London’s residential market for properties valued at over £5m experienced a slowdown in 2023, as reported by Savills’ comprehensive market analysis. However, despite this deceleration, sales figures remained significantly higher than pre-pandemic averages.
Savills recorded a total of 526 transactions in the £5m-plus bracket in 2023, marking a 13% decrease from the record high in 2022. Yet, this figure was only 2.3% lower than in 2021 and surpassed any other year since 2013.
In terms of value, these transactions amounted to £5.7bn in 2023, with properties worth over £10m contributing £3.2bn to the total. This value is the highest recorded for the period between 2012-2019.
Frances McDonald, research analyst at Savills, commented on the market’s resilience: “The rarefied top end of the London market outperformed the wider UK market in 2023 with transactions holding relatively steady. Cash and international buyer interest continue to play a pivotal role across prime London, which has resulted in prices for higher value properties remaining steady over the course of the year.”
Savills anticipates a stable market value in 2024, given the looming general election, but forecasts a price growth of 3.5% in 2025 and 6% in 2026, aligning with an expected global economic recovery and reduced domestic political instability.
Traditional prime postcodes such as Chelsea, Kensington, Belgravia, Mayfair, and Knightsbridge accounted for half of the £5m-plus sales in 2023, indicating a return to pre-pandemic preferences driven by international travel and interest.
Alex Christian, joint head of the Savills Private Office, observed a shift in market dynamics: “In 2023 we saw a rebalancing back in favour of the prime postcodes. Belgravia, in particular, has jumped back in popularity, thanks to significant investment in the area.”
Apartments represented 43% of the £5m-plus sales in 2023, the highest percentage since Savills began recording in 2012. This trend reflects the return of international buyers who prioritise quality design, finish, and service.
Christian concluded: “There continues to be a scarcity of larger stock on the market, with a very limited new build pipeline. However, owners are beginning to show greater commitment to coming to market, in order to take advantage of current buyer positivity.”