The London property market, specifically in the prime areas, has been experiencing a noticeable slowdown in sales activity. March saw a significant 19.3% drop in property sales compared to the same month last year, signaling a cautious approach from both buyers and sellers.
Despite a mild pickup from February, March did not bring the usual spring surge in sales that real estate experts anticipate. The sales figures not only fell by 19.3% year-over-year but also dipped 10.0% below the average sales for March from the pre-pandemic years of 2017 to 2019. According to Nick Gregori, head of research at LonRes, this lack of activity can be partly attributed to the early Easter break, which may have disrupted the usual market dynamics.
Pricing Trends
On a brighter note, the average achieved values in the prime London market showed a slight improvement on a month-to-month basis. While the prices are still down by 3.8% annually, this marks a slowdown in the rate of decline compared to previous months. This suggests that while the market is sluggish, it is not in freefall, and some areas may even be seeing a stabilisation of prices.
Increasing Property Listings
The market saw a 5.4% increase in new instructions compared to last year, with a substantial 14.2% rise over the pre-pandemic March average. This increase in listings indicates that more property owners are considering selling, adding to the already growing stock. By the end of March, there were 9.7% more properties on the market than at the same time last year, further evidencing the increasing stock availability.
Rental Market
The rental segment of the prime London market paints a mixed picture. While average rental values in March were up a significant 28% over their pre-pandemic average, the number of newly agreed lets saw a decrease of 9.1% compared to last year. Despite this drop, the total for the first quarter was still up 2.4% year-over-year, indicating a resilient rental market overall.
Market Outlook
Both buyers and sellers in the prime London market seem to be in a “wait and see” mode. Many buyers are holding off on purchases, possibly anticipating further price drops or more favorable interest rates in the future. Conversely, sellers not under pressure to sell are also waiting, hoping for better prices down the line. This standoff is leading to fewer transactions but a stable number of enquiries, suggesting an underlying interest that could potentially activate the market if conditions improve.