‘Stars aligning’ for supply and demand in prime London markets

New data suggests the prime London market has a new lease of life as buyers and sellers look to beat the expected economic slowdown.

Figures from Knight Frank show that the number of offers accepted in May hit the highest level for a decade.

Additionally, the number of new prospective buyers registering in London last month was the third highest figure in a decade, while the number of new sales instructions was the sixth highest figure in 10 years.

Prices in prime central London also rose 2.4% in the year to May, which was the highest rate of annual growth since April 2015, Knight Frank said.

In prime outer London, prices increased 4.8% annually, which was also the highest rate of annual growth in more than seven years, according to the agent.

Although there will be a lag before sales numbers also rise, Knight Frank said May was the tenth highest month in a decade for exchanges when the impact of stamp duty holidays is removed.

Knight Frank has previously predicted that supply is finally picking up as the economic warnings mount, mortgage rates climb and owners sense prices may be peaking. 

Tom Bill, head of UK residential research at Knight Frank, said: “The stars are aligning for buyers and sellers in the London property market, with supply increasingly able to keep pace with robust demand,” 

“For those wondering when this period of strong activity will end, it’s likely to last longer inside zone 1 due to the recession-proof qualities of prime central London and the fact a longer-term recovery is underway.”

Andrew Groocock, head of sales for Knight Frank’s City, east and north region in London, described market conditions as the perfect storm.

He said: “Our London sales pipeline is the biggest it has ever been and even exceeds the most frenetic periods of the stamp duty holiday.”