Knight Frank has described the current state of the prime London property market as “reassuringly uneventful”, after year-on-year comparisons show that little has changed across a whole range of indicators over the past 12 months.

The estate agency notes that this is not a property market averse to dramatic movements, with prime central London (PCL) prices falling 24% in the year to March 2009 as the global financial crisis kicked in. This was followed by a 20% increase over the subsequent 12 months as PCL property became a target of safe haven investors.

In March 2023, Knight Frank data reveals that average prices were just 1% lower than three years ago, when the pandemic first struck. Over the last 12 months, the movement has been even smaller (+0.5%). It has been slightly more eventful in prime outer London (POL), with average prices in March 2.4% higher than a year ago after a flat six months.

It is not only property prices that have been subdued. The number of sales in the year to February was only 1.8% higher than the previous 12 months, Knight Frank data shows.

Meanwhile, new prospective buyers were up by 3%, the number of offers made was down by the same amount and viewings were 5% lower. The one real change was supply, with the number of sales instructions 22% higher. This return to more normal stock levels after the tight conditions of the pandemic partly explains why annual price growth is flat compared to +2.1% a year ago.

Tom Bill, head of UK residential research at Knight Frank, said: “We don’t expect a return to double-digit price movements in either direction any time soon, though. We forecast a 3% decline in PCL this year and a 4% drop in prime outer London before a return to modest single-digit growth. One of the reasons we expect growth at all is precisely because prices have moved so little in recent years. It has left average values in PCL 15% below their last peak (August 2015) and 7% lower in POL (August 2016).

“Other drivers for growth include the return of international travel, the currency discount and the higher percentage of cash buyers at a time when mortgage rates are notably higher than a year ago.  Indeed, while the overall number of exchanges in the year to February was broadly flat, the figure above £2m was 10% higher while there was a 3% decline below that level.

“Stability enables buyers and sellers to plan, though these balanced conditions won’t last forever. As the economy performs better than expected and the UK looks likely to avoid a recession, politics is the arena where risks may proliferate over the next 12 months.  A general election must take place no later than January 2025 and if the taxation of wealth and property becomes a live issue, expect more dramatic movements in prime London postcodes. For now, some will be reassured by the current period of uneventfulness and take it as an opportunity to act.”