residential sales in Savills Kensington office. “The £10m-plus market is driven largely by sentiment.”

The neighbourhoods that saw the largest proportion of sales at this price point in Q1 2023 cover prime central London’s eternal favourites. The Georgian mansions and contemporary apartments of Mayfair headed the list, registering 20% of all sales. Chelsea and Knightsbridge both saw 13% of sales, with Kensington and Belgravia, home to classic properties on elegant garden squares, each recording 10%.

“Mayfair’s top position is testament to its increasingly wide appeal to international buyers,” says Fehd Alsaidi, associate director at Savills Mayfair office. “It offers an unbeatable lifestyle, with the finest restaurants, hotel bars, world-class brands in flagship boutiques and elite members’ clubs all within a 10-minute walk. The Grosvenor Estate, major landowners here, invest heavily, constantly updating to ensure Mayfair remains beautiful, and that’s good news for property investors.”

A budget of £10m in Mayfair would buy a four-bedroom house, a three-bedroom resale apartment or a two-bedroom apartment at newly launched 60 Curzon, a development with outstanding leisure and sporting facilities, 24-hour concierge service and underground parking. “Mayfair buyers have historically favoured apartments, but in the past year or so we’ve seen a resurgence in house sales,” says Alsaidi. “This is because of the relative value per square foot that houses offer, as well as a continuing post-Covid desire to have good private facilities at home, gyms and pools.”

In west London, an exceptional townhouse on the Phillimore Estate, bordering Holland Park, and a white stucco mansion on Brunswick Gardens, one of the “cherry-tree roads” near Kensington Palace, are typical of the properties Bevan sells. These are splendid historic homes with instant appeal, many of which never come to the open market. “Over £10m, and especially over £15m, we have some exceptional properties, but they are mostly off-market,” he says. “Both buyers and sellers appreciate discretion and privacy.”

Bevan points out that sterling’s weakness in autumn 2022 played a key role in the performance of super-prime properties. The pound reached near-parity with the US dollar, briefly falling to US$1.035 in September 2022, then continuing at historic lows for several weeks. Those with dollars to spend could see the economic appeal, especially given that prices in prime central London in Q1 2023 were 18.3% below their 2014 peak – about 40% below in dollar terms.

“In Kensington and Notting Hill, those buying with mortgages will have budgetary constraints, but at these higher price points it’s an international market,” says Bevan. “While the currency situation has made the UK significantly more interesting, London was already hugely attractive as a silicon hub and premier funding environment.”

To underline this, he points to Eldon Road, a recently completed Finchatton house in Kensington’s De Vere Conservation Area, priced at £14.25m. A grand five-bedroom property with gardens and off-street parking, it attracted strong interest from buyers in Australia, Hong Kong, the Middle East, America and Europe, and sold swiftly. “There is a clear preference at present for flawless turnkey properties like this over those requiring renovation,” says Bevan. “Overall, buyers are more reticent than they were six months ago, but particularly when faced with potential building costs.”

Bevan’s advice is to take a long-term view. “Budgetary constraints might not apply at this price point, but they do affect sentiment,” he explains. “Wealthy buyers are discriminating. They must feel it is the right time before they commit, and when they do it could be because of the currency situation, or simply because they have found their ideal property and know that standout homes in prime locations don’t come along often.”

Pictures from top: Attractive investment opportunities in London (unsplash); the spacious dining area in an Albermarle Street apartment; a classic redbrick Mayfair home on South Street; tranquil space in the capital in this Addison Road property; recently completed Finchatton house in Kensington