Is London’s housing market faltering?

Prime Central London has always been viewed as safe. It has some major plus points for the world’s wealthy – it’s on the Greenwich Meridian so can trade East and West, is an island considered geographically safe and geo-politically stable. Wherever you lived in the world you could stash a considerable portion of your wealth in this safe haven with the added bonus that, if a downturn were to grip your own country, you can relocate to London.

The relative global stability of the last decade has led to empty properties. The heart went out of Prime Central London years ago. One block north and south of the Kings Road exhibits some semblance of the old days but the street itself now resembles a kind of upmarket shopping mall with precious little individuality. The market here has stagnated over the last few years with movement in an out strangled by new asset taxes and changes to stamp duty.

But is the area on the cusp of a sea change? The swift introduction of wealth orders and sanctions on many of the area's oligarchs is likely to make investors think again about using London as a safe haven for wealth. I’m not here to argue about whether the politics are right or wrong. I'm simply observing how it will impact the central London market.

Wealthy buyers don’t move into Chelsea or Kensington looking for space but to show off their address. This means that a drop in demand permeates every layer of the market and heightens the ripple effect elsewhere: if the top end starts to falter the consequences will be felt lower down.

Looking at publicly available properties in the £10 – £30 million range more than 20 per cent have seen their prices reduced and almost 50 per cent have been on the market for over a year. This would seem to imply that there is some turbulence brewing. Many deals at this level are done off market but anecdotally there have been deals done at below asking price.

Those I spoke to in a market I know well point out that the list of other places for the super-rich to live safely are limited, which is true, and London’s highly unusual mix of politics and stability remains unmatched.

There is the potential for everyone in London, and beyond, to be affected by any price falls in Prime Central London – I would expect to see falls matched in the immediate area surrounding prime areas. And we’re still some way from understanding who, if anyone, will prop up the market. Hundreds of thousands of Hong Kong residents have said they want to move here, and the sheer number of wealthy Chinese may yet come to Prime Central London's rescue, but ignore changes to that market at your peril.