“What they say they are looking for and what they end up buying is often completely different,” de Keyzer says.
Sticker Shock
Even billionaires, it seems, develop sticker shock in this town. Many who begin their search saying they don’t want to do major renovations wind up taking on fixer-uppers in order to get more house for their money. (Not Russians. “Russians seem to need to move out of Russia quickly,” he says.)
For brokers, London super-prime is a tiny club. Savills typically competes for listings with just five other firms: Aylesford International, Chesterton Humberts, Hamptons International, Sotheby’s and Knight Frank. Brokers make a standard commission of 1.5 to 2.5 percent, which at these prices can be a fortune in its own right.
In March, Savills sold 1 Cornwall Terrace on London’s Regent’s Park for £80 million, the most expensive sale so far this year, earning the brokerage at least £1.2 million. Given the steep price gains since the financial crisis, some worry that London’s super-prime market is a bubble poised to pop.
“It is difficult to say whether it’s a bubble because people are not buying on traditional investment metrics,” says Griffith of the Institute for Public Policy Research.
Knight Frank’s Wright insists that any froth in the market has already dissipated -- and that, perverse as it may sound, today’s super-prime buyers want “value,” even at these stratospheric prices.
“They will not overpay,” Wright says. “If you price a property at £30 million when it should be £25 million, you don’t sell it in a hurry.”