Property owners in prime areas of London who made purchases in 2014 have since seen their home values flatline — and the stalled growth has made them unwilling to sell.
Only 3% of people who bought homes in the 10 most expensive post codes of London in 2014, when price growth peaked, have sold their homes in the years since, according to an analysis by the real estate company Hamptons. That’s much less than the rest of the country, with 11% of 2014 homebuyers in England and Wales having sold their houses and 7% of those in all of London.
While annual home prices in London surged 19% in 2014, price growth has slowed since then, the result of the Brexit vote, the pandemic race for space leading people to the suburbs and, more recently, higher interest rates hurting demand. Luxury London properties haven’t been immune, with prime properties in February suffering the sharpest price drop in five years.
The result is that people who bought homes in prime central London 10 years ago have held on to their homes, much more so than the rest of the country, as they’re unwilling to part with their houses at a loss. Homes bought in prime London in 2014 sold for 4% less on average in subsequent years.
“Most households who bought in prime central London in 2014 have seen the value of their home slide sideways,” said David Fell, lead analyst at Hamptons. “With most would-be sellers unwilling to take a hit on their home, they’ve sat remarkably tight waiting for prices to recover.”
Hamptons defines prime properties as those selling at more than £1,000 per square foot (£10,764 per square meter) in areas where at least half of households earn more than £100,000 annually.
Some neighborhoods have been hit harder than others. In London’s Victoria neighborhood, homes sold for £3.6 million ($4.5 million) on average in 2014 and sold again for £3.3 million between 2014 and 2023, a 7% drop. In South Mayfair, homes that sold for £6 million on average in 2014 sold for 6% less in subsequent years; and in Marylebone, homes sold for 4% less.
Not all expensive neighborhoods have suffered, though. In North Mayfair, homes were sold at a 17% premium between 2014 and 2023. In Notting Hill, they sold for 13% more, and North Kensington saw a 12% gain.