London mansion prices fall as number of properties for sale booms

Britain’s most expensive homes got cheaper this year as more central London mansions and super-prime apartments sported "for sale" signs.

The average value of homes sold for at least £10m (€12.7m) in London’s most expensive neighbourhoods was £2,757 a square foot in the first eight months, according to estate agent Huntly Hooper. That was 7.4% lower than the record of £2,978 set in 2013. Prices for other homes in prime central London rose.

“Whilst there are record sales being achieved, buyers should not be swayed by headlines suggesting there is a boom in average pricing,” Huntly Hooper director Oliver Hooper said.

More homes for sale in Notting Hill and Holland Park have climbed into the top tier of London pricing. Prices for super-prime properties have increased by at least 13 percentage points less than every other part of the prime central London market since 2009.

There were 66 transactions this year up to the end of August compared with 92 for all of last year.

Prime central London includes districts such as Mayfair, and Chelsea.

The number of central London homes offered for sale for over £10m increased by 165% from 2009 to 2013, the report found.

Possible tax increases on expensive homes, such as the Labour Party’s planned “mansion tax,” haven’t diminished demand in the market based on the number of sales, the report said. It plans to raise £1.2bn from a tax on homes valued at more than £2m if it gets into power after next year’s national election.

Average home values in all of London rose about 0.1% in the three months through September from the previous quarter, agents Douglas & Gordon said yesterday.

“Persuading a buyer to spend rather than just look is proving more difficult than it has for at least five years,” for homes costing more than £2m, sales director George Franks said.