Prime London market sees demand climb during Q4 as Covid continues to influence buyer location

The latest research by lettings and estate agent, Benham and Reeves, has revealed which tiers of the high-end London property market are most in demand amongst high-end homebuyers and where they’re looking to buy across the capital.

Benham and Reeves analysed market demand based on the number of homes sold as a percentage of all homes for sale across London’s prime neighbourhoods and across various price thresholds.

The research shows that demand across London’s £10m+ market stalled in the final quarter of 2020, with demand falling -0.3% to 6% overall.

However, this hasn’t been the case across the rest of the prime London market and despite the ongoing uncertainty caused by Covid, homebuyer demand has started to climb.

Demand for all homes above £2m climbed by a total of 2% in the final quarter of last year, while demand for homes in the £2m to £5m price threshold was up 3.7% between Q3 and Q4 of last year.

However, it’s the £5m to £10m segment of the market that has seen the largest buyer interest increase. In Q4, demand for homes at this price threshold climbed by 4.8% compared to the previous quarter.

Despite growing market activity levels, it’s clear that Covid is still a concern amongst buyers, with outer areas with more green space continuing to register the highest interest.

Barnes (47%), Chiswick (43%), Clapham (43%), Richmond (36%), Wandsworth (34%), Wimbledon (32%), Putney (29%), Islington (29%) and Highgate (27%) all rank as the most in-demand areas for current London buyer demand above £2m.

Holland Park is the only prime central area to make the top 10 with demand currently at 18%. With Covid continuing change the way we work and our ability to commute, it comes as no surprise that Canary Wharf is the least in-demand location at just 2.4%.

Director of Benham and Reeves, Marc von Grundherr, commented:

“A combination of the stamp duty holiday and an incoming increase to stamp duty for foreign buyers caused buyer demand across London’s high-end market to largely stabilise during the final quarter of 2020.

All but the very top tiers of the market enjoyed a boost in market activity despite the broader turbulence that remained due to the current pandemic.

That said, Covid continues to prove a significant influence where buyer preference is concerned, with many continuing to favour outer locations that provide the opportunity for a bigger home and more green space.

While this is likely to continue this year, the growing availability of a vaccine should spur a return to normality of sorts. As it does, we expect to see demand across London’s more central prime neighbourhoods start to return as the capital begins to reopen both professionally and from a social standpoint.”

Current buyer demand based on the number of property listings marked as under offer or sold subject to contract in a particular area, or at a certain price bracket, as a percentage of all properties listed. Quarterly change shows how demand has increased or decreased since the previous quarter. Data sourced from Rightmove and Zoopla (Dec 2020).