The variety of sales transactions within the Prime Central London (PCL) market recorded in March was the very best since March 2016, in line with Knight Frank.
The world property consultancy’s newest PCL replace exhibits that whereas the sales market is prospering, rental values proceed to say no.
A spike in sales activity as a results of the vaccination programme and conventional spring buzz is essentially the most important since a surge in demand forward of the introduction of a 3% stamp responsibility surcharge for purchasers of second properties in April 2016.
In Prime Outer London (POL), sales transaction numbers additionally climbed to their highest degree since March 2016.
Average property costs in PCL continued to fall final month (-3.5%), though this was the smallest decline for the reason that begin of the pandemic in 2020.
Knight Frank says costs are falling extra considerably in PCL than in POL because of the disproportionate affect of worldwide journey restrictions.
Typical costs in POL dropped by 1.4% final month, the smallest decline recorded since February 2020 – a month marked by robust demand as a results of the final election lead to December 2019 earlier than the pandemic took maintain.
According to Tom Bill, Knight Frank’s head of UK residential analysis, the complete drive of demand that has constructed up during the last yr will not be felt till worldwide journey restrictions are lifted.
In the lettings sector, common rents in PCL declined by 14.3% within the yr to March. This continues a sample established over the course of the pandemic, says Knight Frank.
Its analysis suggests rental worth declines are bottoming out after the smallest increment within the annual decline for the reason that begin of the pandemic, widening from 14.1% in February.
In POL, common rents fell by 11.4% final month, in comparison with 11.7% in February. This was the primary time the annual decline shrunk since February final yr.
Demand for rental houses grew sooner than provide in PCL throughout March – the primary time this has occurred since November 2019.
The variety of new potential tenants elevated by 167% in March when put next with the identical month final yr, whereas market valuation value determinations rose by 127% over the identical interval.
New tenancies being granted stays robust, the company says, with the determine recorded throughout London and the Home Counties final month 28% greater than in March 2020.
Knight Frank means that many tenants are profiting from falling lease to maneuver someplace which gives a greater work/life stability in a central space.
“As the UK continues to unlock the economic system and other people take staycations, the flood of short-let properties that got here onto the long-let market will start to recede and rental worth declines will finally reverse,” says Bill.
“Question marks stay round worldwide journey, which impacts the demand aspect of the equation, though guidelines ought to begin to ease from subsequent month.”
