August continued the theme of 2023 so far for the prime London sales market – quiet. Values remained broadly stable, with average achieved prices falling by 1.0% compared with a year earlier. Prime central London bucked the wider trend by recording annual growth of 2.3%, bouncing back from last month. New instructions in August were 16.5% lower than the same month last year and 11.5% lower than the prepandemic August average (2017-2019). Transactions fared similarly with a 28.5% annual fall in August, 9.2% below the 2017-19 average. For the whole of 2023 so far there have been almost 24% fewer sales recorded. The number of properties going under offer also fell in August. There was an annual fall of 17.1%, with the total for the year to date 12.6% below last year. However, the number of under offers for the year to date is 18.9% above the 2017-19 average, so the wider context suggests that there is still a decent level of demand in the market. While there are few positive signs in the above analysis, looking at the data for the whole summer suggests that the lack of activity is to be expected and the results for 2023 are nothing out of the ordinary compared to previous years. Sales volumes for the months of June, July and August 2023 combined are a little lower than the 2017-2019 average and both new instructions and under offers are above that baseline.
The positive signs emerging in June didn’t last long, with the prime London sales market slowing down again in July. Average achieved prices fell by 2.6% compared with a year earlier. All three sub-markets across prime London recorded falling sale prices in July, with prime central London’s 3.4% drop the largest. While the market is often quieter as the summer holidays start, last month’s activity was low compared to the typical July. Transactions in July were 26.1% lower than the same month last year, and 9.1% lower than the prepandemic July average, i.e. from 2017 to 2019. New instructions in July were 12.4% lower than a year earlier, but for the calendar year to date they were up slightly, by 2.6%. The July figure was also 6.4% above the 2017-19 average.
At the halfway point of 2023 the prime London sales market remained subdued, with house prices broadly flat and most measures of activity trending downwards from the higher levels recorded in 2021 and 2022. The lettings market is still seeing strong demand and limited supply, resulting in competition between tenants and continued rental growth. The stock of homes for sale is growing, as new instructions have been steadily increasing while transactions fall back. This has been particularly marked in the £5m+ price band, where Q2 saw the highest number of new instructions on record, with sales unable to keep pace. The falls in activity in the prime London rental market appeared to be bottoming out in Q2, with new instructions and agreed lets both remaining around 50% below their pre-pandemic levels. These falls may be overstated as rental demand is so strong that a significant proportion of properties are being let without listing, so are not captured in the data.
Prime London sales market still quiet in May…Agreed sales volumes across prime London picked up compared to April’s figure, but in a wider context remain low. Transactions in May were down 26.7% compared to a year earlier and 6.0% below the 2017-19 (prepandemic) average. Total sales over the first five months of the year are 23.6% lower than last year and broadly in line with the 2017-2019 average (-0.7%). It’s a more mixed picture for both supply and stock. In May, new instructions across prime London were 7.9% lower than a year earlier and 0.1% below the 2017-19 average. 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 and 12.3% above the 2017-2019 average.
Prime London sales activity remained low in April. In fact, agreed sales for the month were at a record low, excluding the lockdown-affected April 2020, and down almost 35% on a year earlier. However, sales taken over the course of the year to date are only 1.4% below the 2017 to 2019 (pre-pandemic) average. In a sentiment-driven market with price falls widely forecast, buyers are clearly playing a waiting game just now
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