Knight Frank has forecast that demand in prime central London is set to decline by 1% over this year.

The prediction comes as the firm previously said in January 2024, it believed demand in the area would rise by 1%.

According to Knight Frank the revision follows a declining near-term demand outlook for the area over the last two-months.

While the revisions to the demand forecast were made before the election was called, the firm said the uncertainty of the general election, as well as changes to non-domicile rules, from both Labour and The Conservatives, have caused hesitation in the property market.

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During the spring budget, in March the Conservatives pledged to  reform the non-domicile tax rules and replace them with a residence based regime, while the Labour party have also said they will close ‘loopholes’ in the Conservative non-dom plans.

Despite this, the company has predicted a 16.4% cumulative growth over the five years to 2023 for the market.

UK markets outside of prime central London, such as the Greater London, prime outer London, and the prime country markets  are predicted to remain the same, as according to Knight Frank, these are not as exposed to political risk and tend to follow economic cycles.

Gary Clark, sales director at Century Capital, commented: "This is a fair reflection of the near future market. It is however predicated by two key factors: the result of the impending July election and the Bank of England's decision on interest rates.

"The outcomes of these events will have a material effect on where both the rental and sales market will land."