Underlying demand from buyers is helping prime London market recover

Underlying demand from buyers in central London’s prime property sector is trending upward as sellers adjust asking prices to suit the current market, the latest index suggest.

Overall prices in the central London market fell by just 0.2% in June and by 0.8% quarter on quarter. They are now 1.9% below where they were in June 2017, according to the index from real estate firm Knight Frank.

In the prime outer London market prices fell 0.5% month on month, 1.2% on a quarterly basis and were down by 4% year on year, the data also shows.

Tom Bill, head of residential London research at Knight Frank, pointed out that the number of new prospective buyers in prime central London was 31% higher in June than the same month last year.

‘Despite a period of political uncertainty, the upwards trend highlights the strength of underlying demand as asking prices rebase,’ he explained.

The total value of £10 million plus sales in June 2018 was £407 million, the highest monthly total since December 2014. Bill said that it highlights the strength of underlying demand for prime central London property despite a period marked by political uncertainty.

The number of properties withdrawn from sale declined 31% year on year in June. ‘Properties are often withdrawn because buyers will not meet the asking price. The trend suggests asking prices now more fully reflect buyer expectations as higher rates of stamp duty are priced in,’ said Bill.

The data also shows that the number of viewings per office in prime outer London was 18% higher in June than the same month last year. ‘This reflects the resilience of underlying demand and also the fact that price-sensitive buyers are carrying out more viewings before making an offer,’ Bill added.