London’s prime property market saw a rise in activity at the higher end of the sector in the second half of 2018 as demand continued to increase, the latest analysis shows.
But overall prices are still down. They fell by 0.5% month on month in December in the central London market and by 0.5% in the prime outer London property market, according to the report from real estate firm Knight Frank.
Quarter on quarter prices fell by 1.7% in central London and by 1.8% in outer London while year on year prices were down by 4.4% and 4.8% respectively.
But the report points out that demand for prime central London property has continued to rise in relation to new supply.
Indeed, the number of new prospective buyers increased by 8% in November from January 2017, in despite of a sales volume decline over the course of 2018.
According to Tom Bill, head of London residential research at Knight Frank, the figures suggest pent-up demand is forming. ‘As asking prices increasingly reflect higher transaction costs, prospective buyers are submitting offers in greater numbers,’ he said.
Bill pointed out that in November 2018 the number of offers made per office exceeded the figure recorded in the same month four years ago, ahead of a hike to stamp duty for £1 million plus properties.
‘Asking prices for £20 million plus properties in prime central London adjusted more quickly to higher transaction costs. Combined with the recent weakness of sterling, this has driven rising activity in the £20 million plus London market in the second half of this year,’ he explained.
‘The number of people in employment in London reached a record figure of 4.8 million in August this year. Employment figures for London paint a similarly resilient picture of the economy in the capital, which will underpin demand in prime sales and lettings markets,’ he added.
