Prime Central London resi values to rise 1-2 per cent in 2021, says Beauchamp Estates
In 2021 ultra-prime residential property values for homes priced above GBP10 million in Prime Central London will rise by 1 per cent to 2 per cent and sales volumes will rise by up to 15 per cent say Beauchamp Estates as the luxury property market begins to gradually emerge and recover from the Covid-19 pandemic.
Beauchamp Estates say that there will be a gradual and cautious start to the London and Home Counties property markets in the New Year, given the Tier 3 and 4 lockdown restrictions covering the capital and South East due to the new strain of Covid-19.
Beauchamp Estates highlight that the significant lift in sales volumes should begin after May 2021 which is when the Government forecast that around a third of the UK’s 55 million population will have been vaccinated against Covid-19, and the Festive Season restrictions should help to bring the new Covid-19 strain under control.
By summer 2021 around 50 per cent of the population should be immunised, and international flights and visitors to London should also start to recover, with the vaccination of the entire UK population estimated to take up to 12 months, with ‘normality’ returning by November 2021.
During 2020, for homes priced above GBP10 million, there was a shift in sentiment for many clients of Beauchamp Estates, triggered by the pandemic, with buyers wanting large freehold houses with gym/leisure facilities and a private garden – rather than buying an apartment in a multi-unit luxury development with shared leisure facilities. In addition, rather than simply acquiring houses in addresses such as Belgravia, Kensington and St John’s Wood, buyers have begun seeking to purchase super-prime homes/estates outside of Central London.
Beauchamp Estates believe that in the GBP10 million plus market the demand for freehold/long-leasehold houses will continue during 2021 with the top locations being Belgravia, St John’s Wood, Regent’s Park, Kensington, St George’s Hill, Wentworth Estate and Englefield Green/Windsor because all are sought after addresses offering a good supply of large houses.
Beauchamp Estates say that buyers acquiring houses outside of Central London also get more living space and land for their investment. For example GBP10 million in Belgravia will provide a home of 4-5,000 sq ft in size, the same budget in St George’s Hill will provide a 12,000 sq ft house in 2.5 acres of land.
Beauchamp Estates highlight that the other big change during 2020 in the ultra-prime property market was the switch by ultra-prime buyers to private jet travel. Whilst a lot of billionaire and multi-millionaire clients have or use private jets historically many also travelled first class. The Covid-19 pandemic has put a total stop on commercial airline travel for them and all of them are now travelling by private jet and choosing to use smaller airports such as Farnborough and Northolt.
Beauchamp Estates say that this change in jet travel has shone a spotlight on ultra-prime homes with easy access to smaller private airports clients are now seeking large houses with access to places such as Farnborough and Northolt airports.
During 2020 Beauchamp Estates highlight that ultra-prime deals for Prime Central London and Home Counties residential properties priced above GBP10 million were dominated by buyers from China and Hong Kong, with the prevalence of Chinese buyers rising even higher for homes priced above GBP20 million. Other prevalent ultra-prime buyers in 2020 included Russians, domestic British and Indian purchasers.
In 2021 Beauchamp Estates believe that the dominance of Chinese and Hong Kong buyers in the ultra-prime market will continue and if Pound Sterling falls heavily in relation to the US Dollar then there will be a return of US Dollar based buyers to London, particularly Middle East (Saudi, Abu Dhabi and Kuwaiti), Singaporean and American purchasers.
Beauchamp Estates say that the summer of 2021 is likely to see the return to Central London of wealthy visitors from the Middle East – who were noticeably absent in 2020 – with some buying homes, others taking short-term lets and all spending money in the West End’s hotels, restaurants and other hospitality venues.
Beauchamp Estates highlight that despite all of the challenges and restrictions brought on by the Covid-19 pandemic, 2020 still saw some exceptional ultra-prime property deals in London and the Home Counties being agreed with buyers.
Many buyers viewed properties remotely via Zoom/Skype during the lockdown periods, and visited them physically when restrictions were lifted.
Beauchamp Estates sold a mega-mansion at 2-8a Rutland Gate in Knightsbridge for over GBP200 million to a Chinese buyer, the UK’s biggest ever deal for a luxury house; likewise they sold a townhouse in Belgravia for GBP45 million to a Hong Kong buyer, one of the biggest house deals in London during 2020; and in Surrey the agency sold Windsor Park Hall, a country mansion, for GBP21.5 million to a Russian buyer, one of the biggest property deals in Surrey in the last five years.
During 2020 all of Beauchamp Estates deals for homes priced between GBP10 million and GBP200 million were to ‘cash buyers’, with no clients requiring financial or buying-chain advice. Beauchamp Estates believe that cash buyers will continue to dominate the ultra-prime residential market during 2021.
Beauchamp Estates highlight that international buyers will continue to invest in Prime London real estate because of the capital’s status as one of the world’s most desirable cities, and in relative terms globally, buying Prime London residential property provides significantly better value compared to other prime cities around the world. Prime London residential property averages GBP1,420 per sq ft in value, compared to GBP3,410 per sq ft for Hong Kong, GBP1,860 per sq ft in New York City, GBP1,600 per sq ft in Toyko and GBP,1430 per sq ft in Geneva.
Gary Hersham, Founding Director of Beauchamp Estates says: “During 2021 ultra-prime residential property values for homes priced above GBP10 million in Prime Central London will rise by 1 per cent to 2 per cent and sales volumes will rise by up to 15 per cent as the luxury property market begins to gradually emerge and recover from the Covid-19 pandemic.”
Jeremy Gee, Managing Director of Beauchamp Estates says: “We have seen a significant shift in sentiment from many of our clients, triggered by the pandemic, and they are now seeking to buy super-prime houses/estates both inside and outside of London in preference to lateral apartments within super-prime apartment buildings.”
Marcus O’ Brien, Head of Beauchamp Estates Private Office, says: “The ultra-prime residential property markets in London and the Home Counties remained extremely resilient during 2020 with the luxury market rebounding strongly after the first lockdown. Some exceptional deals above GBP10 million were done during 2020 with Chinese, Hong Kong and Russian buyers being particularly prevalent in the market.”