Is the traditional luxury London housing market being disrupted by a form of inverted snobbery?

Even with talk of a recession, the market for super-prime properties in London – those valued at £20 million or more – is now booming again. A combination of a low pound and uncertainty over the potential for future higher interest rates, is creating higher demand – particularly from overseas.

We at Lees Associates, the go-to architectural practice for high-net-worth individuals, have seen this surge of interest with enquiries 15% higher year-on-year, particularly from dollar-buyers based in the USA – who are now looking to relocate to the capital.

One Hyde Park, with penthouses that have sold for over £100 million

It’s a trend confirmed by London property specialists Knight Frank, who are stating that the number of transactions exceeding £20 million, has been particularly strong following recent years of stagnant growth.

So, what does this mean for an architectural practice such as Lees Associates? As specialists working for high-net-worth clients, an influx of wealthy buyers usually means a rise in demand from discerning clients wanting to put their own distinctive look on their new property - and such has been the case.

Eaton Square - another PCL location where LA have had a number of projects

But, while a surge in new business is always welcome, it is interesting to note that recent property trends are not quite the same as those of the past. There are fewer Middle Eastern buyers, and for obvious reasons there is no longer a strong Russian influence.

It is, as already mentioned, the growing presence of new US buyers, that is setting the trend. There are several theories why this should suddenly be happening, one being the disturbing perception that some high-net-worth individuals no longer feel safe living and working in large American cities.

London, of course, has always been popular with Americans. The capital has always welcomed newcomers and offers a high quality of life, a good place to raise children and, being English-speaking, also provides the best environment and a strong infrastructure in which to do business – particularly for those from the US.

Premium riverside housing

As in the past, these wealthy buyers continue to gravitate towards the traditional premium districts of Mayfair, Belgravia and Knightsbridge, where it is reported that property prices have fallen by some 17% in recent years – and this, according to the experts, is offering the greatest value and is proving highly attractive to high-end earners.

We are also seeing a growing generation gap, with older buyers looking at those more traditional areas, while the younger generation are opting for less-obvious outwardly ostentatious districts such as Notting Hill, which has recorded prices rises in excess of 12% over the last 12 months.

In addition to Notting Hill, Kensington and Holland Park have also been active, particularly in the £10m plus price bracket, while Kings Cross and Islington are matching those price rises of 12%.

Demand for high-end property continues to strengthen

Some commentators are suggesting that all this super-prime activity outside of the traditional core for London, is a very upmarket form of inverted snobbery, but it is more likely that younger high-net-worth individuals simply want to live in a place that is friendlier, trendier and more “real”, offering a greater variety of restaurants, schools and other upmarket facilities – so it simply ticks all the right boxes.

This is all good news for the luxury housing market, but while demand is increasing because of a growing number of international buyers, it is still below that achieved pre-Covid. That said, property experts and Architects such as Lees Associates believe that demand for premium property will only strengthen as international buyers continue to flock to London.