There were only 369 houses sold for £5 million or more in the UK last year, down 15% on 433 sold in 2016 and down a third on 545 in 2014, shows research by Lendy, one of Europe’s largest peer-to-peer secured lending platforms.
Lendy says that these super-prime property sales were worth £3 billion last year, falling from £3.7 billion in 2016 and £4.7 billion in 2014.
The property platform explains that key drivers of the fall in luxury home sales are likely to include a slowdown in purchases by overseas high net worth individuals since the Brexit vote, and banks becoming more cautious in lending, even to the wealthiest individuals.
Lendy says that since the Brexit vote, non-UK high net worths (HNWs) have started to turn more cautious on super-prime residential property. Some are choosing to put investment plans on hold until the Brexit process is complete, or instead purchase larger portfolios of lower-value property.
Lendy adds that banks have also become more cautious on their lending to high net worth individuals, with even private banks instituting more stringent lending criteria and reducing LTVs. This has made it more difficult to obtain the multi-million pound mortgages needed for super-prime purchases.
The property platform says that the London boroughs of Kensington & Chelsea (118 sales) and Westminster (111 sales) remain the most popular locations for super-prime residential purchases. 62% of all £5m+ purchases in 2017 were located in just these two boroughs.
These areas were followed by the London boroughs of Camden (44 sales) and Barnet, home to The Bishops Avenue, known as London’s Millionaire’s Row (14 sales). Fifth is Elmbridge in Surrey, which has become known as ‘Britain’s Beverly Hills’ (10 sales).
Liam Brooke, co-founder of Lendy comments: “Super-prime residential properties have definitely seen a slowdown in just the past 12 months, with overseas investors keen to see what Brexit will look like, and what effect it will have on the market.
“Private banks have also tightened up their lending criteria for high net worth investors. A £5 million mortgage isn’t as easy to come by as it once was, even for investors with very substantial wealth.”
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