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Return of super-rich to central London fuels house price surge

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The return of the international super-rich to London amid the easing of coronavirus pandemic restrictions has fuelled the highest annual growth in property prices in the capital’s most expensive district since 2015.

Average home prices in “prime central London” – which stretches from Chelsea to Camden and Notting Hill to Westminster – have risen by 1.1% since the start of the year, according to research by the estate agent Knight Frank.

It said prices had risen consecutively each month for the past six months “something last achieved before the Brexit referendum in 2016”.

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Tom Bill, Knight Frank’s head of UK research, said the jump in demand for luxury London housing was mostly being driven by the return of rich overseas buyers as coronavirus lockdowns and travel restrictions lift.

“It’s the gradual return back to normality,” Bill said. “People from all over the world are coming back to London, people from the Middle East, Europe, the same roster of countries you would expect. They are back in London in much greater numbers and looking for homes, but there is uncertainty about rising Covid case rates.

“There is a sense that buyers who put everything on hold, are coming back on the path to buying.”

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The number of new prospective buyers registering in London in October was 56% higher than the same month a year earlier.

“We are not on the verge of the sort of dramatic double-digit bounceback in prices seen after the collapse of Lehman Brothers in 2008,” Bill said. “But the prime London property market is resuming an overdue recovery that was interrupted by the pandemic.”

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Rupert des Forges, Knight Frank’s head of prime central London developments, said: “The pandemic has not altered London’s status as a global safe haven.”

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He said members of the international jet-set elite were buying new-build properties as well as characterful older houses. “West End developers have received over £250m of offers in the W1 postcode alone in the last month,” he said.

The agents said rich people’s desire to “escape to the country” during the height of the pandemic had “left some central London bargains in its wake” which were now being picked up.

Last summer agents reported surging sales of remote vast country estates and former castle properties, which until Covid-19 struck had become increasingly hard to shift.

Savills, which has 320 staff in a unit dedicated to such estates, said it had sold 21 estates valued at £15m-plus in a nine-month period. For comparison, just one such property sold in the whole of 2019.