Home buyers return to London’s property market amid greater certainty

SINGAPORE (EDGEPROP) - Early indications show that the relative political certainty provided by the December 2019 UK general election result is starting to boost home buying activity in prime London markets, says Knight Frank.

The property agency says that the number of new prospective buyers it registered over the second week last month rose to its highest weekly total in more than 15 years. While the exact numbers were not revealed, the company says the figure this year is 92% higher y-o-y, and 95% higher than the same period in 2018.

In addition, Knight Frank says that the number of viewings across London rose to its third highest total in 15 years on Jan 11. This comes as buyers look to capitalise on the certainty brought by the recent election result, the agency adds.

According to Christopher Burton, head of Knight Frank’s Dulwich office in London, “the second half of last year was active as buyers ventured back into the market but interest has exploded at the start of this year”.

Knight Frank also released a market report containing its five-year sales and rental forecast for the UK and prime London property markets. It is forecasting a 2% price growth across the UK this year, and accumulative 15% increase over the next four years. Prices in prime central London are expected to climb 1% this year, and 3% in 2021. But Knight Frank also expects deepening affordability pressures and property taxes will continue to weigh on pricing.

“We expect lower-value rental markets in the capital to outperform in the short term, with 3% growth in prime outer London forecast for 2020, a trend that will be driven by this lack of supply as owners try to capitalise on any post-election 'bounce',” the report says.

The UK is forecast to see overall rental rents climbing 1% this year, followed by a 2% increase next year. Meanwhile, London could see rents go up by 2% this year, and 3% in 2021.

Nicholas Keong, head of residential international project marketing at Knight Frank Singapore, says: “With the certainty brought about by December’s general election, the UK leaving the EU on Jan 31 and a favourable Singapore dollar to sterling pound exchange rate, we’re seeing renewed confidence in London property and the UK, from both investors in search of attractive mid-to-long-term returns, and parents looking to purchase for their children.”