Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Knight Frank Warns of Uncertainty in London’s Prime Property Market

Knight Frank has warned that London’s prime property market faces another summer of uncertainty, as speculation grows over possible tax changes under a potential Burnham government. The agency highlights that questions about Andy Burnham’s plans if he becomes Prime Minister could impact market sentiment.

Average prices in prime central London fell by 3.6% in the year to June, with no change from the previous month, according to Knight Frank. Transaction volumes in this segment were 14% lower in the year to June compared to the previous 12 months, and the number of offers submitted dropped by 4%.

In contrast, the prime outer London market showed more resilience. Prices there fell by 0.4% annually, transactions declined by 7%, but the number of offers increased by 5%.

Knight Frank’s head of UK residential research, Tom Bill, noted that Andy Burnham’s recent speech as Prime Minister-in-waiting was “light on detail” and that current plans affecting the property market may include aligning capital gains and income tax, introducing a land value tax to replace stamp duty and council tax, and launching a large-scale social housebuilding programme. Bill also mentioned questions around devolved tax-raising powers.

Bill cautioned that it would be premature to view Burnham’s comments as more than a wish list, especially given Labour’s manifesto plan to build 1.5 million homes. He added that the prime London property market is likely to face another summer of speculation ahead of the autumn Budget, and suggested there could be a repeat of last year’s approach of smaller, wealth-based tax rises, such as higher-value council tax.

For letting agents and inventory clerks, these market trends and ongoing uncertainty may influence activity levels and client decision-making in the coming months.