The prospect of a general election will bolster demand in the capital’s high-value lettings market this year. But the best way to describe the performance of the high-value London property market in recent years would be ‘reassuringly uneventful’.
Buyers and sellers in prime central London (PCL) have lived through a global pandemic, a stamp duty holiday and the fact five-year fixed-rate mortgages quadrupled in the two years to July 2023.
PRICES GREW 0.7%
The result? In the three years to December, average prices grew 0.7%, reflecting how successive lockdowns and international travel restrictions took their toll. Over the same period, the Nationwide UK index increased by 12%.
However, relatively flat prices mean more owners have chosen to rent out their property rather than sell, which has driven up the number of so-called super-prime tenancies.
These are classified as tenancies above £5,000 per week in central and north London and higher than £15,000 per month in south-west London. The number carried out by Knight Frank rose 10% to 108 in 2023 from 98 in 2022. The figure in 2021 was 81.
How much more flexible are owners of prime or super-prime properties? Well, our own data shows that the number of new listings above £1,000 per week in London increased by 30% in 2023 compared to the previous year. Below £1,000 per week, there was an equivalent rise of just 0.5%.
On the other side of the equation, uncertainty surrounding the general election will support demand this year.
Should Labour win power, they have pledged to overhaul the non-dom tax regime as well increase the surcharge for overseas buyers of residential property. Both represent risks for the prime central London sales market.
Prices in PCL