Super-Prime Property in a Post-Covid World
November 12, 2020|Super Prime Property
s we enter a second lockdown in England, this brings new significance to the saying ‘an Englishman’s home is his castle’. A place of sanctuary in these testing times, the first lockdown saw our clients reconsider how they use their home. In spite of a backdrop of unprecedented global uncertainty, the luxury property market has surprised us in its resilience and strong transactional performance, which we predict will continue as we move into this second phase of lockdown. As part of a new series focused on super-prime property in a post Covid-19 world, we have collaborated with Trevor Kearney (@superprimesurrey), Director of Savills‘ Country Department and Instagram influencer. Trevor’s expertise centres around the sale of super-prime homes in key locations, such as The Wentworth Estate and Sandbanks, acting as a trusted advisor to Ultra High Net Worth Individuals (UHNWIs). In this introductory article to this new series, we share our thoughts as well as Trevor’s expert predictions on what lockdown 2.0 could mean for the super-prime market and beyond.
'The British have the same enduring appetite to invest in property, even during these exceptional times.'
When the UK entered the first lockdown, no one knew what to expect. The announcement saw all but essential house moves banned, as well as buyers being urged to postpone purchases. As a result of not being able to physically show homes for a quarter of the year, virtual viewings have become the new standard. In spite of these restrictions, in the first lockdown Trevor transacted on four super-prime properties that were only viewed virtually. In addition, 32% more viewings where conducted on properties above £3m when compared to last year.* We believe this clearly underlines the liquidity and resilience of the market. Trevor adds: ‘no other country has performed like the UK in terms of transaction levels, which shows that the British have the same enduring appetite to invest in property, even during these exceptional times.’
Many of these transactions are being driven by affluent ‘upsizers’, in search of spacious properties with extensive outdoor space. With the restrictions on international travel in place and the global financial centres of Hong Kong and New York experiencing relatively high levels of political volatility, there has been a significant rise in the number of British super-prime buyers. This rise illustrates that the UK’s exemplary education and legal system remains an attractive motivator to domestic buyers. This has marked a shift in the locations our discerning clients are looking to invest in. Last year a quarter of sales with a value of £10 million or more were in Mayfair, which was driven by overseas buyers.** By comparison, wealthy British buyers are investing in family homes in leafy London neighbourhoods such as Notting Hill, St. John’s Wood, Hampstead and Belgravia allowing them to keep a foothold in the capital.
'A home in the country forms an attractive proposition, as it offers extensive indoor and outdoor space, which is the ultimate luxury during this time’.
In times of uncertainty, the prospect of a country residence is more desirable than ever. Trevor has seen a significant rise in interest around the country market post-lockdown: ‘a home in the country forms an attractive proposition to the clients I work with, as it offers extensive indoor and outdoor space, which is the ultimate luxury during this time’. The allure of a country retreat was clear to see from the gridlock London experienced on the eve of the second lockdown, highlighting the ongoing importance of space and nature that the countryside presents.
It’s evident from the first lockdown that home has never been more important. For our clients, this means considering the current use of space in their homes, and identifying what may be missing. For instance, we have seen a surge in demand for dedicated his and her areas. Although the bedroom has always been an important room for relaxation and unwinding, the study is now also a key space in the home, as many experience the shift from office to home working. This has led to many of our clients wanting the very best lifestyle and security solutions – digital ready – to ensure their homes are fully equipped to meet whatever future events unfold.
Trevor remains confident that a second lockdown will not have a negative impact on the domestic super-prime market: ‘Savills are continuing to show properties in a measured, safe and considered way. So far this year, 36% more buyers have registered with us looking for properties above £3m compared to last year, it’s clear that our clients will continue to invest in property even during a state of lockdown’.*** For instance, a British buyer has just transacted on the sale of the penthouse at No.1 Grosvenor Square, as well as further multiple units, for a price in excess of £140m. Savills facilitated the purchase in this world-renowned address during lockdown, illustrating that domestic buyers are still actively searching for best-in-class property in prime central London locations.
Prime Minister Boris Johnson has stated that he wants to allow such trade to continue to aid the recovery of the economy, and as a result the housing market will remain open for business, even as we move towards the quieter Christmas period. This will stop the property market from undergoing another period of suspended animation, even in the face of renewed disruption. As a result, we see this as a temporary interruption to financial recovery rather than a derailment altogether.
In short, for the super-prime market, it is business as usual despite the restrictions the next four weeks present. Our upcoming series will explore the changing priorities of our clients as we enter this new phase of the pandemic, beginning with how Coronavirus has shaped the role of technology in the home.
*Savills data January 2020 – October 2020 v January 2019 – October 2019
**The Evening Standard Homes & Property
***Savills data January 2020 – October 2020 v January 2019 – October 2019