Pent-up demand has helped stabilise London's super-prime property market – but that still hasn't stopped parts of the capital experiencing double-digit declines.
Chelsea has endured the steepest drops in prices of £10m-plus homes according to Knight Frank, down 15.5 per cent between August 2015, when the market peaked, and March this year.
But there are signs that the top end of the market is coming back: although the number of transactions in the year to March was nine per cent lower than the figure of 126 recorded over the previous 12 months, that is an improvement compared to annual falls of more than 20 per cent registered throughout 2016 and the first half of 2017
Knight Frank puts this return in activity down to a combination of buyers making the most of lower prices, and the impact of the weaker pound. Buyers using dollars, for example, have benefited from an effective 11 per cent discount at the end of March compared to the period before the EU referendum.
As a result, the number of new prospective super-prime buyers registering in the first three months of 2018 was seven per cent higher than last year.
Paddy Dring, head of global prime sales at Knight Frank, said: “Though London has had a tough time recently, it is seeing renewed vigour. The effective discount provided by a weaker pound has certainly helped some buyers seeking value.
"There is a continued focus on safe haven investments for the long term with increasing focus on income generation and longer-term returns. Although political risk remains with us, economic fundamentals underpinning the market remain strong, with interest rates at an all-time low and global economic growth improving.”
Thomas van Straubenzee, head of Knight Frank’s Private Office, added: “Family houses in the Royal Borough of Kensington and Chelsea are in relatively strong demand at the start of 2018 among needs-driven buyers.
"While international investors are proceeding with more caution, British families committed to London are more comfortable buying given that pricing has largely adjusted for stamp duty. It means areas like Notting Hill have done very well at the start of 2018.”