London house prices: This is how frenzied demand for London’s super prime homes became between 2007 and 2014
London's super-prime residential market may have cooled somewhat over the last year since tougher stamp duty rules came into force earlier the year.
But new research seen today by City PM reveals just how frenzied the sales of £10m-plus homes in the capital’s golden postcodes surrounding Hyde Park has become since the financial crisis.
Read more: The London postcode where luxury homes have been slashed to bargain basement prices
Knight Frank’s latest report shows a 63 per cent leap in the rate of annual super-prime transactions between 2007 and 2014.
The figure has been adjusted to take into account house price inflation, with a £10m home today costing around £6.1m in 2007 and around £7.8m in 2010.
The type of property that was traditionally considered super-prime has also changed. Up until 10 years ago, these would have mainly referred to period townhouses or flats within converted period buildings in Mayfair, Chelsea, Kensington and Knightsbridge.
Now it also includes the rising number of new-build developments sprouting up outside of these addresses in areas including Marylebone and Regent’s Park.
Over the 24 months to August 2015, price growth in Marylebone totalled 14 per cent thanks to a surge in demand in the area compared with 10 per cent in prime central London as a whole, and eight per cent and four per cent in Mayfair and Knightsbridge, respectively.
Knight Frank partner Ian Pidgeon, said: “There has been a recent shift in the attitudes of buyers traditionally interested in these areas, with the emergence of wealthy individuals placing greater importance on design, uncompromising layouts and amenities.”
“More so than ever we are seeing buyers gravitate to the new development market, drawn to homes which have been designed with a forensic level of thought, research and detail – a compelling combination which is rivalling the more traditional period properties which these areas were previously renowned for.”
Some of London’s most exclusive flats recently up for sale include British Land’s Clarges development in Mayfair overlooking Green Park. The property company sold 18 flats in September last year at an average £4,750 per square feet, with four flats breaking the £5,000 sq ft mark, which implied a sale price in excess of £25m.
Knight Frank said activity in the super-prime market was robust for much of 2014, with the number of sales nearly double that in 2012. However sales activity began to slow at the end of last year, as uncertainty in the run-up to general election and fears over Labour’s mansion tax set in.
Since then the market, at least for prime central London, has been further hit by the higher stamp duty rate levied on £1.5m homes, which was raised to 12 per cent at the end of last year.
The number of transactions for £3.3m-plus homes has fallen by 25 per cent in the first seven months of 2015 compared with a year earlier, according to separate figures by Knight Frank. The estate agents said it is still crunching the numbers on super-prime transactions for 2015.