Demand is returning to the prime property market in London
Demand is rising from buyers in the prime property market in central London but prices are still down 5.1% compared with February 2018 and down 1.3% quarter on quarter, according to the latest data to be published.
The report from real estate firm Knight Frank shows that month on month the fall was just 0.4% and in outer London it was 0.2% with this sector seeing a quarterly fall of 1% and annual fall of 4.6%.
At the same time, the number of new prospective buyers registering in both markets increased 6.3% in the year to February 2019. ‘Although activity levels have fallen due to political uncertainty, underlying demand has strengthened as potential buyers respond to price adjustments,’ said Tom Bill, head of London residential research at Knight Frank.
‘The number of new properties listed for sale has declined in recent months as a result of Brexit related political uncertainty. The imbalance between the current strength of demand versus supply indicates the potential for upwards pressure on prices and activity once political uncertainty recedes,’ he explained.
‘Though there are fewer properties on the market, the number of offers being submitted is increasing as pent-up demand builds. Despite stronger underlying demand, weaker overall economic sentiment means some buyers and sellers remain hesitant,’ he added.
The report also shows that the number of offers rose 7.5% in the year to February 2019 but it points out that the number of exchanges in prime central London declined 14% in the year to February 2019, LonRes data shows.
A breakdown of the figures shows that year on year prices in prime outer London fell by 4.4% in the market up to £1 million, fell by 4.7% in the £1 million to £2 million range , fell by 5.8% in the £2 million to £3 million sector, fell by 4.3% in the £3 million to £4 million market, fell by 6.5% in the £4 million to £5 million range but by just 1.8% in the £5 million plus sector.
In prime inner London prices fell by 6.5% year on year under £1 million, by 0.3% in £1 million to £2 million sector, by 0.2% in £2 million to £5 million range, by 0.2% in the £5 million to £10 million sector and by just 0.1% in the £10 million plus sector.