In early 2020, the pandemic and subsequent lockdown reduced activity in the London property market. There was an initial seven-week period of inactivity as restrictions on viewings and travel took hold, and owners were reluctant to buy or sell as they came to terms with the global health emergency.
However, according to Savills, once the first lockdown was lifted in May 2020, the UK prime residential property market – overall the largest 5-10% of the market by value – then saw an exceptional level of activity. . In October 2020, there were £20bn in monthly mortgage approvals as demand for new homes increased as buyers and sellers reassessed their housing and lifestyle needs. Large country houses and London properties with outdoor space were in particular demand.
As 2021 progressed and the benefits of the UK’s leading vaccination program became evident, there was a substantial increase in international HNW investment for prime residential homes and apartments in London, as well than a continuing interest in country houses. With travel restrictions easing, vaccination programs taking effect across the globe, the British pound remaining subdued against the US dollar and pent-up demand from buyers in the Far East, Gulf and United States translating into deals, we expect sustained and strong interest in London.
Our foreign clients who were unable to travel here tell us that their appetite for London remains strong. Some have made difficult trips especially to see, others have purchased virtual tours and many plan to come as soon as their national restrictions are relaxed.
A common trend we’ve witnessed is that clients stay focused on finding the best opportunities. Quality, privacy, convenience and convenience are more important to them than price. These are purchases that must work well for families in the new world of living with Covid, where lifestyle trumps harsh “pounds per square foot” thinking.
Knight Frank predicts a 5% increase in prime prices in central London by the end of 2021, and prime London is expected to outperform the wider UK property market over the next five years.
It’s more important than ever for buyers and sellers to have the right team of professionals on hand to act on. Prompt, competent, trustworthy, thorough and pragmatic legal advice is essential to the commercial success of a prime residential real estate transaction in a strong and competitive market.