A look at the prime Central London market as we enter a traditionally busy period in property – Spring.
- The highest increase in activity in 2023's Q1 is Chelsea, with 25.6% more sold properties compared to 2017-2019.
- In February 2023, the average asking price discount was 8.4%.
For the first three months of this year, we saw prime London's sales market stall slightly. However, even though the broader economic outlook played its part in falling London property sales, the housing market is now showing signs of returning to 2019 trends.
Sales market returns to 2019 trends
The latest London housing market data from LonRes shows that the number of properties sold is 33% lower than the previous year’s Q1 – 9.1% lower than the 2017-19 average1. The number of properties under offer is 10.5% higher than before the pandemic, indicating an increase in sales. More positive news, the number of new instructions is 23.6% higher than 2019 levels.
Despite a housing boom between 2020 and 2021, properties are selling for less, falling by 2.8% over the last 12 months. Although these numbers may seem like a significant drop, they are returning to the London house price trends of 20192.
There are more positive signs within the prime London sales market update. The number of deals within prime London properties is down compared to last year, and those under offer at £5m+ increased by 20% in the first quarter. This data shows confidence in sales rising in the top-end market in Q2.
The outlook of the economic and political environment – and interest and exchange rates – will undoubtedly influence prime Central London property prices in the coming months.
Prime London locations peak
St. John's Wood, Regent's Park & Primrose Hill are the best-performing neighbourhoods that record growth. Over three years, property price per square foot values in the area has risen by 14.6%. The highest increase in activity in 2023's Q1 is Chelsea, with 25.6% more sold properties compared to 2017-2019.
The data also shows how housing prices in prime London property locations have risen by 12.0% over three years, plus a 6.8% price increase in flats.
A return to realistic pricing
The LonRes data shows that if the property takes longer to sell, the more considerable the drop in asking price. In February, the average asking price discount was 8.4%. For properties that had been on the market for more than a year, the discount was 14.5%. This compared to 11% just six months earlier.
Price reductions can also be attributed to the fact that in winter 2022/23, there were limited properties on the market, leading sellers to inflate the value. Now, with supply increasing, sellers are lowering prices to stay competitive. Stamp duty and taxation changes also play a consequential role.
So what we’re seeing could be a return to more realistic pricing overall – a good thing for most agents who want to maintain a steady stream of sales and hit sales prices with accuracy: homes that sell in under three months have an average discount of only 4%3.
A positive outlook for the coming months
With new instructions the highest they’ve been since 2019 and an increase in top-end sales for Q1, the prime Central London sales market is looking strong as we move into Spring. This is a good indication of sales activity later in the year for prime markets, and if the trend for more realistic pricing continues, we may see fewer houses lingering on the market.
If you are looking to buy, sell, rent or let in the prime Central London area or would like some professional advice, we have property experts ready to discuss your next move.
Contact us to find out more.
References:
1. https://assets.lonres.com/newsletter/prime-london-market-report-spring-2023-lonres.pdf
2. https://assets.lonres.com/newsletter/Monthly-Briefing-March-2023.pdf
3. https://assets.lonres.com/newsletter/Monthly-Briefing-March-2023.pdf
