Savills UK | House sales over £5m in London are slowing but are still 44% higher than before the pandemic

According to an all-market analysis from Savills, a total of 89 homes worth more than £5 million changed hands in London in the first quarter of 2024, with a total value of £918 million. While this means volumes were -20% below Q1 2023, they remain 44% higher than the 62 sales recorded in Q1 2019.

On an annual basis, the year to Q1 2024 saw 504 £5m-plus sales, 352 £5m-£10m and 152 £10m-plus sales.

“The first three months of the year are generally quieter for the top end of the London market, but activity is at lower levels than during the post-pandemic recovery. Lower share levels, a weaker economic backdrop and pre-election jitters, which tend to have a greater impact on the more discretionary, very top end of the market, have all contributed,” said Frances McDonald, research director at Savills. .

“The incumbent government’s pre-emptive move to end the tax regime of non-domestic countries has also caused some foreign buyers to reconsider their decisions as they navigate the implications of the transition period. As a result, domestic and need-based buyers have played a more important role in transactions so far this year.”

Domestic buyers drive home sales

According to Savills, homes accounted for three in five transactions over £5m in the first quarter of 2024, the highest rate since the pandemic ‘race for space’ (Q1 2021). Homes represented 61% of sales over £5m, compared to 58% in Q1 2023 and 56% in Q1 2022.

The highest percentage of sales took place in Mayfair (15%), overtaking Chelsea for the number one spot for the first time since 2020, while traditional postcodes (Mayfair, Belgravia, Chelsea and Kensington) still account for more than half (52%) of sales at this price point.

“The old-fashioned postcodes in central London continue to dominate sales at the top end as, despite recent headlines, the global wealthy continue to see London as an attractive place to live. However, we have also seen a greater number of domestic buyers entering the market this year, and this has led to a rise in house sales – particularly in properties such as Hampstead, St Johns Wood and Kensington – which local buyers tend to prefer.” says Alex Christian, co-head of Savills Private Office.

“Despite the looming general election, the slim chances of a change of government mean we believe political change is already largely priced into the market. Nevertheless, the market remains price sensitive as the majority of buyers remain cautious and take a wait-and-see approach to see how the policy plays out.

“Nevertheless, we are still seeing a steady flow of interest – with the most notable demand coming from abroad in India, the Middle East and America – and some strong prices have been achieved, particularly for the best in class properties – a testament of the fact that product quality and fair prices remain crucial in this market.”