Hedge fund traders were among those who snapped up luxury London homes in multimillion-dollar deals this year, as the ultra-rich shrugged off the UK’s broader housing woes.

Citadel trader Adam Frame, whose company outperformed many of its peers in 2023, purchased a mansion overlooking Primrose Hill for £42.9 million (S$72.1 million) in June. A few months earlier, Olivier Meyohas, director of a Blackstone unit that invests client money in hedge funds, bought a £24.7 million semi-detached house near Chelsea.  

Nina Flohr, daughter of Swiss businessman Thomas Flohr and the wife of Prince Philippos – a hedge fund analyst based in New York and a member of the non-reigning Greek royal family – bought a terraced house in the affluent Knightsbridge neighbourhood for over £30 million in February.

The purchases show how London’s luxury housing market – though hit by negative sector sentiment – has stayed largely insulated from headwinds such as high borrowing costs, as these wealthy buyers are less dependent on debt.

The pound’s weakness against the US dollar and high crude oil prices are also drawing the rich from the US and the Middle East, said Charles McDowell, a broker whose property firm advises wealthy clients on purchasing London homes.

Residential real estate in the city “is seen as a safe haven for global capital” when economic uncertainty and two major wars in Ukraine and Gaza have pummelled alternative investment markets, said Jeremy Gee, managing director at luxury broker Beauchamp Estates.

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Some of the biggest purchases were by wealthy buyers from overseas, with a couple of deals even exceeding £100 million.

Indian billionaire Ravi Ruia bought a £113 million mansion overlooking Regent’s Park this summer. Towards the end of the year, Indian vaccine tycoon Adar Poonawalla agreed to pay about £138 million for a Mayfair mansion he was renting from Polish billionaire Dominika Kulczyk, said a person familiar with the matter.  

Xu Xiaoping, one of China’s most successful angel investors, bought a £38.6 million flat nestled between Green Park and Berkeley Square in June. A few months earlier, Abdulhadi Mana Al-Hajri, owner of the Ritz Hotel and brother-in-law of Qatar’s ruler, purchased a £37.5 million townhouse near Hyde Park.

Iranian-born Behdad Eghbali, founder of Clearlake Capital Group and co-owner of Chelsea Football Club, bought an apartment overlooking Grosvenor Square for roughly £34 million in March.

While such transactions point to a seemingly robust market at the top end, the luxury segment paints a somewhat mixed picture. In London’s most affluent postcodes, sales fell about a third in November from the same period last year, according to researcher LonRes. 

Billionaires and multimillionaires purchased £340 million worth of London homes valued above £15 million between January and June, according to a report by Beauchamp Estates. That’s still lower than the £400 million spent in the first six months of 2022.

Claire Reynolds, managing director of UK Sotheby’s International Realty, said it’s currently a two-tier market, with homes priced above £10 million less vulnerable to worries about interest rates. Sotheby’s helped transact £90 million worth of London property last month alone, with the majority of sales happening in the posh neighbourhoods of Mayfair, Belgravia, and Marylebone.

Sotheby’s launched a palatial £75 million home in Portland Place in December, and Reynolds said four billionaires have registered their interest. “There is a real discretionary buyer base for these trophy assets,” she said. 

McDowell said his European clients have dropped about a third this year, while dollar buyers rose more than 50 per cent. He added that many bankers are looking at other hubs like Frankfurt. His largest deals of the year include two luxury houses – both a short walk from Holland Park – that sold for a combined £75 million. They were snapped up by Americans looking to capitalise on the pound’s weakness, he said. 

The biggest concerns for the rich looking to buy UK property include stamp duty, higher scrutiny into finances and the potential for a Labour Party government at the next election due before January 2025, Beauchamp’s research showed. 

“The uncertainty created by a general election could cause some disruption in 2024,” said Jo Eccles, managing director at buying agent Eccord. 

But there’s reason to cheer, McDowell said. Though deal activity for homes priced above £5 million has slowed from a peak in 2022, it has strengthened towards the end of 2023.

“Vendors waiting to sell may look to next spring as a time when optimism will fully return to the market,” he added. “The top end of the market will continue to be robust next year, because people still see London as a fantastic place to live.” BLOOMBERG