One in five London homes sells for £1m-plus as prime property outperforms slumping market

More than one in five London homes now sells for £1 million or more, research has revealed.

Analysis of Land Registry figures by estate agent Benham and Reeves showed that buyers shelled out seven-figure sums for 21 per cent of the residential properties that changed hands in the capital in the first eight months of this year.

That is up from just 15 per cent in the corresponding period in 2019, showing the extent to which the higher end of London's property market has outperformed the rest during the post-pandemic slump.

Volumes of million-pound transactions are down in 2023, as would be expected in the current housing market.

But 3,716 seven-figure sales completed by the end of August this year, down just 22 per cent on the same period in 2019. That compares with a 45 per cent plummet in all properties sold in the capital.

The average price of those homes changing hands for more than £1 million has also risen slightly in that time, from £1.4 million to £1.45 million, demonstrating the relative buoyancy of the million-pound market.

London dominated the seven-figure housing market, with a fifth of its sales hitting that threshold in the most recent period, according to the research, compared to fewer than 2 per cent of second-placed Bristol's transactions.

Source: Benham and Reeves analysis of Land Registry data

Benham and Reeves director Marc von Grundherr says: "It’s fair to say that the London market as a whole has been underperforming for some time and we simply haven’t seen the same high rates of house price growth envelope the capital compared to the rest of the nation.

"However, there’s no doubt it remains the driving force when it comes to homes sold for £1 million or more and, in this respect, no other major city comes close.

"We’ve seen strong levels of demand so far this year across the upper tiers of the London market, buoyed by the return of foreign homebuyers, in particular.”

Lucian Cook, head of residential research at property specialists Savills, says soaring interest rates had led to a two-tier housing sector in the capital.

“Higher mortgage rates have caused a divergence between cash buyers and other groups in their ability to transact, and between the mainstream market and prime markets where housing wealth is most concentrated," he says.

“As a result, homes have still been selling at the top end, albeit more regularly requiring an adjustment to sellers’ price expectations."

Nick Whitten, head of living research at JLL, believes general house price growth in London has shunted more transactions into seven-figure territory.

“The relatively strong sales performance of £1m+ homes in London is largely due to a bigger pool of properties falling into this price bracket," he says.. Nearly 400,000 London homes are now valued at £1 million plus - an increase of 36 per cent from pre-Covid.

"We would expect to see continued strong house price growth in London on the back of a shortage of homes to meet demand. And this trend looks set to worsen with new home supply plummeting in the capital over the past year.”