The capital city’s super-top-end property transactions rose by 30% last year, and that is likely to continue in 2023.
Multi-millionaires and billionaires are swooping in mainly from America but there are also those from Europe, India and the Middle East. The American buyers are clearly investing because of the strength of the US Dollar against the Pound sterling giving them an effective 30% discount on their purchases in London.
The facts speak for themselves in that over a two-year period there has been a total of 92 sales for luxury properties priced over £15 million with 52 sales in 2022 compared to 40 in 2021 (17 in 2020)
Beauchamp Estates estimate that during 2022, 50% of the deals in Prime Central London for homes valued over £15 million had been to American buyers, purchasing around £620 million worth of luxury property; with Swiss, French, Indian and Middle East buyers being the other key purchasers of luxury homes in London during the last 12 months. Rising interest rates have increased cash purchases by over 60% for those transactions over £15 million. This is a significant shift from 2021 and 2020 when the majority of deals were funded by the beneficial “ interest-only super-prime mortgages”.
The 2022 edition of the annual Billionaire Buyers in London survey by Beauchamp Estates has looked at sales of luxury residential properties valued over £15 million between January 2022 and December 2022, compared to 2021 and 2020, analysing deals data from LONRES, combined with wealth data from Credit Suisse and Forbes, as well as the agency’s own in-house deals data and local market intelligence.
Private cinema
The survey shows that between January 2021 and December 2022 over £1.97 billion worth of property was sold. In summary that is £1.23 billion in 2022, £778 million in 2021 and £553 million is 2020. So, in just three years London’s billionaire deals market has more than doubled in size.
Over the last two years London’s super-rich homes deals have achieved £3,259 per sq ft on average with the highest in 2022 hitting £10,000 per sq ft in Belgravia.
Newly built or newly refurbished turn-key homes with the benefits of concierge and general amenities brings a significant price premium. That means, on average, achieving values of £6,666 per sq ft.
There have been 36 mansions or town houses, priced at over £15 million in PCL, sold in 2022. That’s compared to 11 in 2020.
A billionaire’s house typically consists of seven bedrooms, a private cinema, swimming pool and large gardens over 9,000sq ft.
Ultra-prime apartments and penthouses are equally attractive to buyers and sales have risen in this sector here too. The selling points here are over 6,000sq ft, four bedrooms and a large balcony or a private roof terrace as an added selling point.
Stable asset
The SW1 postcode (Belgravia/Knightsbridge) remains as London’s top address for ultra-prime sales, followed by the W1 postcode (Mayfair) with 15 deals (up from 11 in 2021).
Beauchamp Estates say global uncertainty and the underperformance of alternative investments has driven many multi-millionaires and billionaires to return to investing in London real estate as a proven safe haven and stable asset class. Therefore, despite the drop in billionaire wealth, London has bucked the trend. The UK now has 177 billionaires, up six from 2021, they have a combined fortune of £653 billion, with 120 owning one or more homes in London. The prediction is that in 2023 PCL values will either remain flat, or rise slightly by 1% or 2%, a result of global economic slowdown and rising interest rates. Beauchamp Estates are forecasting that during 2023 the volume of deals for homes priced above £15 million is likely to rise by 30% compared to 2022, driven by wealth creation in three locations – the USA, Europe and the Middle East.
