The number of sales of properties worth more than £1 million was 56 per cent higher than levels expected for October, new data reveals.
Even when the property market reopened in May 2020, the luxury sector remained subdued with overseas buyers unable to view prospective homes in person. As a result some prices were slashed by 20 to 30 per cent at the height of the pandemic, according to agents.
The analysis by Savills, exclusive to Homes & Property, reveals that the total value of homes worth more than £5 million exceeded £589 million last month, which was 80 per cent higher than in September and 29 per cent higher than in October 2020. Even though the UK was not in lockdown this time last year, travel was very limited due to Covid-19 restrictions.
“Overall, there have been 398 sales worth more than £5 million-plus across London in the year to October, with a combined value of more than £4.1 billion. This is the highest annual total since 2014 both in volume and value terms,” says Savills analyst Frances Clacy.
Luxury house prices start to recover
The super-luxury £10 million plus end of the market was the busiest it has been since July 2013 – which was the height of the last peak in central London.
The stamp duty system overhaul seven years ago saw rates hiked for homes priced above £1 million which dampened an over-heating section of the property market. This move, in combination with Brexit-fueled political uncertainty, quashed sales in luxury London. This trend is now reversing, according to Clacy.
“After seven years of falling values, property in prime central London is overdue a recovery. We’ve already seen the beginning of this, primarily driven by demand for larger houses and, as such, in locations such as Notting Hill and Holland Park,” says Clacy.
The number of sales agreed in London in the price band between £500,000 and £1 million was also up 40 per cent above normal levels for October, the analysis showed. Clacy puts this down to the swell in demand for family-sized homes following the first lockdown, stoked by the stamp duty holiday which wiped £15,000 off moving costs for those shopping in this bracket.
Savills predicts a 23.9 per cent house price rise for homes in prime central London – these are properties in the top five to 10 per cent of the market by price.
London bucks the national trend
This data was published at the same time as the national transaction numbers from HMRC, which showed sales slowing elsewhere in the UK. According to the Government department, UK house sales tumbled 52 per cent in the month after the stamp duty deadline making this October the quietest in almost a decade.
“The stamp duty holiday very much shapes today’s figures. We saw a slower market in October when compared with the volume of transactions in September when buyers were acting at breakneck speed to capitalise on the tax break before it finished,” says Nick Leeming, chairman of Jackson-Stops.
“Heading into the final weeks of 2021, the market will slow in line with winding down for the festive period,” he adds.