Sales of £10m+ homes plunge 86% in a year
Uncertainty following the Brexit vote and rising taxes have taken their toll on the super-prime property market, according to LCP.
What’s the latest?
Sales of ‘super-prime’ homes have plunged by a staggering 86% over the past year ALONE.
A minuscule FIVE £10m+ properties were sold during the three months to August compared with 35 in the same three months in 2015.
Furthermore, the average price paid for the five most expensive property sales fell by 25% from £22m to £16.3m, according to London Central Portfolio’s (LCP) analysis of Land Registry data.
Why is this happening?
LCP pointed the finger at uncertainty following the EU referendum and rising property taxes (changes made in 2014 to the way Stamp Duty was charged meant purchasers of homes costing more than £937,000 would pay more).
And LCP said a simple 'price correction' of these super homes was also inevitable.
Above: six-bedroom property for sale on Chesterfield Hill, W1.
Who does it affect?
Super-prime homeowners outside of central London have felt the impact most acutely. Over the last three months, not a single property sale above £10m took place outside the capital’s most desirable postcodes. This compares to last year when homes of this value accounted for almost a third (30%) of all sales.
Sounds interesting. What’s the background?
Sales of super-prime new-build homes also collapsed as buyers focused on older, re-sale properties. No new-build homes worth £10m or more were sold during the summer, compared with last year when they made up 23% of sales.
And, developers are now dividing up large, expensive property into smaller flats to increase their appeal.
Naomi Heaton, chieif executive of LCP said: “While the long-term outlook remains compelling as a global destination with limited stock available, the luxury market is likely to experience continued instability."
She added this was especially the case as many non-doms will become liable for UK inheritance tax on their overseas assets from April next year, under changes announced by the Government in 2015.
“Just as we have seen in the past, it may take some years to correct, with prices recalibrating themselves before growth returns," she said.
5 most expensive property sales between June and August
1. 112 Eaton Square, Westminster, SW1: £25m
2. 6 Grosvenor Gardens, Westminster, SW1: £16.9m
3. 79 Grosvenor Street, Westminster, W1: £16m
4. 11 Chelsea Square, Kensington & Chelsea, SW3: £13m
5. 32 Thurloe Square, Kensington & Chelsea, SW7: £10.2m
Top 3 takeaways
- Sales of super-prime homes worth £10m or more have tumbled by 86% over the past year.
- Just five £10m+ homes were sold during the summer compared with 35 in the same three months last year.
- The average price paid for the five most expensive properties has fallen by 25% from £22m to £16.3m.