The Resilience of London's Prime Residential Market

London's prestigious housing market has always been a magnet for properties valued at over £5 million. Even in the second quarter of 2024, this market demonstrated resilience and strong performance. This particular segment of the London real estate market continues to captivate many investors and high-end buyers. However, understanding the dynamics behind this resilience and the potential future scenarios is key to crafting a successful investment strategy.

London’s Performance in Q2 2024

The second quarter of 2024 was an intriguing period for the housing market across London, particularly for properties valued at over £5 million. A total of 120 transactions took place, amounting to a combined value of £1.27 billion. These figures indicate a 38% increase compared to pre-pandemic averages. However, there was a 15% decline compared to the same period in 2023, indicating that while the market remains robust, it is experiencing some fluctuations.

Similarly, properties valued at over £10 million showed a comparable trend. In Q2 2024, 38 transactions were completed, reflecting an 18% increase compared to pre-pandemic levels. However, there was a 10% decrease compared to the same period in 2023. These data points suggest that even the high-value property market remains resilient in the face of certain uncertainties but with a more cautious approach than in the past.

A Cautious Approach and Its Impact on Sales

Despite some uncertainties, London's prime residential market has managed to perform strongly. Changes in the current informal regime and the upcoming general elections may have caused some buyers to hesitate. However, the desire to own a property in one of London’s prestigious postcodes has kept this segment resilient. Particularly in the most attractive areas of London, properties continue to experience stronger demand compared to pre-pandemic levels.

At this point, both UK citizens and foreign buyers who do not reside in the UK are keeping this market alive. Despite being directly affected by changes in non-resident taxation policies, foreign investors continue to invest in high-value properties in London. This fact once again highlights London’s significance in the global real estate market.

Trends Behind the Data

Looking at the first half of 2024, Belgravia accounted for the largest proportion (15%) of sales over £5 million. This proportion was 9% in the previous three years and has become more attractive, especially for younger buyers, as investments in the area have increased. Belgravia is traditionally known as one of London’s most prestigious areas, and this trend shows that the area continues to maintain this status.

Additionally, traditional prime addresses such as Kensington (14%), Mayfair (11%), and Chelsea (10%) continue to see high demand. With domestic demand increasing, sales of properties over £5 million accounted for 64% of total activity in the first half of 2024. In these areas, particularly Kensington and Chelsea, known for their larger family homes, continue to attract the interest of investors and buyers.

Future Outlook and Investment Opportunities

As Q2 2024 comes to an end, the future holds both uncertainties and opportunities for London’s prime residential market. It remains unclear what policies and proposals the new government will introduce. However, a positive public sentiment is expected after the general elections, which could create new momentum in the market and potentially increase demand for prime properties.

Conclusion

London's prime residential market for properties valued at over £5 million showed strong and resilient performance in Q2 2024. This segment of the market continues to attract interest from both domestic and international buyers despite certain uncertainties. While future developments will depend on new government policies and global economic conditions, London’s prime residential market continues to offer significant opportunities for investors.

Explore projects in London’s most prestigious areas by visiting our London Projects page. To schedule a meeting about your future profitable investments, contact us today.

Source: Savills UK