The number of £10m-plus London homes sold by upmarket estate agent Knight Frank has leapt by a third this year as rich Russian and Chinese buyers invested in the capital’s “super-prime” property market.
The data provides fresh evidence that while the wider London market has been in the grip of a pronounced slowdown, the luxury end of the sector is thriving - and that wealthy international buyers are apparently undeterred by Ed Miliband’s proposed mansion tax.
However, Knight Frank insisted these properties were not just being bought by ultra-high net worth individuals looking for a safe haven for some of their investment cash. It said Chinese buyers were favouring houses rather than flats and investment properties, suggesting they intended to spend time living in them with their families.
Knight Frank’s figures compared the first 10 months of this year with the same period in 2014. It also revealed that the number of homes costing £10m or more sold by the firm during the period was 92% higher than in 2012.
The firm said this might seem “counter-intuitive” at a time of intense debate about Labour’s plans for a mansion tax on properties worth more than £2m to help fund the NHS, which had resulted in more subdued demand. However, the flurry of sales was in part due to sellersknocking between 5% and 10% off their asking prices in order to achieve a sale, it added.
At the same time, a sizeable number of luxury flats have been sold off-plan and “off market” in recent months, which has pushed prices up. In late September it emerged that a luxury housing development with views of Buckingham Palace had broken the price record for properties in Mayfair. British Land said it had sold 18 of 34 flats in its super-prime Clarges Mayfair development for an average of £11.6m each, even though work on the site only began this year.
In the six months to October, Russian buyers accounted for 21% of super-prime sales compared to 13% over the preceding six-month period, said Tim Wright at Knight Frank. This was also the year that mainland Chinese purchasers became active in the super-prime market for the first time, accounting for 3% of sales after negligible demand in previous years, he added.
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