Overseas travel fuels Prime London

The number of offers accepted across Prime London last month was the highest figure in a decade, underlining the strength of appetite for higher-value property in London, Knight Frank analysis shows.

The real estate consultancy linked this with the return of international travel, as the number of international arrivals at Heathrow in June was only 17% down on the same month in 2019, compared to an equivalent drop of 87% last June.

Prime London is seen as relatively good value, as price growth was lacklustre in the city during the pandemic, and that period followed six subdued years.

Indeed, average prices in prime central London are still 15% down on their previous peak seven years ago.

Meanwhile Knight Frank said there’s a “creeping sense” that investors are looking more closely at safe-haven assets, which are historically associated with London, amid Russia’s invasion of Ukraine.

Other factors are a strengthening US dollar as well as an increase to the gold price.

Average price growth in Prime Central London (PCL) was 2.8% in the year to July and 5.2% in Prime Outer London (POL), though the performance was stronger in higher price brackets.

Lettings – Tight supply as international students and corporate tenants arrive

The imbalance between supply and demand for rental properties widened last month.

A flood of short-let properties came onto the market last year due to staycation restrictions, which drove down rental values. As the economy re-opened, supply fell and demand spiked, causing rents to spike.

The arrival of international students and corporate tenants this summer will further fuel the imbalance.

There’s strong upwards pressure on rental values, as average rents in PCL rose 22.2% in the year to July, a rate that has narrowed from a peak of 29.2% in April. In POL, the annual rise fell to 17.3% from 23.5% in April.

Leave a Reply