Strong Demand in Prime London Property Market, Reports Knight Frank

According to the latest sales report by Knight Frank, the demand in the prime London property market remains robust, signaling a recovery from the challenging period following the mini-Budget. In May 2023, the number of new prospective buyers for the year's first four months exceeded the five-year average (excluding 2020) by 35%.

Supply in the market also shows signs of improvement, with a 16% increase in sales instructions over the same period. This boost in supply has contributed to an 8% rise in the number of property exchanges.

Knight Frank attributes the positive trend in the prime London market to several factors. The return of international travel and a relatively weak pound have all played a role in attracting buyers. Additionally, higher cash sales, housing equity, and affluence have provided some immunity to the volatility in mortgage rates that followed the mini-Budget.

Surprisingly, lower-value markets are performing better than expected, despite mortgage rates being more than double the levels of two years ago. Knight Frank points to a strong jobs market, accumulated lockdown savings, and adjusted price expectations as factors contributing to the resilience of these markets.

The report highlights a decline in new prospective buyers outside the capital, which decreased by 7% over the same period in 2023. Viewings were also 9% lower, indicating a slowdown in the "race for space" trend.

The findings from Knight Frank's report demonstrate the ongoing attractiveness and resilience of the prime London property market, with positive signs of recovery and increased buyer activity.