In the six months to November there’s been a 79 per cent increase in sales of homes priced £5m to £10m says Knight Frank.
“This increase underlines how the market is not simply responding to a stamp duty holiday, the effect of which is negligible in this price bracket. Instead it reflects growing demand for houses, which tend to be more numerous in this price bracket and more in-demand among domestic buyers” explains Tom Bill, head of UK residential research at the agency.
“It is also a result of how far prices have fallen in recent years due to tax changes and political uncertainty, which had a more marked impact in higher-value markets” he continues.
“Average prices between £5m and £10m fell 8.8 per cent in the two years to November, the largest fall of any price band.”
Meanwhile the performance of the prime outer London market continues to outpace central London as the year comes to a close.
Average prices increased 1.6 per cent between June and November in outer London, which by Knight Frank’s definition includes areas like Wandsworth, Belsize Park and Chiswick.
Prices fell a further 0.1 per cent over the same period in prime central London.
The agency forecasts a 4.0 per cent growth in prime central London next year and 5.0 per cent in prime outer London on the basis that any economic fallout from the pandemic will be more limited in prime markets.
Bill concludes: “Overall, the relatively muted price performance in all areas since the market re-opened in May underscores how the release of pent-up demand has been balanced by fragile sentiment surrounding the UK economy. Prices in prime central London have also been kept in check by international travel restrictions.”