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London's luxury flat boom: sales of £1m apartments treble in a decade as wealthy buyers choose lateral living over grand houses. 16th May 2017


Sales of £1 million-plus flats in England and Wales have trebled in the past decade as wealthy buyers opt for new-build luxury apartments in desirable central London locations.Almost all (96 per cent) of the million-pound apartment sales recorded in England and Wales last year were in London, with more than half taking place in Kensington & Chelsea and Westminster, the capital’s two most expensive boroughs, according to the latest research by Lloyds Private Banking.The increase in luxury flats takes place against a background of generally rising house prices in London: average property prices in the borough of Kensington & Chelsea rose 114 per cent in the decade to 2016 to £1,850,000; in Westminster the change was even more dramatic, with average prices rising 145 per cent to £1.4 million. 

 

Sales of £1 million-plus flats in England and Wales have trebled in the past decade as wealthy buyers opt for new-build luxury apartments in desirable central London locations.Almost all (96 per cent) of the million-pound apartment sales recorded in England and Wales last year were in London, with more than half taking place in Kensington & Chelsea and Westminster, the capital’s two most expensive boroughs, according to the latest research by Lloyds Private Banking.The increase in luxury flats takes place against a background of generally rising house prices in London: average property prices in the borough of Kensington & Chelsea rose 114 per cent in the decade to 2016 to £1,850,000; in Westminster the change was even more dramatic, with average prices rising 145 per cent to £1.4 million. 

 

SAVING ON STAMP DUTY

 

The other major price hike, which has proved particularly off-putting to investors in the past five years, is the increase in property taxes, with stamp duty now at 12 per cent on any portion of a property sale above £1.5 million and an additional three per cent levy imposed on buy-to-let properties.“Since the stamp duty increases in 2014, overseas investors in particular have been looking at properties around the £1 million mark because stamp duty is cheaper at that level,” says Shaw. “Chinese and Middle Eastern investors like to buy at this level because they save on stamp duty and it enables them to spread their risk a lot better.”

 

BUYING INTO THE LATERAL LIFESTYLE

 

The past decade has also seen increased appetite for luxury apartments from a broad spectrum of owner occupiers.READ MOREGrand restoration brings 32 luxury homes to Clapham CommonAsking price of Regent's Park home drops by £1m - but there's a catchInside London's most luxurious Airbnb rentalsThe number of EU nationals living and working in the UK almost trebled between 2006 and 2016, according to the ONS. “They tend to prefer apartments because they provide a much more European style of living,” says Waleed Mohammed, director of new homes at Merchants Row.“Downsizers want to buy lateral homes, people buying pied-a-terres are more comfortable buying apartments because they’re lock up and leave, even families are deciding that you get less wasted space in a flat than in a house.