BLOG: ‘Uneventful’ sales market driving super-prime lettings

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.

Lettings Knight frank

Source: Knight Frank

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.

MORE FLEXIBLE

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

The original article can be found here

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