Prime London property prices fall faster amid crisis

Price declines for London's upmarket properties accelerated for the first time in more than a year as the Covid-19 crisis snuffed out tentative signs of revival, a survey showed.

Knight Frank's index for prime central London property prices fell 0.3% from March to April, taking the annual decline to 1.3%. The estate agent said it was the first time the annual decline had widened in more than a year. But it said there were signs the market could revive again when uncertainty eased.

After years of declines spurred by Brexit uncertainty London's prime property market was showing signs of revival in early 2020 following the Conservatives' election victory in December. But the coronavirus crisis has put prices and sales into reverse.

The difference between asking prices and exchange price is widening, reflecting ad hoc talks between buyers and sellers. In April the average sale price was 94% of the asking price compared with 97% in January when prices were firming after the Tories' victory.

Knight Frank said one in five deals under way when the pandemic struck had fallen through and that the number of transactions in the week ending 2 May was 54% below the five-year average. However, it said the equivalent drop in the first week of lockdown was 74%, suggesting people were starting to look to the future.

"The number of lost sales due to Coronavirus is growing," Tom Bill, Knight Frank's head of London residential research, said. "However, the second trend is that more buyers are starting to prepare for life after the lockdown."

New buyer registrations in London have also picked up since the beginning of the lockdown. In the last week of March the number was 77% below the five-year average but by the week ending 2 May the decline was 60%.

The number of prospective new buyers has doubled in that time, Knight Frank said. The potential spend of buyers registered with the company in London was £52bn on 5 May – 20% more than a year earlier, it added.

"There is clear evidence that pent-up demand has continued to build in London," Bill said.