New demand for prime London properties is expected to put
pressure on house prices in high-end parts of the capital, according to the
latest Prime London Sales Index from Knight Frank, which covers December 2018.
The property firm found that the average house price in
prime central London fell by 4.4% in the year to December, compared to a
decline of 4.8% in prime outer London.
On a monthly basis, property values were down by an average
of 0.5% between November and December in prime central London, while prime
outer London saw a greater month-on-month decrease of 1.8%.
Over the quarter, however, prime central London recorded a
fall of 1.7%, while prime outer London experienced a decline of 0.6%.
Knight Frank also reports that new demand for prime London
properties continues to rise in relation to new supply. The number of new
prospective buyers per new property listing rose in the second half of last
year, which could put upwards pressure on prices, once the current political
Although property sales volumes dropped over the course of
2018, the number of new prospective buyers rose in the last few months of the
year, and was 8% higher in November than in January 2017. This divergence
suggests that pent-up demand is forming, the firm believes.
As asking prices increasingly reflect higher transaction
costs, prospective buyers are submitting offers in greater numbers, Knight
Frank claims. In November 2018, the number of offers made per office exceeded
the figure recorded in the same month four years ago, ahead of the hike in
Stamp Duty on £1m+ properties.
Asking prices for £20m+ homes in prime central London
adjusted more quickly to higher transaction costs, the report explains. Combined
with the recent weakness of sterling, this drove rising activity in the £20m+
London market in the second half of last year.
Employment figures for the capital paint a resilient picture
of London’s economy, which Knight Frank expects to underpin demand in the prime
sales and lettings markets. The number of people in employment in the capital
reached a record figure of 4.8m in August 2018.
Has your interest in prime London properties accelerated of
late? It may be wise to secure a deal before prices rise!