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A Fragile Recovery

09.10.20

Knight Frank has just recorded a quarterly uplift in average PCL prices for the first time since February, but don’t call it a bounce…

Quarterly price growth returned to the PCL market in September – for the first time since February this year – according to Knight Frank’s latest reading.

Average values ticked upwards by 0.2%, the same amount recorded in the wake of Boris Johnson’s election win all that time ago in December 2019, although the agency prefers to describe what happened this time round as a “notable recovery”, rather than a “bounce”.

PCL prices had been falling for six months before September’s turnaround, less than half the time it took in the wake of the GFC, but the recovery is described as “still fragile”.

Firstly, it isn’t looking like the levels of demand we saw in Q3 will carry over to Q4; while the number of prospective buyers registering in London was 44% above the five-year average last week, that increase has halved since July and August. Secondly, the number of price reductions is edging up, which could be a telltale sign of things to come.

On a more positive note, the agency is confident that transaction volumes will stay buoyant as we head into the winter months, thanks to the time it takes to get deals over the line…

In prime outer London, prices rose for a second consecutive month in September, seemingly in response to the demand for family-sized houses and more outdoor space post-lockdown. The annual price decline has now narrowed to 3.9%.

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