Demand in the prime London property market is robust, with the calamitous mini-Budget fast becoming a distant memory, according to Knight Frank.

The agency’s sales report for May 2023 shows the number of new prospective buyers for the first four months of the year was 35% above the five-year average excluding 2020.

Supply is also picking up, with the number of sales instructions 16% higher over the same period, helping to push the number of exchanges up by 8%.

Knight Frank observed that prime markets in the capital have benefited post-pandemic from the return of international travel, a relatively weak pound and the fact that average prices in prime central London are still 15% below their last peak in mid-2015.

Higher levels of cash sales, housing equity and affluence mean that buyers and sellers inside Zone 1 have been more immune from the volatility in mortgage rates that followed the mini-Budget. 

However, lower-value markets are performing more strongly than most anticipated despite the fact mortgage rates are more than double the level of two years ago. A strong jobs market, accumulated lockdown savings and readjusted price expectations have also played their part, Knight Frank noted.

By way of comparison, the report stated that the number of new prospective buyers outside the capital was down by 7% over the same period in 2023 and viewings were 9% lower as the ‘race for space’ slows down.