Prime central London house prices have seen their first quarterly increase in four years, with a 0.3% rise in the three months to September, Knight Frank figures show. Despite this, annual values are still 2% lower, though this marks the smallest yearly decline in 18 months.
The improvement follows a challenging period for London's prime property market, impacted by mortgage rate volatility, tax changes, and political uncertainty. Sales activity has also shown signs of stabilising, with exchanges across prime central and outer London falling 2.5% in the year to September, an improvement from a 14% annual decline in March.
In the rental market, letting agents are facing a different challenge. Average rents in prime outer London increased 3% in the year to September, and new rental listings in the same area fell 6.4% in the year to August. Prime central London also experienced an acceleration in rents, with annual growth reaching 1.3% in September.
Knight Frank warns that the upcoming Budget on 28 October could influence both the sales and lettings markets, with speculation about potential property tax changes creating fresh uncertainty.