KUALA LUMPUR (Oct 19): More money has been spent on London properties valued at more than £10 million (RM53.61 million) in the first eight months of this year, compared with the same period of last year, according to Knight Frank's Super-Prime Market Insight — Autumn 2020 released recently.

The report revealed that £1.13 billion was spent on London super-prime property from January to August 2020, which was 16% higher than the figure of £977.5 million recorded for the same period of last year.

“There were a total of 56 super-prime deals in the first eight months of this year, compared with 57 last year. A higher proportion of super-prime exchanges involved British buyers in 2020 given the restrictions on travel. In the first eight months of the year, the proportion was 40%, the highest such figure over the last decade,” it said.

Among the 56 deals, Kensington accounted for 14.3%, the highest proportion among any London areas. In the same period of 2019, Mayfair had the highest proportion at 24.6%.

Knight Frank Malaysia associate director for international residential project marketing Dominic Heaton-Watson noted that the higher transactions in London’s super-prime residential market corresponded with higher levels of enquiries seen from its Malaysia-based clients. 

He added that London remained the top overseas property investment destination for Malaysians, despite concerns over Covid-19, due to the broad-based economy, transparent legal system, culture and heritage as well as world-class education facilities there.

“I have seen Malaysia-based clients become even more focused on their future London property requirements with lockdown perhaps allowing time to re-evaluate and fine-tune their exact criteria.

“The Royal Borough of Kensington and Chelsea has long been a favourite locality for our Malaysia-based clients. It offers a wonderful blend of key characteristics — a prime central location, surrounded by green open spaces, some of the finest restaurants and shops, where Harrods is an all-time favourite, as well as proximity to the best higher education institutions — all this at a discount in pricing on a psf (per square foot) basis compared with its immediate neighbour Mayfair. In today’s climate, this value proposition appeals to savvy Malaysia-based investors,” said Heaton-Watson.

The report also saw increased demand for outdoor spaces following higher transactions in the family house market, especially in areas such as Notting Hill, St John's Wood, Hampstead and Belgravia. Houses accounted for 66% of sales of over £10 million between January and August 2020.

Knight Frank global head of prime sales Paddy Dring said key motivators of capital preservation, the UK education system and cheap debt are unchanged. 

“The trend for more outdoor spaces has benefitted suburban and country markets, but buyers are retaining their London investment for the long term. Prices are robust with single-digit percentage discounts but no more,” he said.

Nevertheless, Knight Frank head of UK residential research Tom Bill reckoned that the final quarter of the year will be marked by uncertainty as the UK government seeks to contain the Covid-19 pandemic.

“Brexit and the US election will have an impact on currency movements but relaxation of travel restrictions will be the key factor affecting transaction volumes,” he added.