Knight Frank’s latest research shows a mixed picture for the most expensive areas of the capital. Houses prices are down but the number of lettings available is rising.

1. Property Prices:

• In the heart of London (known as ‘prime central London’), house prices have fallen by 0.9% over the past year.
• A bit further out (referred to as ‘prime outer London’), they’ve fallen by 0.2%.

2. Property Sales:

• More homes are being sold in London compared to the past five years.
• London is doing better in terms of sales compared to other parts of the UK.

3. Renting in London:

• There are more properties available to rent now, with a significant increase in the number of homes coming to the market.
• Rents have been increasing, but not as quickly as last year.

Deeper Dive:

Why are the London prices and sales behaving this way?

• While house prices in many parts of the UK rose because people wanted more space and green areas during the pandemic, London prices remained relatively steady. This stability now makes it seem like London is doing better than other parts.
• Knightsbridge, which has many flats and was affected by travel restrictions, saw an increase in its house prices by 3.3%.

What’s happening in the rental market?

• The number of properties available for rent is going up. There were 18% more rental properties listed in July compared to the same month last year.
• Despite more properties being available, rents have still been going up. In the heart of London, rents rose by 13.7% in the past year. This might sound like a lot, but last April, they increased by almost 30%.
• For a broader perspective, consider this: rents in central London grew by 15.6% in the ten years before the pandemic. So, a 13.7% rise in just one year is significant.
• In outer London, the increase is also notable: rents rose by 12% in the past year, compared to an 11% rise over the previous decade.

What’s likely to happen next?

• As more rental properties come onto the market, this could slow down the rise in rents. However, demand for rentals is still high, especially in the summer. So, for now, rents might keep increasing, but perhaps at a slower pace.

In a nutshell: Property prices in London have seen a slight drop, but sales are up. In the rental market, there are more properties available, and rents have been rising, but they might stabilize as more properties are listed.