"Uber-prime" real estate still hot in London
LONDON (Reuters) - London's housing market may be cooling, but not when it comes to 10-bedroom mansions with designer interiors, indoor swimming pools and private gardens in the capital's most sought-after neighborhoods.
Demand for these homes -- known as the "super-" or even "uber-prime" slice of the market and typically priced upwards of 20 million ($37 million) pounds -- is still far ahead of supply.
And, fuelled by oil and commodity prices which are adding to the wealth of emerging market millionaires, the appetite is showing no sign of slowing under the weight of the credit crunch that is crippling average homeowners, lenders and businesses.
Eliza Leigh, a partner at estate agent Knight Frank, said the company in early July launched a flat for Grosvenor, the firm which manages the Duke of Westminster's property estate.
"In the first 48 hours, we generated 18 viewings for a property with a 25 million pound guide price," she said.
"We achieved that by close of business on Tuesday, having launched at 9 a.m. on Monday, and that purchaser exchanged contracts by Friday."
Analysts expect UK house prices to tumble at least 20 percent from their peak as a decade-long boom turns to bust. The majority of agents say business has ground to a halt and even the so-called "prime" market -- roughly, homes between around one million and 10 million pounds -- has slowed as once spendthrift bankers and executives draw back.
But "super-prime" is blossoming, helped by London's enduring popularity and -- critically -- by a lack of properties at the very top end. There are few coveted addresses and even fewer families moving out.
According to estate agent Savills, the number of sales in the 5 million to 10 million pound bracket in the first six months of this year increased only nominally, compared with a 15-20 percent rise for 10 million to 20 million pound deals.
Above 20 million pounds, however, deals are up 200 percent and now represent more than 10 percent of the ultra high-end properties sold -- up from just 5 percent a year ago, when demand was concentrated at the lower end of the prime scale.
Purchases continue to make headlines -- in July, developer Marcus Cooper sold London's second biggest house -- a 25-bedroom mansion dwarfed only by Buckingham Palace -- to an undisclosed buyer for 50 million pounds, almost twice the price paid last year.
"There has been a dramatic change. What we are seeing is a very limited supply of houses and people who come into the market happy to spend 20, 50, 100 million pounds," said Jonathan Hewlett, Savills' director for top-end London sales.
"They find it mind-blowing that they can't find anything."
CASH IS KING
Demand for the lower end of the prime market has historically come from London's City, but that has slowed as both the economy and bankers' bonus expectations cool. Continued...
Obama makes first pitch at All-Stars
