Key Highlights
- Luxury home prices in the UK slipped -0.1% from June to November, according to Knight Frank
- UK home values overall increased +7.6% in November
House prices in London’s most expensive markets dropped -0.1% between June and November, the largest annual drop since 2016 according to Knight Frank.
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Meanwhile, values across the UK posted the biggest increase in home values in four years with an increase of +7.6% in November, also according to Knight Frank.
The current tax break on home sales via the Stamp Tax “pause” until the end of March, 2021 and pent-up demand caused by the COVID lockdown apply to both “regular” residential properties as they do to luxury properties, so what’s going on with this pricing disparity?
London’s luxury property prices and sales have dropped -0.1% and -4.8% respectively. London’s luxury rental market is also struggling, big time. Average prices for luxury rentals plummeted -10.5% through November, according to Knight Frank. This is the biggest fall in London’s lux rental market pricing since the global financial crisis.
Knight Frank points to the lack of international buyers and visitors as well as to an oversupply of short-stay properties for the price collapse of both luxury owner-occupied and luxury rental markets.
Perhaps the rollout of vaccines will help revive these luxury markets as international buyers and investors feel more confident and comfortable traveling. Knight Frank’s forecast for home prices in the wealthiest central London areas is in fact betting on that as its 2021 forecast calls for a +4% increase in lux house prices. Additionally, Knight Frank believes that any additional economic fallout from the pandemic will be less impactful in London’s highest-end markets.
Real estate agents stateside and abroad…now is the time to dial in on central London’s top-tier housing market as this market is essentially “on sale.” Perhaps this is the time to inform and educate your international second-home owners and investors about potential timely opportunities.
Thanks to Knight Frank and BloombergNews.
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