According to real estate firm Knight Frank, the average number of daily applicants registered in May fell by a third versus the same month last year while stock levels continued their steady climb, which has been seen since the start of the year.
The firm now projects that price growth in the prime central London real estate market will fall to zero next year and there a growing sense the market is pausing for breath. ‘The average number of daily registrations in May was about a third lower than the same month in 2013.
Further evidence of this growing caution in the market comes from data on viewings. The average number of viewings per property undertaken before an offer is made is 70% higher than last year,’ said Tom Bill, Knight Frank’s head of London research.
He pointed out that the reviving fortunes of the rentals market, where rents are now rising and some high value deals have been struck, also suggests demand may soften in the sales market.
‘To some extent, it mirrors what happened in the mainstream market in May. New mortgage, approvals fell for the third consecutive month in April, according to the British Banking Association. Such sensitivity to the pace of price growth has been felt at the top end of the prime central London market for more than a year,’ Bill explained.
‘While it is spreading to lower price brackets, there is no discernible effect yet on the sub £2 million market, where properties are selling quickly and sealed bids are prevalent. In large part thanks to the strength of the sub £2 million market, prices continued to rise in May, by 0.8%, leading to annual growth of 7.8%,’ he added.
However the outlook if flatter for the prime central London property market. ‘With the general election looming next year, which typically creates an air of uncertainty, we are expecting price growth in prime central London to fall to zero in 2015,’ concluded Bill.
