The political certainty generated by the General Election result only briefly reignited the prime central London property sales market, says Knight Frank, which during December recorded its highest number of exchanges since March 2016.

But this was followed by a bounce in another direction – a decline in January.

Also, the ‘Boris Bounce’ was observed among buyers rather than sellers in London’s prime property markets. While the number of new prospective buyers rose 37% in the year to January compared to previous 12 months, the number of new sales listings fell by a quarter.

Knight Frank says that it expects that this imbalance will continue to put upwards pressure on prices.

SALES

The percentage of buyers from the financial services sector buying homes in prime central London above £2m rose in 2019. Tom Bill, Head of London Residential Research said, “Workers from banking, insurance and associated sectors accounted for 34% of sales, the highest figure since 2013, indicating how any uncertainty since the EU referendum surrounding London’s role as a global financial centre is receding.”

LETTINGS

Demand in the prime London lettings market continues to rise in relation to supply, which is putting upwards pressure on rental values. There was an average of 8.4 viewings per new listing in 2019, the highest ratio for more than ten years.

• The ratio of prospective tenants to new listings was 6.1 last year, compared to an average of 3.7 since 2007.
• The combination of declining supply and rising demand means that rental value growth is strengthening. Average rental values increase by 0.9% in the year to February in both prime central and prime outer London. It was the highest annual increase since October 2015.
• The number of tenants renewing their lease has risen as the supply of new lettings properties has become more constrained. Tom Bill, Head of London Residential Research said, “Renewals were 23% higher in 2019 than 2016, a trend driven by tax changes for landlords, which has squeezed supply, and uncertainty surrounding price growth in the sales market, meaning fewer tenants have become buyers.”

Read more about the Boris bounce.