There has been a significant rise in the volume of prospective property purchasers in the prime central London since the EU referendum, offering grounds for “cautious optimism”, despite a sharp fall in house prices in the heart of the capital, according to Knight Frank.
In the eight weeks following the EU vote, there was a 22.1% rise in the number of prospective buyers compared with the same period last year, as reflected by a 19% hike in the number of properties under offer and 49% increase in the volume of viewings recorded.
Greater interest in the prime central London housing market appears to have been fuelled in part by higher demand from overseas investors thanks to the sharp decline in sterling’s value against major foreign currencies in recent weeks, particularly the U.S. dollar, while home prices in the heart of the capital are rapidly falling; an attractive proposition for investors looking to buy property.
Home prices in prime central London dropped at the fastest pace in almost seven years last month, led by an 8.9% year-on-year decline in Chelsea.
“Whilst prices in Chelsea do seem to have dropped by more than other areas in London, this has taken a long time to transpire. As a result, we are seeing a return to the market of new buyers and a huge increase in viewings so it is having a positive impact on activity,” said James Pace, partner and head of Knight Frank’s Chelsea office.
While it is still too early for firm conclusions of future market moves following the EU referendum, the worst of the initial forecasts appear to have been avoided to date, according to Tom Bill, Knight Frank’s head of London residential research.
He commented: “The tentative improvement in some demand indicators provides grounds to believe the prime central London market is set for at least a modest recovery in trading volumes, whether this translates into an uptick in pricing is less clear.”