Sales in London’s existing homes market are increasingly driven by owner occupiers rather than landlords, according to new analysis from Knight Frank.

The firm says that transaction volumes have stabilised and prices have re-based following a series of tax changes that cooled demand in the prime London market.

James Clarke, a regional head for Knight Frank in the capital, pointed out that as buyers see greater evidence of value, those driven by needs such as schooling or downsizing have responded more quickly. Meanwhile, landlords are still processing a series of recent tax changes that have put downward pressure on rental supply and upward pressure on rental values.

Landlords accounted for 14% of all prospective buyers in May 2018, Knight Frank data showed, which is down from 21% of all prospective buyers in May 2014. However, the data does not include the new-build market.

Clarke added: “It is the needs based buyers who are driving the market at the moment. People are now thinking longer-term before moving than they did previously because of higher stamp duty. From a landlord’s perspective, the tougher tax landscape means some are sitting on their hands before deciding what to do next.”