Key figures are all down compared with the previous year
Prime London property sales were still slow in May, as transactions were down 26.7% compared to a year earlier and 6% below the three-year pre-pandemic average from 2017 to 2019.
Prime London housing market data published by independent property analysts LonRes also showed that total sales over the first five months of the year were 23.6% lower than last year and broadly in line with the 2017-2019 average.
In May, new instructions across prime London were 7.9% lower than a year earlier. However, the early part of the year saw higher numbers of homes coming to the market, and the year-to-date figure is 5.2% up on last year.
According to LonRes, the numbers of sales falling through and properties being withdrawn from sale are in line with recent trends. The stock of homes available for sale is growing very slightly – at the end of May, it was 1.3% higher than a year earlier.
Meanwhile, prices across prime London remain broadly static, with the average achieved sale price in May down by 0.6% on the previous year.
The average discount to asking price fell sharply to 7.1%, and the proportion of properties seeing price reductions before sale also fell to 45.6%, suggesting that sellers are becoming more realistic on pricing.
“We’re hearing from agents across Prime London that some markets are a little slow and that it can be tricky to get deals over the line,” said Nick Gregori, head of research at LonRes. “Where vendors and buyers are motivated and pragmatic, agreement can be found and sales are still happening, just at a slower pace than the past couple of years.
“For those who are less committed to moving, we have seen something of a standoff between sellers looking back at the strong 2021 and 2022 market and buyers anticipating a weaker one in the near future. But our latest data on discounts and price reductions shows this gap in expectations may be starting to close.”
Supply still constrained in the lettings market
LonRes reported that activity in the lettings market remained low in May, with the number of new lets agreed down by 25.4% compared to a year earlier due to limited levels of stock coming to market.
Rental growth in May was 8.5% on an annual basis, a slight increase on recent months but well below the figures seen last year.
Data also suggests that while demand continues to outstrip supply in general, changes in time on the market suggest higher value properties are becoming slightly slower to let.
“The Prime London lettings market is broadly unchanged from the start of the year,” Gregori noted. “Strong demand set against shrinking supply has resulted in continued rental growth, although at a slower pace than last year.
“Smaller and more affordable properties remain popular, but there are signs that the market at higher price points is weakening slightly, with our May data showing increases in the time to let in the £1,000-plus per week market.”
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