Demand for prime property in the capital has fallen, and even vanished in some areas, London lettings and estate agent Benham and Reeves has found.
Homes listed in the super prime threshold of £10m and above across London’s prime suburbs have taken the largest hit in demand, with just two per cent of all listed properties approaching a sale.
There are a total of 13 areas where there is absolutely no demand for super-prime properties, with a further seven areas where no homes are listed above this threshold.
Highgate is the most in-demand, with an eight per cent of listed properties in the area being listed as either ‘under offer’ or ‘sold subject to contract’ (SSTC). Next in line is Notting Hill (six per cent), Knightsbridge (five per cent), Mayfair (four per cent) and Chelsea (two per cent).
“That’s going to be the case,” said Mike Bristow, chief executive of CrowdProperty. “This is the problem with prime property, it’s volatile.
“Prime property has totally different economic drivers, demand and market considerations, as well as foreign exchange risks.
“Lending is all about managing risk and I think the risk factors here are far higher and different.
“Our particular focus is on domestic under-supplied property in liquid markets at mainstream price points, meaning where there is enduring demand and supply.”
Meanwhile, for properties on sale for between £5m and£10m, average demand is at 10 per cent, however, there remain a number of areas where homebuyer activity remains robust.
Barnes (56 per cent), Wimbledon (33 per cent) and Richmond (25 per cent) remain popular, joined by Pimlcio (19 per cent).
However, at this price bracket demand for housing is currently non-existent in Fitzrovia, Marylebone, Maida Vale, Regents Park, Canary Wharf, Battersea, Wandsworth and Chiswick.
Wellesley’s strategy have been to avoid any exposure to the prime property market and is focused on the development of flats with unit prices of around £300,000 in the regions where there is support from the government help to buy scheme.
“The prime property market in the UK is a very specialist market and is very dependent on overseas buyers,” said Andrew Turnbull, co-founder and director of property lending platform Wellesley.
“Therefore, it is perhaps not so surprising that with lockdown and in particular with air travel restrictions that this market is quiet.”
At the lower end of the capital’s prime property market (£2m to £5m) demand remains fairly robust at 15 per cent on average.
Richmond is the most in-demand of all prime London locations at this price bracket, with 40 per cent of all homes listed still under offer or SSTC despite the spread of the coronavirus.
Barnes (38 per cent), Clapham (32 per cent), Wimbledon (29 per cent) and Chiswick (28 per cent) are also amongst the most popular.
“In times of crisis, the UK property market relies upon factors of necessity amongst home movers such as death, divorce and employment patterns,” said Marc von Grundherr, director of Benham and Reeves.
“However, the present situation is preventing all but the most committed buyers from transacting and this is no different in the prime and super-prime echelons of the London market.”