Prime Central London Home Sales Continue to Show Unbalanced Market in 2020

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However, this was followed by a decline in January 2020, underlining how uncertainty surrounding future property tax changes and Brexit negotiations may continue to curb transaction volumes.

The so-called 'Boris bounce' has been observed among buyers rather than sellers in London's prime property market. While the number of new prospective buyers rose 37% in PCL in the year to January compared to the previous 12 months, the number of new sales listings fell by a quarter. This imbalance will continue to put upwards pressure on prices.

The percentage of buyers from the financial services sector buying homes in prime central London above £2 million rose in 2019. Workers from banking, insurance and associated sectors accounted for 34% of sales, the highest figure since 2013, indicating how any uncertainty since the EU referendum surrounding London's role as a global financial centre is receding.

Economic data has shown an uptick in confidence and activity since December's general election. The purchasing managers' index, an indicator of UK business activity, maintained its recent momentum in February with a reading above 50 (which indicates expansion), led by an increase in the manufacturing sector. Meanwhile, the Citi Economic Surprise Index, which measures how far economic indicators deviate from forecasts, has risen in recent weeks as economic results have beaten expectations.