London's luxury property market surges as Covid drives wealthy buyers to seek bigger houses for working from home

The London market for high end properties has surged as the capital’s high rollers seek bigger properties with gardens to make working from home more comfortable.

Savills data analysis shows the number of £1 million-plus sales in London last week were up 40% on June last year, with £2 million-plus sales up 10%.

Knight Frank figures compiled for the Evening Standard showed the number of new buyers looking for £3 million-plus homes was up 53% since lockdown ended on 23 May compared with the five year average for the time of year.

Fearing potential second waves of covid-19 and with expectations that working from home will be the new normal for at least part of the week, the capital’s wealthy are trading in luxury flats in North and central London for big houses in leafy Barnes, Wimbledon, Richmond, Chiswick and Fulham.

“My phone is red hot,” said Jonathan Hewlett, head of Savills “prime London” team. “Buyers are out and about, and there’s a trend of North of the River to South and South to the countryside.”

He explained that some people in the leafier parts of South West London were heading “down the A3 and M4” to Surrey, Hertfordshire and Berkshire to buy second homes for future lockdowns.

The three lockdown drivers motivating people to buy were outside space and proximity to parks, large office rooms and strong, good wi-fi.

The luxury homes market was taking off before covid with the decisive trouncing of Labour in the General Election – the so-called “Boris bounce”. But that was put on ice with covid, and has now led to huge pent up demand as the desire for comfort trumped fears over the economy.

“It’s a strong market,” Hewlett said. “But prices are still below levels of 2014, so there is still value even though prices only fell about 1% during the lockdown.”

Agents say buyers thinking they are being cunning by “chipping” down prices after agreeing a deal are finding themselves having to pay more as sellers pull out, go back out to the market and find queues of buyers.

Prices of luxury houses have not shot up despite the increase of demand, agents say. Flats, on the other hand, have fallen in value by up to 10% in what agents are calling “covid cuts”.

One Barnes-based executive who has just sold his house for £4.5 million said: “It was unbelievable, we had people biting our hand off in double-quick time.”

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