Prime London Sales Report: December 2020
Prime central London sales index: 5295.9
Prime outer London sales index: 257.0
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The difference between the annual price change in prime central and prime outer London was at its widest this year in December as Brexit-related uncertainty increased in the run-up to the end of the transition period.
Average prices in PCL fell 4.3% during 2020, while the annual decline narrowed to 3.2% in POL after monthly growth of 0.1%, see chart below. Prices in PCL fell 0.1% between November and December.
Brexit uncertainty and movements in the pound have a more marked impact in central London markets, where there is a greater proportion of overseas buyers.
In the year following the EU referendum in June 2016, prices in PCL fell 6.3%, which compared to a decline of 1.9% in prime outer London, where there is a greater predominance of UK buyers.
“Renewed uncertainty over Brexit means some buyers and sellers became more cautious in the final weeks of the year,” said Tom Bill, head of UK residential research at Knight Frank. “As we saw after the EU referendum, this tends to have more of an impact in central London.”
The number of viewings in the week to 12 December in prime central London was 11% below the five-year average. Meanwhile, in prime outer London, the figure was 27% above the five-year average.
Any impact of Brexit-related uncertainty in PCL may be short-lived as both the UK and EU work their way towards a deal. Knight Frank has forecast that price growth in PCL will outperform mainstream UK and prime outer London markets in 2021 as a wave of pent-up overseas demand is released.