Deals Are Slipping for London’s High-End Homes, but Appetite Remains in the Most Upscale Neighborhoods

London’s prime housing market, despite being more shielded from the economic challenges impacting the wider housing market, has proved it’s not immune after all, according to a report Friday from LonRes. 

The number of homes under contract across the capital’s prime enclaves, which includes the neighborhoods of Chelsea, Kensington, Mayfair and Knightsbridge, was down 14.6% in November compared to the same time last year, and finalized sales were 4.8% lower, the property analysts said. 

“Not all areas of prime London are equal and some have fared better than others over the year,” Anthony Payne, managing director of LonRes, said in the report. “But as we also report, transactions are up in some of the most expensive areas of Prime London and this is what we’re hearing from agents too.”

Indeed the data reveals that it is those higher-priced local markets, home to the most property sales above £5 million (US$6 million), that are generally recording more sales this year or smaller declines in transactions compared to last year.

Across posh Mayfair, for example, the number of deals made between January and November was up 16.9% compared to the same period last year. 

“In the final weeks of 2022 we have seen a flurry of top-end sales, which include a flat with an asking price of £34.5 million, a house priced at £13 million, another at £10.5 million and flats at £6.8 million and at £5 million. It seems there’s a lot of last minute Christmas shopping currently underway in central London,” he said. 

The opposite is playing out in prices though. 

Overall, prices across prime London were up 1.9% in the year to November. But the largest rises were recorded across the generally lower value “fringe” neighborhoods, including Chiswick, Fulham and Maida Vale, where values jumped up 5.2%. 

Whereas in prime central London—home to the priciest markets—ticked up 2.5%. 

The trend could see itself reversed next year, though, as the more mortgage dependent fringe  markets start to struggle, the report said.