One of the UK’s most prestigious agencies claims that deals to buy the country’s dearest homes have been negotiated using asset-backed ‘billionaire mortgages’ and are investments rather than owner-occupied homes.
Beauchamp Estates say that the UK’s relatively low interest rates have enabled most of London’s super-prime property deals over the last two years to be transacted using the asset-backed “billionaire mortgages”.
Using other assets or company shares as collateral, these mortgages are typically 30-year term interest-only loans, with a preferential one to 2.5 per cent interest rate, often up to 100 per cent of the value of the property.
These terms result in the mortgages not having to be paid-off unless the home is sold, or if the property is inherited the next generation can enjoy a comparable loan. The money saved can then be used for other investment opportunities.
Beauchamp Estates says a total of 49 sales of luxury properties priced over £15m have taken place during Covid - 32 sales in 2021 compared to 17 sales in 2020.
The agency says that the surge is due to the huge accumulation of wealth that billionaires have enjoyed over the last 12 months combined with the availability of highly advantageous interest-only “billionaire mortgages”.
The deals show that super rich buyers are looking for London mansions and grand townhouses providing no less than 10,000 square feet of living space, and in some cases upwards of 30,000 square feet of accommodation, complete with gardens and 6,000 square feet plus penthouses with private roofterraces.
The Beauchamp Estates survey reveals that between January 2020 and December 2021 there have 49 sales of PCL homes priced above £15m – over £1.29 billion worth of property sold – with 2021 accounting for £773m worth of sales, significantly up on 2020.
Over the last two years London’s super rich homes deals have achieved £3,221 per square feet on average with the highest in 2021 hitting a reported record £11,000.
Over the last two years the SW1 postcode (Belgravia followed by Knightsbridge) has been London’s top address for super-prime sales, accounting for 14 deals, followed by the W1 postcode (Mayfair) with 10 deals.
Beauchamp sold a £21m duplex and mews on Eaton Square to an American billionaire and a £45m townhouse on Grosvenor Crescent to a Hong Kong billionaire.
Beauchamp Estates says that the top-five super-prime buyers ranked by country of origin are Chinese billionaires, followed by Indians, then American billionaires, Russians, and domestic UK buyers. Other significant buyers include multi-millionaires from Africa (Nigeria, South Africa and other mineral resource rich states).
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