Luxury Portfolio

Global Market Guide (Video): London, England


As a world leader in the arts, business and finance, London is one of the most influential cities in Europe. The luxury real estate market in the area has recently begun to recover after having a challenging 18 months following the announcement of Brexit. In this month’s Global Market Guide, we take an inside look at the current state and predicted future of the luxury real estate market in London.

CURRENT HOUSING MARKET

Recently, the housing market has started to recover after having a challenging 18 months due to stamp duty increases and Brexit. Prices have fallen between 10-20% in the market which has created opportunities for foreign buyers to take advantage of the low prices in the market. Since Brexit, an influx of dollar and euro buyers have started to invest in the London market because they can purchase houses and apartments for a cheaper price due to the currency change. While London was once a place that was unattainable for many luxury buyers, the city is now affordable to many for the first time in years.

LUXURY BUYERS

About 60% of buyers in the UK are natives, however London has recently seen an influx of buyers from China and a small number of Americans. Many of London’s luxury buyers are the children of affluent individuals, often first-generation Chinese or Middle Eastern buyers between twenty and thirty years old. A new concept which has recently garnered a lot of interest, is that of luxury apartment buildings that are serviced by high-end hotels which provide the concierge services these buyers are seeking. For example, there is a remarkable new development in super prime London at 20 Grove and a Square which includes 27 luxury apartments affiliated to the Four Seasons which has already sold both penthouses in excess of £50 million each.

NEW CONSTRUCTION

Although political change is evident, new construction in London continues despite the actions of the government. Most luxury buyers, particularly buyers from the far east, will invest in new developments if they feel that it is a secure investment. Historically, there have been a few failed completions where buyers have walked away from their 10-20% deposit because they didn’t feel comfortable about the current state of the market in the UK. Despite these rare occurrences and the recent economic challenges of Brexit, the UK remains a secure place to invest in real estate and the future for purchasing in the area looks promising. 

5 YEAR PREDICTION

Although the last 18 months have been uncertain in terms of pricing for houses and apartments, there will always be a high demand for beautiful properties in prime locations. Prices are predicted to stabilize over the next year followed by a gradual increase over the next 5 years. The UK remains a destination of choice for a lot of the international community which remains a very important factor in where investors decide to buy real estate.

Although the UK has seen some challenges following Brexit such as a decline in home sales, growth looks promising. The city remains a top destination for real estate investment in the international community due to its security and overall quality of life.

The video for this Global Market Guide was filmed at the 2017 Leading Real Estate Companies of the World® Global Symposium, an annual conference organized to bring together our global members and gain insights into the global marketplace.

Special thanks to our member Strutt and Parker for providing their insights about the luxury real estate market in London.

For more information on properties in London, browse here.