Resilience in UK Luxury: Insights from the £5 Million+ Real Estate Landscape in 2023

In 2023, London’s residential market for properties priced at £5 million and above demonstrated resilience, with a total of 526 sales of both new and existing homes, valued at £5.7 billion, according to Savills and Brydg Latitude. While this figure represents a 13% decrease from the record high in 2022, it is only a slight decline of 2.3% compared to 2021. Notably, compared to 2019, there has been a remarkable 71% increase in sales at this price point, highlighting the market’s strength over the past few years.

Properties sold for over £10 million accounted for £3.2 billion of the total sales, the highest value recorded from 2012 to 2019.

Despite the overall market fluctuations, this exclusive segment of London’s real estate has outperformed the broader UK market throughout the year.

Trends Behind the Data

Cash and international buyers continue to play a crucial role in prime London, helping to stabilize prices for high-value properties throughout the year.

Notably, half of all sales exceeding £5 million occurred in traditional prime areas: Chelsea (12%), Kensington (11%), Belgravia (10%), Mayfair (8%), and Knightsbridge (7%). This shift back to these sought-after locations, which were prominent in sales prior to the pandemic, has been fueled by the resurgence of international travel for both business and leisure, with affluent buyers eager to embrace the London lifestyle.

While looming changes to the existing non-doms regime and pre-election caution have led some buyers to adopt a wait-and-see approach, a strong demand for prestigious addresses in the capital remains. This has allowed top-end sales to exceed pre-pandemic levels, supported by both UK nationals and overseas buyers who are not UK residents.

Looking ahead, the outlook for the London property market is increasingly positive. With interest rates projected to decline and the British pound viewed as a politically stable currency, real estate is becoming an attractive hedge against inflation and a reliable store of value. At the same time, the pound’s relative weakness against dominant global currencies like the US dollar offers overseas buyers favorable pricing on UK properties. Together, these factors are likely to continue to bolster the market’s resilience and attractiveness in the coming years.