Estate agents make Pollyanna look like Schopenhauer: they exude optimism from their very pores. It was always going to take more than Britain’s exit from Europe and a global pandemic to burst their bubble. London-focused Foxtons in June claimed a sharp market rebound from the Covid-19 lows of April and May. Now Zenprop is hoping to sell an early 18th-century mansion overlooking London’s Regent’s Park for £185m.
True, the market for such prime properties has always existed in its own ecosystem. The ultra-wealthy are not immune to economic vicissitudes but tend to have greater resilience. London still carries a certain cachet, whether to invest petrodollars, seek medical treatment or educate your kids.
Many buyers in these camps are from overseas, led by purchasers from mainland China and Hong Kong. Dollar-denominated home seekers get 20-odd per cent more bang for their buck than they did in 2014. On top of that, prices in the ultra-luxury segment have sunk 20 per cent since then, says Savills.
It is easy, for those of a bullish bent, to see the pandemic as a spur to the market. Just as many people, recently deprived of bars and football games, have time on their hands to punt stocks, so too they have time to search (online) for properties. The switch to working from home has upped the desire for bigger dwellings, and not always in the countryside. The very rich see no reason to sacrifice wifi connectivity in order to have a garden.
The main prop for the bulls is scarcity. Planning policy makes it increasingly difficult to turn commercial buildings into plush new residential blocks in London’s smartest enclaves, such as Westminster. Demand factors, for all the enthusiasm, remain volatile; at some point the pandemic will be construed as risk, or at least a reason to wait a while for prices to drop. No matter how stunning, a 28-bedroom property carrying a £185m price tag is out of sync with the times.
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