The precarious state of London’s luxury housing market

One of the really interesting things to come out of the Knight Frank report I mention in my post below is just how few houses worth over £2m there are in the UK.

According to the report, there are a total of around 50,000 (it is obviously impossible to be accurate). In Kensington & Chelsea and Westminster combined there are a total of 20,000.

Look at these numbers and it is suddenly a whole lot easier to understand how the foreign buying of central London over the last few years has managed to move prices quite as much as it has. It is also quite easy to see how only a small drop in demand (perhaps as emerging-market currencies keep falling), or a seemingly small rise in supply unmatched by a rise in demand could stop them rising.

Note that there are not much more than 4,000 dwellings in Mayfair, but there are another 400 planned. That’s a 10% rise. More on the rise in supply of London housing here.

• For those of you interested in London house prices and stats, there is the latest GLA report. Charts galore.