Posh Property Buyers stand back as prime London cools

An index of prime London properties suggests buyers standing back as economic uncertainty reaches the upper levels of the market.

The Prime London Demand Index by Benham and Reeves monitors demand for London’s most expensive properties based on the level of market activity seen between the £2m to £10m threshold and the super prime market of £10m+. Demand is based on the proportion of all homes listed for sale across the prime market that have already been sold subject to contract. 

The latest figures show that buyer demand across London’s core prime market for Q3 2023 currently sits at 19.6 per cent having fallen by 3.7 per cent since the second quarter of this year. In terms of the annual picture, prime demand is down 5.9 per cent compared to the third quarter of last year. 

Clapham is the hottest spot of the core prime market, with 47.5 per cent of all homes listed for sale between £2m and £10m already sold subject to contract. Chiswick (41.8 per cent) and Highgate (38.6 per cent) are also home to some of the highest levels of high-end buyer demand at present. 

Clapham has also seen the largest quarterly improvement in demand, with levels climbing by 9.0 per cent since the second quarter of this year, followed by Wandsworth (4.9 per cent) and Hampstead Garden Suburb (4.1 per cent).

However, on an annual basis, it’s prime London’s traditionally popular neighbourhoods that are once again growing in demand. 

Fitzrovia has seen the largest increase year on year, with annual growth of 5.3 per cent, followed by Putney, Regents Park, and Islington.

Across the super prime London market, demand has fallen by 3.8 per cent versus Q2 of this year and fallen by 1.0 per cent since this time last year. 

Clapham is the most in-demand area of the super prime market with half of all homes listed above £10m already sold. In Fitzrovia and Notting Hill, demand sits at 12.5 per cent.

A spokesperson for Benham and Reeves says: “We had previously seen some strong growth in demand across the prime London market as a whole and this was largely driven by the more peripheral locations enjoying a pandemic boost in buyer appetites, coupled with returning interest from foreign shores. 

“However, market activity has cooled during the third quarter of this year and this generally echoes the wider market trends being seen across London. 

“While international buyers, in particular, have been less deterred by rising interest rates, it’s fair to say that the wider economic picture has caused hesitation amongst many prime buyers. It’s also important to note that the summer period does tend to bring a lull in market activity and this combination of factors has caused demand for London’s high-end homes to fall. 

"With the Bank of England finally opting to freeze interest rates last week, we expect to see a market wide boost in sentiment and, as we head into what is often the busiest time of year, this will no doubt translate to an increase in prime market activity during the final quarter of 2023.”