23 April 2021
London is and always will be a top global spot for luxury home sales
London is ranked first in the world for super-luxury real estate sales in 2020, according to The Guardian, citing data from the real estate agency Knight Frank. Hong Kong is in second place with New York coming in third.
A total of 201 high-end properties were sold in the British capital for a total of £2.7 billion.
Despite the pandemic and multiple lockdowns, Knight Frank analysts have calculated that sales of super-elite housing (this category includes real estate valued at over £7.3 million) decreased in 2020 by only 1%. At the same time, the volume of transactions in London increased by 3%, while in New York and Hong Kong it decreased by 48% and 27%, respectively.
The UK seems to continue attracting HNWIs and UHNWIs from around the world despite Brexit and Covid-19. This can be attributed not only just to the attractive property market, but also a strong economy, high standard of living, beneficial tax system, world class education and respect for human rights and the rule of law. The justice system in the UK is as globally respected as ever as demonstrated by the case of Nathan Law, the pro-democracy leader who fled Beijing’s crackdown in Hong Kong last summer. He has now been granted asylum in the UK this April as a matter of public record. The activist highlighted the plight of other asylum seekers in the UK from Hong Kong who might not have the same weight of evidence behind their claims.
“I hope that my case can help the Home Office understand more about the complicated situation in Hong Kong.’’ – Nathan Law.
Emma Copestake, Real Estate Partner at Payne Hicks Beach has also shared her professional views regarding the property market. She observes that about seven to eight years ago many non-domiciled UK residents made a decision to leave the UK. However, times have changed unexpectedly – after living abroad for some time, have made the decision to return, which has in turn created a renewed wave of demand and interest in the UK luxury property market. In addition, we are seeing an increasing number of people who have historically carefully maintained their non-resident status choosing to become UK resident. They often choose to buy bigger family homes and/or country properties in addition to their London home.
Interestingly there has been increase in property buyers from the Far East, the Middle East and the US. An interesting trend is that some property owners who had only had a comparatively small London home chose to come to the UK for lockdown, seeing it as a place of safety and security. Many have so enjoyed being here, despite the restrictions, that they have chosen to stay and buy a large family home in the Capital. This is not coincidental, London is an extremely diverse city and many are captivated by its architecture and spirit from the day they move here. New developments serviced by hotels or with full facilities and a concierge service have been a popular choice.
In terms of further recent developments resulting from the Covid-19 pandemic, families had more time to spend together as a unit during these uneasy times. Families have had time to think about their plans for the future together. Decisions have been made about where people plan to retire and what they plan to do when they do, where children will go to university, etc and this has resulted in a number of transactions.
Liam Bailey, Head of Research at Knight Frank, noted that the London real estate market has survived Brexit and the coronavirus pandemic, which suggests that its popularity will only increase in the future.
Additionally according to government statistics, the UK issued 52 Tier 1 Investor Visas to main applicants in 2020 with China & Hong Kong accounting for 36% of applicants in the final quarter of 2020. More than a third of buyers in the UK luxury home market were already UK resident. Non-UK nationals who obtained Tier 1 UK visas are eager to settle in the UK and purchasing a property is one of the fundamentals in starting a stable new life abroad.
These figures are in contrast to the sales figures for ordinary real estate. Nationwide data shows that in the first three months of 2021, London performed the worst of any other UK city. HNWs continue to seek one-of-a-kind real estate and focus on Central London’s desirable locations.
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This publication is not intended to provide a comprehensive statement of the law and does not constitute legal advice and should not be considered as such. It is intended to highlight some issues current at the date of its preparation. Specific advice should always be taken in order to take account of individual circumstances and no person reading this article is regarded as a client of this firm in respect of any of its contents.
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