Demand from London’s wealthiest buyers dips in Q1

The latest Prime Central London Buyer Demand Index by London lettings and estate agent, Benham and Reeves, has found that demand is down across the prime London market (£2m-£10m) both on a quarterly and annual basis, while a quarterly decline in the super-prime market (£10m+) has not been enough to disrupt a year of positive annual growth.

The Prime Central 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+.

Prime Market – £2m-£10m
Across the core prime market, buyer demand has seen a slight decline in the first quarter of 2023, falling by 0.6% to sit at 20.8% currently. This cool in market activity also results in an annual decline of -3.9% since this time last year.

Islington (45.9%), Richmond (43.8%), and Barnes (43.6%) are home to the current highest demand for prime properties.

In terms of quarterly change, however, Wapping has seen the strongest growth at 14.4%, followed by Islington (8.0%), Richmond (7.4%), and Barnes (5.8%).

The largest quarterly decline in demand for prime London property has been recorded in Chiswick where it has dropped by -14.2% in the past three months, followed by Highgate (-10.9%), Wimbledon (-10.2%), and Fulham (-5.7%).

On an annual basis, Hampstead has seen its popularity grow the most with a Prime demand increase of 7.4%. In Islington, demand is up 6.4%, while Wapping (4.5%), Richmond (1%), Chelsea (0.9%), Regents Park (0.9%), and Barnes (0.2%) have also recorded annual demand growth.

The largest annual declines have been recorded in Clapham (-26.7%), Wandsworth (-19%), and Highgate (-11.6%).

Super Prime Market – £10m+
London’s super-prime market has also recorded a quarterly decrease in demand in Q1 2023, falling by -2.8% to sit at 7.5% currently. However, on an annual basis demand has still increased by 4.9%.

Pimlico is the hottest spot in London’s super prime market with current demand at 33.3% followed by Holland Park (20%), Maida Vale (12.5%), and Marylebone (10.5%).

The largest quarterly increase has been recorded in Holland Park where demand is up 13.8%. This is followed by Kensington (6.2%), Regents Park (3%), and Knighstbridge (1.7%).

The biggest quarterly drops have come in, Pimlico (-33.3%), and Fitzrovia (-20%) and Victoria (-11.8%)

As for annual demand change, the best performing areas of London are Pimlico (33.3%), Belgravia (21.9%), and Holland Park (13.8%)

The worst annual drops have come in Wimbledon (-25%), Notting Hill (-10%), and Hampstead (-8.3%).

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

“Homebuyer activity across the prime London market had shown signs of improvement throughout much of last year, with momentum building, driven by the return of foreign interest in the capital’s traditionally prime neighbourhoods.

However, it’s clear that the current uncertainty of the UK’s economic landscape is enough to unsettle even the wealthiest of buyers and this has led to a reduction in demand since the final quarter of last year.

We expect this to be a temporary dip due to a wait and see mentality rather than a downward curve and we’re also seeing substantial demand for rental homes at present by those wishing to make their move without committing to a purchase.

We currently have an average of 32 applicants for every rental property at the moment which is some 21% more than we did last year.”