Bargains for Rich as Costliest London Homes Get Cheaper

Updated on

Britain’s most expensive homes got cheaper this year as more central London mansions and super-prime apartments sported “for sale” signs.

The average value of homes sold for at least 10 million pounds ($16 million) in London’s most expensive neighborhoods was 2,757 pounds a square foot in the first eight months, according to broker Huntly Hooper Ltd. That was 7.4 percent lower than the record of 2,978 pounds set in 2013. Prices for other homes in the area known as prime central London increased.

“Whilst there are record sales being achieved, buyers should not be swayed by headlines suggesting there is a boom in average pricing,” Huntly Hooper director Oliver Hooper said in the statement.

More homes for sale in the Notting Hill and Holland Park neighborhoods have climbed into the top tier of London pricing, giving buyers more choice. Prices for super-prime properties have increased by at least 13 percentage points less than every other part of the prime central London market since 2009, Huntly Hooper said.

Apartments in the top category fared the worst, with a 9 percent decline to an average of 3,565 pounds a square foot (38,370 pounds a square meter) compared with the average value last year. Super-prime house prices dropped 6.3 percent to 2,458 pounds a square foot. There were 66 transactions this year through August compared with 92 for all of last year.

Huntly Hooper, based in the Knightsbridge neighborhood, defines prime central London as 11 postal districts that include Mayfair, Chelsea and Holland Park and Knightsbridge itself.

More Choice

The number of central-London homes offered for sale for more than 10 million pounds increased by 165 percent from 2009 to 2013, according to the report.

Possible tax increases on expensive homes, such as the Labour Party’s planned “mansion tax,” haven’t diminished demand in the market based on the number of sales, the report said. The opposition party plans to raise 1.2 billion pounds from a tax on homes valued at more than 2 million pounds if it gets into power after next year’s national election.

The mansion tax may still have an impact on the central London housing market, Charles Puxley, a Chelsea-based broker at Jackson-Stops & Staff said in an Oct. 9 Royal Institution of Chartered Surveyors residential market survey.

Fewer new homes than normal were offered for sale in September “and there is notably very little activity at just over the 2-million-pound mark,” he said. “Mansion tax seems to be a real worry; it will decimate London prices.”

Average home values in all of London rose about 0.1 percent in the three months through September from the previous quarter, broker Douglas & Gordon Ltd. said in a report today.

“Persuading a buyer to spend rather than just look is proving more difficult than it has for at least five years,” for homes costing more than two million pounds, sales director George Franks said in the report.

(Adds home value growth in final paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE