The prime London sales market experienced a seasonal slowdown in November, following a record-breaking October. But a combined analysis of the two months points to growing momentum rather than just a surge of deals rushed to beat the Budget, latest LonRes analysis suggests.
In November, transactions across prime London were 4.2% lower than the same month last year and 19.4% below the 2017–2019 (pre-pandemic) November average.
Despite this, the number of properties going under offer rose sharply, increasing by 20.4% compared to November last year. Notably, four of the past five months have seen annual growth of over 20% in this metric.
New sales instructions in November were up 4.4% year-on-year and stood 19.5% above the 2017–2019 November average. Meanwhile, the total number of homes available for sale at the end of the month was 10.1% higher than a year earlier.
PRIME LONDON
Across prime London, average achieved prices fell in November by 1.8% on an annual basis in November and were also 1.8% lower than average 2017-2019 (pre-pandemic) levels.
The £5m+ market also saw lower activity in November following a strong October.
Transactions were 7.1% lower on an annual basis and under offers fell by 14.7%.
New instructions in this market increased by 7.0% compared to last November, with available stock on the market rising by 23.3% over the past 12 months.
RENTAL GROWTH
Annual rental growth across prime London increased slightly to 1.6% in November, but the general trend over the past 12 months has been low, steady growth. Average rents were 34.6% above their 2017-2019 (pre-pandemic) average.
LonRes data for November indicated an annual decrease of 12.5% in lets agreed and a 15.6% decrease in new instructions, with activity on both measures remaining well below pre-pandemic levels.
The stock of available rental properties across prime London at the end of November was 8.7% lower than a year earlier.
IMPROVING ACTIVITY
Nick Gregori, Head of Research at LonRes, says: “November was always going to seem quiet compared to October but, in context, the latest data suggests that activity in the prime London sales market is improving.
“October and November combined recorded almost a quarter more sales than the same two months last year.
“There’s more choice for buyers but there were also more properties going under offer, indicating further growth in sales in the pipeline. Feedback from agents suggests they are focusing on getting potential buyers and sellers ready for a renewed push in the new year.”
STUBBORNLY FLAT
But he warns: “Values are a less positive story, with price growth remaining stubbornly flat despite the recent flurry of transactions.
“With stamp duty, borrowing costs, and the price of building works all rising in recent times the pressure on values has been mostly downwards, regardless of any increases in demand.
“Prime central London is probably most impacted by these factors, so it is no surprise that values have struggled the most in the highest value markets.”
LOWER PRICE GROWTH
Gregori says higher supply is also part of the mix in terms of lower price growth – the top end of the market having seen the largest increases in the number of homes for sale and demand slowing from the high levels of 2021 and 2022 in the past couple of years.
He adds: “The prime London lettings market has been on a steadier course, with most metrics broadly mirroring last year’s levels.
“ Annual rental growth remains relatively low at 1.6%, while new instructions and agreed lets both fell in November. Continued low supply is limiting activity levels across most price points. The very top end of the lettings market may buck this trend, with tax changes tipping the balance away from buying for high net worth movers to London.”
