Overseas buyers spent nearly $4 billion on luxury homes in London last year, with Russian, French and Chinese buyers particularly active, attracted by the weak pound and the dusty conclusion of Britain’s withdrawal from the European Union.
New figures from real estate broker Knight Frank show that the super-rich bought more homes in London last year than in any other city in the world, with buyers attracted by the weak pound and the fallout from Britain’s exit drama from the European Union.
Buyers from around the world spent nearly $4 billion on super-luxury homes – defined as properties priced at $10 million and above – in the British capital.
That’s more than buyers spent on super-luxury homes in any other city combined last year, according to Knight Frank, giving London a run for its money over Hong Kong and New York.
Despite travel restrictions and a virtual lockdown of the U.K. housing market between March and May 2020, sales of luxury homes in London above $10 million increased last year compared to 2019, with Russian, French and Chinese buyers being particularly active.
The influx of overseas money comes as many Londoners look to the suburbs and countryside, seeking to live more spaciously in an era of home-based offices.
“The story throughout last year was people moving out of the city. But there are some big home purchase deals happening quietly.” said Liam Bailey, head of global research at Knight Frank.
A total of 201 super luxury homes were sold in London last year, at an average price of $18.6 million. In 31 of those deals, buyers paid $25 million or more for their homes.
The Financial Times reported last month that one of the biggest home purchase deals last year was the purchase of a mansion in London’s Belgravia by British industrialist Sanjeev Gupta for 42 million pounds.
Buyers of $10 million plus luxury homes in London and elsewhere are a small, international group, and the factors that stimulate and discourage them from buying are quite different from those that shape the mainstream housing market.
For them, the relative attractiveness of a city’s tax system and the security of the place as a depository of wealth are as important as the livability of the place.
Despite the outbreak of the new crown epidemic, buyers in the 12 cities monitored by Knight Frank spent a total of $19 billion on super-luxury homes last year, only 5 percent less than in 2019.
Bailey said the completion of the U.K.’s exit negotiations from the European Union, coupled with the fact that average house prices in London’s most expensive locations (in terms of zip codes) are down about 20 percent from their 2015 peak, have bolstered London’s appeal.
Another major factor driving strong sales is the cheaper pound relative to the dollar and euro, he added.
Super luxury home sales in New York fell 48 percent last year, with affluent buyers looking to sunnier U.S. coastal cities such as Palm Beach, Los Angeles and Miami.
Super luxury home sales in Hong Kong fell 27 percent amid political uncertainty and tough anti-epidemic measures hitting the city, Bailey said. The city topped the list in 2018 and 2019 for luxury home sales over $10 million.
“Having a residence in London is still a status symbol, even if you don’t live there for months at a time. If you are super-rich, you will have a plane, a helicopter, a superyacht, and your residence in London.” says Nathalie Hirst, a home-buying agent who specializes in London. Some of her clients are scouting for luxury homes in London with budgets of £100 million.
“I have heard some clients predict a dismal outlook and predict the end of days, but the property market has held on.” She said.
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