Demand remains relatively subdued in London’s prime postcodes, as the General Election nears.

The number of offers made above £5m was 22% below the five-year average in April and May (excluding 2the Covid market of 020), which compares to a decline of 9% below £5m.

The figures come from agency Knight Frank which adds that meanwhile, there was a 4% increase in the number of new prospective buyers registering below £5m but a 7% fall above that figure.

While demand has cooled, supply remains strong, which is putting downwards pressure on prices. The number of new sales instructions was +12% above £5 million and +18% in the sub-£5 million price bracket.

“Property is coming to the market as sellers realise that prices won’t rally any time soon and rates aren’t going to come down quickly,” said Stuart Bailey, head of super prime London sales at Knight Frank. “Viewings are still taking place and demand is there but it’s just below the surface for now.”

Average prices in prime central London (PCL) fell by 2.4% in the year to May, after declining 0.9% over the last three months. In prime outer London (POL), average prices fell by 1.2% over the year, which followed a rise of 0.3% over the last three months.

Once again, it was domestic and needs-driven markets that fared best. The top price performers in the capital in the year to May were Wandsworth (+5%) and Dulwich (+2.6%).

As discretionary buyers adopt a more cautious approach ahead of the election, Knight Frank has revised its prime central London forecast.

A statement says: “We now expect a 1% decline this year as opposed to the 1% increase we estimated in January. We expect growth of 16.4% in the five years to 2028 as latent demand ultimately kicks in.”

The agency says that the best news for investors is actually the announcement of an event that will not happen.

Shadow Chancellor Rachel Reeves says Labour will not hold an emergency Budget if it wins the election, instead giving the Office for Budget Responsibility time to assess the impact of its plans.

Among other things, the pause would enable a conversation about the effectiveness of its proposal to raise £2.6 billion by changing the non dom rules, suggests Knight Frank.

There are 68,800 non doms in the UK and under a fairly complex system they don’t pay tax on their non-UK income.

“Having spoken to a senior Labour figure, my sense is they don’t want to scare wealthy individuals away from the UK” says James Quarmby, a partner in the private wealth team at law firm Stephenson Harwood.

“Irrespective of what politicians say during an election campaign, being in government is completely different and I expect a Labour government to proceed with caution. There will be scope to finesse the non dom legislation so that it broadly meets their campaign promises, but at the same time remains business-friendly.”