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.
Prime London Market Activity Rises Amid Stable Backdrop
The prime London property market has seen improved activity over the past year as economic conditions have stabilised, according to data from Knight Frank. The number of property transactions across London was 14% higher in the three months to July compared to the previous year, with a 3% increase in prime central London (PCL).
Knight Frank reports that activity was subdued last year due to factors such as the introduction of trade tariffs, changes to non-dom status, and speculation around property taxation. However, the economic backdrop has been quieter this year. New high-value council tax rates announced in November were not as severe as anticipated, which allowed buyers to make plans after the Christmas period.
The number of offers made in both prime central and prime outer London by March was 8% higher than the previous year, leading to increased market activity during the summer. Despite this, exchanges in both London and PCL were 7% lower over the last three months. When compared to the five-year average, exchanges are down 6% in London and 15% in PCL. Knight Frank notes that these figures are affected by previous stamp duty changes and mortgage rate adjustments since 2022.
Average prices in prime central London have fallen by 23% since their peak in mid-2015, following a series of tax increases and political uncertainty. In the year to July, average prices in PCL dropped by 3.3%, marking the 39th consecutive month of annual declines. Prices rose modestly over the two years to April 2023, but this followed a prolonged period of declines from June 2016. Prices in prime outer London have remained steadier.
For letting agents and inventory clerks, these trends indicate a more active market environment in prime London, with increased offers and transactions, but continued downward pressure on prices in prime central areas.
Source: Mortgage Strategy