U.K. Luxury Home Sales Soared Following First Covid-19 Lockdown
It’s now one year on from the U.K.’s first national coronavirus lockdown and the country’s real estate industry is in “a stronger position than most people anticipated last March,” according to a report released 22nd March from Knight Frank.
One of the most significant changes over the past year has been increased demand for luxury homes, the brokerage and property consultant said. The number of deals on homes priced above £1.5 million (US$2 million) across the U.K. soared 39% between July 2020 and February 2021 when compared to the same time period a year prior, the report said.
Further underlining the strength of the top end was the luxury market’s performance within prime central London. Overall sales volumes in the affluent center of the city were down 10% in 2020 compared to 2019, but deals jumped 7% on homes priced between £5 million to £10 million in the same time frame. Demand for new homes has increased nationwide amid the pandemic. As of February, there were 12.7 prospective buyers for each new listing in the U.K.
“The ratio, which shows the strength of demand versus supply, is the second highest it has been in the last five years and demonstrates why there has been upward pressure on prices in the early months of this year,” Tom Bill, head of U.K. residential research at Knight Frank, said in the report.
The ratio should fall as some normalcy returns to the market on the back of Covid-19 cases declining and schools remaining open. The imbalance between supply and demand has pushed up prices nationwide. In the year to February, the average U.K. home price grew 6.9%, according to the report.
“As a relatively illiquid asset where sentiment plays such a central role, U.K. house prices have proved resilient during the pandemic,” Bill said, noting that Knight Frank expects values to increase by 5% this year.