Knight Frank: March was ‘drama-free’ for the property market

There was little sign of a major spring bounce in March for prime London markets, Knight Frank analysis suggests, which the agent argues is positive for the sector.

Knight Frank has claimed that the market was “reassuringly uneventful,” which it argued is a good thing compared with recent years.

In March 2023, average prices in prime central London (PCL) were just 1% lower than three years ago, when the pandemic first struck. 

Over the past 12 months, the movement has been even smaller at 0.5%.

It has been slightly more eventful in prime outer London (POL), with average prices in March 2.4% higher than a year ago after a flat six months, the agent said.

It’s not only prices that have been subdued. The number of sales in the year to February was only 1.8% higher than the previous 12 months, Knight Frank data shows. 

Meanwhile, new prospective buyers were up by 3%, the number of offers made was down by the same amount and viewings were 5% lower. 

The one real change was supply, with the number of sales instructions 22% higher. This return to more normal stock levels after the tight conditions of the pandemic partly was also seen as a reason why annual price growth is flat compared to being up 2.1% a year ago.

The agent is still forecasting a 3% price decline in PCL this year and a 4% drop in prime outer London before a return to modest single-digit growth but adds that there are other factors driving the market such as the return of international travel, the currency discount and the higher percentage of cash buyers at a time when mortgage rates are notably higher than a year ago.

Tom Bill, head of UK residential research for Knight Frank, said: “Stability enables buyers and sellers to plan, though these balanced conditions won’t last forever. 

“As the economy performs better than expected and the UK looks likely to avoid a recession, politics is the arena where risks may proliferate over the next 12 months.  A General Election must take place no later than January 2025 and if the taxation of wealth and property becomes a live issue, expect more dramatic movements in prime London postcodes. For now, some will be reassured by the current period of uneventfulness and take it as an opportunity to act.”