Boom year for ‘superprime’ home sales sends wealthy buyers into the suburbs

Sales of “superprime” homes in London have flourished this year despite rising stamp duty rates and the threat of a mansion tax.

New research reveals that 343 homes sold for at least £5 million in the first 11 months, compared with 319 in the same period last year. These include a Notting Hill house bought last month by singer Adele for a reported £5.6 million.

Although areas such as Knightsbridge and Kensington still dominate, there is evidence the super-wealthy are now more willing to look elsewhere.

Marcus Bradbury-Ross, of Prime Purchase, said surging prime central London prices have sent some buyers to suburban areas in search of better value. “The £5 million club is extending beyond the traditional zone,” he said.

Lucian Cook, director of residential research at Savills, which compiled the figures, said unless this month proves exceptionally slow, this part of the market will comfortably break last year’s record. New-build sales have been strong, accounting for a record of more than 50 sales at £5 million-plus. Overseas buyers tend to prefer new flats to “second-hand” homes. Between August and October, five homes were sold in the One Hyde Park development in Knightsbridge to foreign buyers. In October, a Kazakhstani buyer bought a £25 million flat in the development, where sales stand at £1.7 billion.

This year, overseas buyers snapped up 65 per cent of London homes priced at £5 million to £10 million, and 62 per cent of £10 million or more. The top sales were mainly concentrated in five postcodes — SW1 (Belgravia), SW3 (Chelsea), SW7 (Knightsbridge), W8 (Kensington) and W1 (Mayfair).

However, the recession hit sales of homes at £20 million and above. In the first 11 months of this year, there were 22, but 35 during the 2011 period. Jonathan Hewlett, Savills’ head of London region, said: “There is more caution at £20 million-plus, not least because the exchange rate is less beneficial.”

In March, Chancellor George Osborne set stamp duty on properties sold for more than £2 million at seven per cent — up from five per cent — making it at least £140,000 in this bracket. After dismissing a “mansion tax”, he this month announced an annual levy on homes worth £2 million or more that are held through offshore corporate companies, a technique particularly popular with overseas buyers.

Chapel Street, £5.95m
Classic townhouse with courtyard garden and roof terrace. Four bedrooms, all en suite, plus a wine cellar.

Chester Terrace, £8.25m
Grade I-listed house close to Regent’s Park. It has four bedrooms, four bathrooms and a private garden but has only 47 years left on its lease.

Chester Square, £14.5m
Six-bedroom, white stucco house with four bathrooms, two reception rooms, a media room and a family room, plus a roof terrace.

Source: Savills