London is moving on from the chaos sparked by last fall’s mini-budget as the city’s luxury housing market is seeing a boost in both supply and demand, according to a report from Knight Frank. Prime London saw robust demand during the first four months of the year, with the number of new prospective buyers 35% higher than the five-year average, 2020 aside, according to the report.
Supply in prime London was up as well, with listings 16% higher over the same time frame, and in turn, the number of exchanges were up 8% compared to the five-year average excluding 2020.
The resurgence of demand for luxury properties in the capital has been fueled by the return of international travel, a relatively weak pound and prime central London prices remaining 15% below their mid-2015 peak, according to Knight Frank. Prime outer London prices are down 7% from their peak.
Average prices in prime central London didn’t see much change in a year, falling just 0.1% year over year in May. Prime outer London saw a 1.4% annual increase. Sales activity was strongest in the £5 million-plus (US$6.2 million) bracket, with those sales up 40% during the first four months of the year. Sales below £2 million, on the other hand, declined 3%.
Amid the increase in mortgage rates—now more than double what they were two years ago—the lower-value markets are still performing better than expected, according to the report. London’s suburbs are not experiencing the same level of activity, with prospective buyers down by 7% and viewings down 9% between January and April.
