Savills: Price-sensitive buyers returning to ‘best in class’ £5m-plus homes

London’s £5m-plus residential market is back in business after a slow first quarter, according to new analysis from Savills.

The agent does give a note of caution though, warning that buyers remain price sensitive and focused on best in class properties and addresses.

Across the market, 132 properties worth in excess of £5m changed hands in the three months to the end of June 2023, up from 108 in the first quarter of the year - a total of 240 in the first half of the year, according to Savills.

While this marks a 21% fall compared to first half year sales in 2022, it is on par with the same period in 2021 and 45% above the half-year average of just 166 for the three years between 2017 and 2019 pre-pandemic. 

There have been 65 sales year to date at the more rarefied £10m-plus end of the market.

This is marginally higher than the 63 in 2021 and 17% above the 2017-2019 half-year average.

It is still below the same period in 2022 when 91 transacted.

Frances McDonald, director of Savills residential research, said: “The first quarter marked a slowdown after an intense period of activity from mid-2021 as buyers refocused on city life.

“These latest quarterly figures underscore the remarkable resilience that we have seen in our prime central London index, which fell a marginal 0.9% year on year. 

“However, a backdrop of unsettling domestic and international economic indicators means that even the cash-driven very top end of the market is price sensitive, particularly given its discretionary nature. Momentum will only be maintained if buyers and sellers remain aligned in their expectations.”

In value terms, over £2.4 billion worth of £5 million-plus  properties have transacted year to date, according to the Savills data.  At the same time last year, that figure stood at £3.1 billion. 

There has also been a shift in the mix of properties selling, Savills reports.  Apartments continue to account for a growing share of sales as pandemic memories fade, accounting for 44% of £5m-plus transactions across London year to date, up from 40% last year and just 28% in 2021. 

McDonald added: “To an extent this reflects the completion of a number of world class new build schemes, and buyers focused on turnkey properties, but it also marks a clear shift away from a time when larger homes with private outdoor space topped every buyer’s wish list.”