Knight Frank’s latest figures on London’s property market show a 12-month spend of £2.8bn – the highest amount in seven years.
The total from the year to October 2022 suggests a boost from pent-up demand built during the pandemic and a period of uncertainty following Brexit, Knight Frank said.
“Brexit made buyers hesitate and Covid forced them to stay at home, so frustrated demand is still working its way through the system,” said Paddy Dring, global head of prime sales at Knight Frank.
“However, other risks are now on the horizon, including rising mortgage rates and speculation that house prices will fall. It can lead to expectation gaps, however marginal, between what buyers and sellers perceive as fair value.”
There were 152 super-prime sales in the year to October 2022, according to whole-market data. This figure was down slightly on the previous 12 months (159), although Knight Frank noted that it could rise as Land Registry records update.
The agency said it expects average prices in the second-hand market in prime central London (PCL) to fall by 3% next year, taking them back to the level of January this year. It also predicted that prices would rise by 7.5% in the five years to 2026 in PCL.
Several high-quality new-build developments have pushed activity between £20m and £30m to a six-year high, according to Rupert des Forges, head of prime central London developments at Knight Frank. There was a total of 31 sales between £20m and £30m in the year to October 2022.
“London remains a focus for high-net-worth individuals as a relatively safe haven due to global political and economic uncertainty as well as the attraction of a weak pound,” said Des Forges.
“October was the strongest month on record in terms of business transacted by our PCL development team. The supply of large spaces in the West End is now reduced, and an apartment over 300 square metres is increasingly difficult to secure.”