Buyers looking for luxury London homes ‘getting less generous discounts as housing market heats up’

London fell down when it came to housing affordability
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Joanna Hodgson30 October 2020

Buyers of luxury homes in London are getting less generous discounts on asking prices due to increased competition for properties since lockdown rules eased, according to Coutts.

The wealth manager and private bank tracked sales of homes on the market for £1 million and over in the three months to September 30 as part of its London prime property index (CLPPI). That covers 60 postcodes of prime London grouped across 15 areas.  

The firm, part of NatWest Group, found that only 33.5% of properties across prime London sold at a discount to the asking price, compared to 43.2% a year earlier.

The average size of discounts is also being squeezed, and now stands at 8.1% off asking prices compared to 9.8%.

Areas that saw less discounted deals included Battersea, Clapham and Wandsworth, as well as Hampstead and Highgate.

Estate agents and housebuilders suffered at the start of the lockdown as people were urged to avoid moving where possible and viewings stopped. Restrictions were eased in May, and there has been pent-up demand for properties. A stamp duty holiday has also enticed people.

Katherine O’Shea, director, Coutts’ real estate investment service, said: “With more people working from home, buyers are looking for more space, and perhaps a garden to enjoy during the day.”

However, the bank also pointed out that there is still uncertainty about the impact of coronavirus on the economy, as well as a lack of clarity about the full implications of Brexit, which is impacting some buying decisions.

The latest CLPPI data shows that prices across prime London are in total down 3.6% from the second quarter.