Residential prices are continuing to fall in prime property markets in London but an upturn is expected once Brexit uncertainty dissipates, according to the latest sector analysis report.
Prices in the prime London markets fell by 4.8% in the 12 months to February 2019, and were down by 1.4% quarter on quarter and down 0.4% month on month, according to the Knight Frank prime sales index.
However, the report points out that the number of prospective buyers registered in London continues to climb. ‘Despite the number of exchanges declining as a product of Brexit uncertainty, this growing pent-up demand suggests activity levels will increase as political clarity returns,’ said Tom Bill, head of London residential research at Knight Frank.
He also pointed out that the ratio of new prospective buyers versus new supply rose to an all-time high in January at 9.1, compared to 5.9 the previous year. ‘This result suggests the possibility that a current downwards trajectory in sales volumes in prime London markets may reverse in the coming months,’ he explained.
A number of sales in recent months above £30 million in London boosted the overall value of £10 million-plus transactions in December and January. Sales in this price bracket accounted for 75% of exchanges above £10 million by value in January.
Bill said that the reasons for this stronger performance include the favourable exchange rate, price reductions and buyers who are able to see beyond short term political uncertainty and see the long term appeal of living in London.
‘For the same reasons, prices above £10 million have declined at the most modest rate in recent months in prime central London,’ he added.