Billionaires scale back real estate deals in central London
Rich individuals buying London homes are opting for smaller properties, with spend falling and the average house size nearly halving from 11,200 sq ft to 6,500 sq ft.
Over the first half of the year, agency Beauchamp Estates tracked £731m worth of deals agreed for the sale of ultra-prime homes in central London priced above £15m. That is down £100m, or 12%, on the £829m total in the first half of last year. But the number of deals has proved stable, at 46 compared to 45 a year ago.
Beauchamp cited growing international competition from locations such as Dubai, Miami and the French Riviera as the reason for the drop in expenditure. The number of deals in Dubai last year rose by almost 30% and twice as many deals for homes valued over £15m were closed compared to London.
Rich individuals buying London homes are opting for smaller properties, with spend falling and the average house size nearly halving from 11,200 sq ft to 6,500 sq ft.
Over the first half of the year, agency Beauchamp Estates tracked £731m worth of deals agreed for the sale of ultra-prime homes in central London priced above £15m. That is down £100m, or 12%, on the £829m total in the first half of last year. But the number of deals has proved stable, at 46 compared to 45 a year ago.
Beauchamp cited growing international competition from locations such as Dubai, Miami and the French Riviera as the reason for the drop in expenditure. The number of deals in Dubai last year rose by almost 30% and twice as many deals for homes valued over £15m were closed compared to London.
Jeremy Gee, managing director at Beauchamp Estates, said another contributing factor was the prospect of tax rises for the wealthy: “To keep London as an attractive destination for global wealth the Labour government need to avoid any attempt to introduce capital gains tax on principle residences and additional taxation on second homes,” he said.
Paul Finch, director at Beauchamp Estates, said uncertainty surrounding the UK election could have created “pent-up demand”, which may spark a “flurry” of sales in the latter half of the year. And the US election too will drive activity, he added.
Finch added: “Given the faltering presidential campaign of Joe Biden and the failed assassination attempt on Donald Trump, which has stunned America but will energise Trump’s MAGA base, it now seems a certainty that Trump will win the presidential election and become the next leader of the United States.
“Last time Trump was in power we saw a significant 20% upturn in wealthy Democrats buying £15m-plus homes in London and the South of France to live out the Trump administration and we are likely to see a repeat of this American buyer influx into London and the Riviera when Trump comes to power.”
Separate analysis from JLL’s residential research team found a 38% increase in sales of homes valued between £2m and £5m, as well as 25% growth in homes valued over £10m in the second quarter. Total spending for homes priced £10m or more reached a record high of £439m in the first half of 2024.
Marcus Dixon, head of residential research at JLL, had a similarly optimistic outlook for the rest of the year following the election. He said: “While challenges persist, including the sustained pressure of higher rates on the lower end of the market and uncertainties surrounding political plans, there is an overall sense of optimism, and with the election behind us we expect activity to increase in the coming months.”
Oceanic House © Beauchamp Estates
