Sales of £10m-plus homes sold by Knight Frank increased by a third between January and October, according to the latest data from the agent, and were 92% higher than the same period in 2012.
KF said that a contributing factor to the increase was that vendors were dropping their prices by between 5% and 10% to secure sales ahead of the mooted Mansion Tax after next year’s general election.
“Once buyers re-priced at a more realistic level and the gap between the expectations of the vendor and the buyer closed, it triggered a flurry of activity,” said Tim Wright of KF’s prime central London team.
In June and July this year, Knight Frank sold as many £10m-plus properties as during the previous four months combined.
Richard Cutt, also in the prime central London team, said: “In the last quarter a large number of flats have been bought from plan, off market, which have moved prices up and in some cases quite significantly. These sales become public on only completion and would paint a different picture of the market if they were factored in today.”
KF said that the higher number of transactions was underpinned by strengthening demand in recent months, with Russian buyers re-emerging after a period of uncertainty and Chinese buyers increasingly active in the £10m-plus price bracket.
“The Russians are back,” said Wright. “After a period of uncertainty and instability, they appear to have more clarity on where they stand, which has given them the confidence to get back into the market.”
In the six months to October, Russian buyers accounted for 21% of super-prime sales compared with 13% over the preceding six-month period. This year also saw mainland Chinese buyers become active in the super-prime market for the first time, accounting for 3% of sales after negligible demand in previous years.
Prices of £10m-plus homes have risen by 48% since the last low-point in March 2009 but annual growth has been moderating since the double-digit rises recorded after the financial crisis, easing to 3.3% in October.
“Some buyers will remain cautious in the run-up to the general election,” said Cutt. “However, the sort of global geopolitical instability that drives capital into London and underpins demand will remain.”
