Knight Frank: Buyers are hesitant but haven't disappeared

Buyers are hesitant but haven’t disappeared form the prime London market, Knight Frank claims.

The agent’s latest prime London property report shows that the number of new prospective buyers in London was still 26% above the five-year average in November when excluding 2020.

However, the number of offers made was 17% lower, while  the number of new sales instructions was 5% higher.

Tom Bill, head of UK residential research at Knight Frank, said: “The figures point to the understandable anxiety felt by buyers but don’t show a notable fall in demand. In other words, buyers are hesitant but haven’t disappeared.”

The analysis highlights that mortgage rates have started dropping as swap rates return to where they were before the disastrous mini-Budget.

Bill added: “We expect mortgage rates to edge down as lenders increasingly price mortgages based on lower swap rates.

“Prime London markets are more protected from this financial pain, but they are not immune.

“Prime central London, in particular, benefits from a higher percentage of cash buyers than prime outer London, which will underpin demand and prices.

“For example, activity in the £10m-plus super-prime market is currently robust.”

“In the wider prime market in London, demand is still relatively strong, but the recent mortgage market volatility has led to fewer offers being made.”

The report also showed that prices in prime London postcodes dipped for the second consecutive month, mirroring the wider UK market. 

Average prices in prime Central London fell 0.2% in November, taking the annual change to 1.7%. 

In prime outer London, the decline was 0.1%, which produced an annual increase of 4.6%.