Cash remains the dominant force in London's luxury housing market
Activity in the high-end real estate market of Prime London continues to exhibit considerable resilience, thanks to buyers with substantial cash reserves sustaining transaction levels.
Activity in the high-end real estate market of Prime London continues to exhibit considerable resilience, thanks to buyers with substantial cash reserves sustaining transaction levels.
£5 million market making waves
During the initial nine months of the year leading up to September, there were a total of 390 property sales valued at £5 million and above in the capital.
The transaction count showed a decrease compared to the 459 transactions in the equivalent period of 2022, which marked a record year for the high-end market. However, it remained 67% higher than the average over the three years leading up to 2019, before the pandemic.
£10 million market up from pre-pandemic average
These statistics encompassed 120 properties valued at £10 million or more, representing a 50% increase compared to the pre-pandemic average.
The findings also revealed that Chelsea, Kensington, and Belgravia collectively contributed to one-third of the sales of properties valued at £5 million or above.
Sales activity
In the high-end real estate market, the cumulative sales amounted to £4.3 billion within the first nine months, with the third quarter contributing £1.7 billion in property transactions, signifying a modest increase in sales activity compared to the rest of the year.
Cash buyers reign supreme
Muhib Meah, who serves as the Sales Director at Victorstone, noted, "The upswing in this price bracket is primarily driven by cash buyers." He further highlighted that high-net-worth purchasers had reverted to their traditional inclination for cash transactions, a preference that briefly shifted to very low-rate mortgages during the COVID-19 pandemic.
"The apartment market is primarily characterised by international cash transactions, often involving buyers making their initial London acquisition. In contrast, houses tend to be acquired by UK-based buyers or individuals from around the globe who have established a firm presence in London. Typically, the latter group makes their second or third property purchase as their family requirements evolve." he noted.
Muhib pointed out that North American buyers, capitalising on the robust dollar, had played a pivotal role in supporting the high-end market this year.
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