Wealthy house-hunters spurn Knightsbridge for Chelsea

But buyers are still cautious

Updated: 
'River Thames view with Westminster Bridge, the Houses of Parliament and Big Ben. Wonderful late evening light. See my other Lon

Chelsea has overtaken Knightsbridge as the home of choice for the super-rich - and it's British buyers that are fuelling the boom.

An analysis of last year's London property sales figures by estate agent Russell Simpson shows that Chelsea accounted for 18% of London sales over £6.5 million. This topped Knightsbridge, with 14%, and Kensington, with 12%.

South Kensington followed at 11%, and Notting Hill on 7.5%. Meanwhile, Mayfair accounted for 7% of top-end sales, and Belgravia 4%.

According to the Daily Mail, the big increase in popularity for both Chelsea and Kensington is coming from British house-hunters looking for a family home, with demand from domestic buyers shooting up by 45% last year.

Compare mortgage rates

"We believe the upturn in sales is due to a higher proportion of large family homes available in Kensington and Chelsea, which are favoured by domestic buyers, compared to the West End, which has a higher proportion of flats and smaller apartments, which tend to attract more overseas buyers looking for homes for dependants and pied-a-terre residences," Jake Russell, director at Russell Simpson, tells the paper.

"The leafy districts of Chelsea, Kensington and Notting Hill demonstrate that they are some the most sought after areas for buyers at the top end of the market."

However, while Chelsea may be getting a bigger slice of the super-rich pie, the size of that pie has been falling. The number of sales of high-end properties in central London has slid sharply over the last year.

Indeed, according to prime central London agency WA Ellis, there were only nine sales of top-end properties within the Knightsbridge, Chelsea, Belgravia and Kensington post code areas last month, compared with 25 in January 2014.

Compare mortgage rates

Part of the reason is the recent introduction of a new stamp duty structure which sees buyers of properties over £1 million paying more. And with an election looming, there's also concern about the possibility of a mansion tax being introduced.

"The market within prime central London (PCL) is undergoing one of its periodic 'plateauing' moments as both vendors and purchasers await the result of the most property-centric election that we have ever known," says director Richard Barber.

"Comparing year on year transactions within the same month only provides a snapshot, but the overriding sentiment at the upper end of PCL is undoubtedly one of caution until the political path becomes clearer."

10 property hotspots

10 property hotspots


Read more on AOL Money:
Stamp duty changes 'to benefit 71%'

Chelsea tops 'Premier League property table'

The last affordable place for property in the UK
Rich Russians Buy Up London Property as Ruble Tumbles