London’s prime market shows ‘resilience’ as demand grows

Buyer demand for homes in London’s high-end housing market has risen, new figures show, with agents hailing it a promising sign.

There was a 2.5% increase in demand for the capital’s prime homes – those priced between £2m and £10m – in the second quarter of this year.

Demand in the super prime market – that is, homes worth £10m and more – increased by 1.9% in the same period.

The Prime London Demand Index by Benham and Reeves reveals that despite this quarterly rise, demand in the prime market is actually 2% lower than in Q2 2022.

The Prime London Demand Index reveals Islington was the capital’s hotspot, with half of homes listed for sale between £2m and £10m already sold subject to contract in Q2. Richmond and Chiswick also saw high demand for prime properties.

Wapping saw the biggest quarterly and annual rises. Demand for prime property there was 12.2% up from Q1 and 23.3% up from Q2 2022.

Large quarterly upturns were also seen in Canary Wharf, up 12%, and Chiswick, up 11.2%, while the second and third biggest annual increases were in Richmond and Islington.

In the super prime market, 8.9% of homes listed for sale have been snapped up in Q2, with demand for London’s most expensive homes rising by 1.7% over the past year.

In Pimlico and Wimbledon, half of homes listed above £10m have already sold. Demand is also high in Holland Park, sitting at 13%.

Wimbledon saw the biggest quarterly increase in demand (50%), followed by Pimlico and Victoria.

Annually, Pimlico saw a 50% increase in buyer demand, with Wimbledon and Holland Park making up the top three.

Marc von Grundherr, director of Benham and Reeves, said: “We saw a dip in high-end homebuyer demand during the first quarter of this year but it certainly seems as though the prime London market has now found its feet and we’re starting to see the strong interest shown in recent months convert to actual transactions.

“While some of the prime market’s more peripheral neighbourhoods remain the destination of choice for many, it’s great to see central locations such as Wapping, Canary Wharf and Pimlico also leading the charge.

“This demonstrates that the tide has very much turned and buyers are now looking from the outside in which should help drive the market forward over the year ahead.”

Meanwhile, Knight Frank unveiled new data about the prime London market. It said the ‘air continued to slowly come out of the prime London property market in June’, but said the changes were ‘not dramatic’ given the resilient nature of the market.

Its figures showed the number of new prospective buyers in London in June was 24% above the five-year average.

Tom Bill, head of UK residential research at Knight Frank, said: “Mortgage costs have spiked and speculation around falling prices has mounted but has there been any impact on the prime London market over the last month?

“Yes, but not a particularly dramatic one. The economic mood has darkened but the market is far from grinding to a halt. The number of new prospective buyers in London over the most recent four-week period was 24% above the five-year average.”

He added the resilience is ‘no surprise’ given that around half of sales in zone one are in cash.

“The market will also be supported by greater levels of affluence, the relatively weak pound (depending on your timing) and the fact overseas travel is returning to pre-Covid levels,” said Bill.

“Higher price-brackets have certainly proven more robust as activity tends to be less reliant on mortgage debt, as the chart shows. And overall, activity in London is stronger than outside the capital, where there is a less discernible post-pandemic economic bounce.”