Recent figures from Knight Frank, a reputable UK-based property consultancy, have highlighted a fragility within the Prime London property market.

Against a backdrop of various political and economic uncertainties, the demand for Prime London property has shown signs of being precarious, despite a pause in the Bank of England’s cycle of interest rate increases as of September. This fragility is of importance to potential investors, as it speaks volumes about both the short-term and long-term prospects of the market.

According to Knight Frank’s findings, although the number of new would-be buyers entering the London market soared by 12% between August and September this year, lining up with the start of autumn, this increase is only half of the increase that was recorded in the same period during the previous two years.

To put this into better perspective, during more politically stable times, before the upheaval of 2016, the same relative increase in demand during the autumn months commonly exceeded 40%.

Expert Insight: The Holding Pattern in Prime London Property

As explained by Tom Bill, Knight Frank’s Head of UK Residential Research, the high-end London property market finds itself in a form of holding pattern under the weight of the current circumstances.

He said, “While it is true that Prime London property has not seen the same degree of price declines as witnessed in the wider UK market, the prosperous postcodes of the capital city have not been entirely spared from the overall declining economic sentiment.”

Bill also noted that the halt in interest rate rises by the Bank of England last month seemed to underscore a prevailing expectation that the market was moving through the worst of the recent downturn.

Updated Forecast: A More Cautious Outlook for London Property Market

Following from this, Knight Frank has subsequently revised its forecasts to reflect its expectation that the majority of the decline in house prices across the UK – and most notably within Prime Central and Outer London – will have happened by the end of this year.

Specifically, Knight Frank is anticipating a 3% drop in house prices within both Prime Central and Outer London for this year, adding a note of caution to the London property market outlook.