The housing market is not immune from the supply shortage hitting the economy, according to Knight Frank - with London the latest location to see a shortage of homes compared with buyers.
The agency says that excluding 2020, the number of new prospective buyers registering in London in the third quarter of this year was 27 per cent above the five-year average. 2020 has been excluded because of the pandemic’s impact.
Also in the third quarter of this year, the number of offers accepted for prime London property was 51 per cent higher and total exchanges were up 10 per cent, Knight Frank data shows. However, on the supply side, the number of new sales instructions was 21 per cent down.
Tom Bill, head of UK residential research at Knight Frank comments: “The re-balancing of supply and demand is proving to be a gradual process. More vendors will come forward as supply builds, meaning it won’t happen overnight. Meanwhile demand is only getting stronger as international travel rules are relaxed.”
The agency insists that even the latest relaxation of quarantine rules for overseas visitors will not trigger a full return to ‘normality’.
“The fact the school year has already started means some overseas buyers will wait until next year. Elsewhere, a number of high net worth individuals are taking advantage of the relaxed travel rules, which is benefitting some markets more than others” says the agency.
For example, the number of new prospective buyers registering in Mayfair and Knightsbridge in September was 11 per cent higher than the same month last year. Meanwhile, across the whole of prime central London, there was an eight per cent decline.
The agency says this underlines how the prime London sales market is returning to normal conditions only one step at a time.