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Highest number of sales in Hong Kong as London’s ultra-prime housing market slips amid Brexit concerns
More than 150 homes around the world changed hands for more than £20m ($25m) each in the past year, as the “relentless creation of private wealth” fuelled the global ultra-prime housing market.
The world’s richest people spent a combined £5.2bn ($6.6bn) on 153 properties that each sold for more than £20m in the year to end of August 2018, according to research by the estate agent Knight Frank.
The highest number of ultra-prime sales were in Hong Kong, where 47 homes priced at £20m or above changed hands. New York was in second place with 39. London – which topped the rankings in 2015 when £2.3bn of ultra-prime properties changed hands – slipped to third place with 38 transactions.
Estate agents said London had fallen out of favour with super-rich buyers due to the increase in stamp duty and concerns about Brexit.
In 2016 the government increased stamp duty to 12% on properties selling for more than £1.5m, rising to 15% if it is a second home. In order to avoid the stamp duty charges, overseas billionaires have been choosing to rent rather than buy luxury homes in the UK.
Liam Bailey, Knight Frank’s head of research, said: “The relentless creation of private wealth globally over the past decade has fuelled the growth of ultra-prime residential markets.
“Despite the proliferation of ultra-prime markets across cities, second home and ski locations, our research confirms there are three undisputed leading ultra-prime markets – Hong Kong, New York and London.
“While London has seen a relative decline in its lead as the world’s largest ultra-prime market, in terms of sales, Hong Kong has steadily built a commanding lead in terms of total spend by the world’s wealthy on ultra-prime property with New York growing its position as a dominant ultra-prime location.”
Most of the ultra-prime sales in London were in Mayfair, Knightsbridge and Belgravia, all of which are within the borough of the City of Westminster. The council last month banned the creation of new supersize properties built for the global super-rich in order to free up space for more affordable homes for “real people”. Westminster said banning “Monopoly board-style” homes would help free up more space for affordable homes for Londoners.
The UK’s ranks of the ultra-rich have swelled by 400 over the last year, taking the number of people with fortunes of more than £38m ($50m) to nearly 5,000. The fortunes of the already very wealthy have been growing at a far faster rate than the general population, according to report by the Swiss Bank Credit Suisse.
The number of ultra-high net worth individuals in Britain over the 12 months to summer 2018 increased by 8.5% to 4,670, while the average Briton saw their wealth, including property, increase by 1% to £213,000.