Wealthiest Buyers Undeterred by Tax on Prime London Luxury Properties

Wealthiest Buyers Undeterred by Tax on Prime London Luxury Properties

Islay Robinson

Prime London’s most expensive homes will outperform the rest of the U.K. residential real estate market this year as wealthy buyers shrug off property-tax increases, Knight Frank LLP said.

Prices in the super-prime market of London luxury properties and apartments costing 10 million pounds ($16 million) or more will climb as much as 5 percent this year, the London-based broker estimates. Values gained 6.9 percent last year as buyers competed for fewer properties.

“Stock in this segment is very limited,” Liam Bailey, Knight Frank’s head of residential research, said. “The population of very wealthy potential buyers has been rising strongly over the past two years and looks set to rise into 2013.”

London’s high-end properties are attracting investors seeking assets that have appreciated during Europe’s sovereign debt crisis and the Middle East’s economic and political turmoil. While price gains are slowing for homes costing an average of 3.7 million pounds, which Knight Frank defines as luxury properties, demand for super-prime London properties hasn’t abated, Bailey said.

There were 98 deals valued at 10 million pounds or more in the nine months through September, up from 94 a year earlier and 74 in 2010, according to data compiled by the firm.