The London property market is more split than it has been since Brexit, says Knight frank.
Average prices fell 3% in prime central London (PCL) in the year to July due to doubts around the government’s treatment of wealthy foreign investors.
Meanwhile, there was an increase of 0.6% in prime outer London (POL), in a market largely driven by domestic buyers moving due to changes in their personal circumstances. The last time the gap was wider was in 2017, when prices in central London were correcting after the EU vote in June 2016.
The average number of exchanges in south-west London in the first seven months of this year was 1% below the five-year average. In prime central London, the equivalent decline was 10%.
Average prices in PCL are 20% below their last peak in August 2015, which compares to an equivalent decline in POL of 7% since mid-2016.
There were 6.7 new buyers for every new sales instruction in July in PCL and POL, which was lower than a figure of 7 last July, but it’s an improvement on 5.1 in April.
Meanwhile in the lettings market demand from the corporate relocation sector in London and the surrounding area has held firm – the number of enquiries in the first seven months of this year from companies looking to send staff to the UK was 8.5% higher than the same period last year.
Knight Frank data shows that average rents in prime central London rose 1.7% in the year to July, which was the strongest increase in a year. In prime outer London, a rise of 1.8% was the strongest since last October.
More landlords are exploring a sale due to the tougher regulatory environment. In addition to the prospect of stricter energy efficiency rules, the Renters’ Rights Bill could make it more onerous to regain possession of a property and raises the risk of void periods. The number of new lettings instructions in the year to July was 9% lower than the previous 12-month period in London.