Property prices catching up to pre-pandemic levels

  • August 17, 2022
  • 3 min read
Property prices catching up to pre-pandemic levels

London properties worth £1 million or more continue to make a comeback as the world recovers from the pandemic. Prices have also risen in areas around central London, including Richmond and Wandsworth, as house prices go up and discounts go down.

This has created an opportunity for those looking to buy closer to the centre as some areas are “pretty cheap” compared with their “historic levels,” according to Coutts. Knightsbridge and Belgravia are both 17 percent below their peak in 2014, for example.

That may not last long, however, as many UK property agents predict strong growth in the capital’s luxury housing market, later in the year.

“The market for properties worth £1 million or more in London is well and truly on the rebound,” Peter Flavel, CEO, Coutts, says, “having been in the doldrums over recent years. Prices are up, with new records set in some areas, and the amount buyers are getting off the asking price is dropping. Kensington, Notting Hill and Holland Park have been the most active in the over £10m price bracket, while King’s Cross and Islington have seen rises of 12 per cent over the last 12 months.”

The pandemic, Flavel says, has forced many to “rethink what they want” as people look for “more space, a bigger garden, and a home office.” This has forced many to move a little further out, increasing demand in those areas. 

Meanwhile, the market for homes worth £10 million or more, known as super prime properties has “skyrocketed.” Sales have doubled in 2021 compared to the previous year, and the period from October to December, saw the highest number sold in any three-month period since 2016.

“There appears to be a sense of opportunity as super prime buyers take advantage of a central London market that’s had pretty stagnant growth for a number of years,” Katherine O’Shea, Director, Coutts Real Estate Investment Service, says. “For many investors there’s a desire to put funds into assets they can enjoy; for others it’s simply about investing in real assets that appear cheap compared to historic prices.”

The figures and analysis on luxury London property comes from a review of the market, the Coutts London Prime Property Index, which reveals overall trends and what’s happening “area-by-area.”

It found that prime property prices increased by 3 percent, bringing annual house price growth to 5 percent, driven mainly by areas such as Richmond and Wandsworth. It also found that prices are still low historically, currently being 8 percent below the peak level in 2014. Super prime property prices however have risen by 11 percent in the last year.

More than a third of high-end London property is being sold at a discount, and the number of properties for sale has dropped 17 percent over the previous year, with new listings being down 12 percent.

This means that the difference between central and outer parts of London has shrunk dramatically, as central prices are only 58 percent higher, compared with four years ago when they were 70 percent more expensive.

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