Activity in October’s prime London housing market increased significantly with the second highest number of transactions in the month over the past 20 years, analysis by LonRes reveals.
New instructions and under offers also grew strongly, suggesting this momentum could be maintained through to the end of the year.
Meanwhile the lettings market was more subdued, with both supply and agreed lets falling compared to same period last year.
Average achieved prices decreased on an annual basis in October, but the pace of falls slowed to 0.9% – but was the best performance since last August.
Compared to 2017-2019 (pre-pandemic) levels, values are currently 0.6% lower.
Meanwhile, new sales instructions in October were 18.7% higher than last year and 12.1% higher than the 2017-2019 (pre-pandemic) October average and the stock of available homes for sale also grew – 10.6% higher at the end of the month than a year earlier.
Despite sales at the top end of the market slowing this year – relative to recent highs – activity did rise in October with £5m+ transactions up 34.5% on last year and 62.5% above the 2017-2019 (pre-pandemic) October average.
BUDGET CONCERN
Nick Gregori, Head of Research at LonRes, says: “October saw a significant increase in sales activity in prime London.
“Set against a backdrop of concern around the first Labour Budget and a subdued year so far for transactions, at first glance this may appear a surprise development. But there are a few factors that explain why the market has suddenly picked up.
“We have consistently noted that underlying buyer demand has remained relatively robust this year even if not translating into agreed deals.”
CATALYST FOR CAUTIOUS BUYERS
He adds: “It seems the catalyst for cautious buyers to move out of the ‘wait-and-see’ phase was the chance to get a deal done before the Budget potentially introduced increased or new taxes for property purchasers.
“Volatility of borrowing costs may also have played a role – potentially a case of ‘use it or lose it’ for those with better mortgage offers from a few months back expiring.
“But it’s not just deals being brought forward, as under offer numbers also suggest a healthy pipeline of deals to come over the closing weeks of 2024.”
SUBSTANTIAL DEALS
Gregori goes on to say: “The £5m+ market enjoyed some of this momentum too, with some substantial deals done in the past few weeks.
“Supply continues to grow but October saw large increases in both sales and under offers compared to last year.
“The market remains well ahead of pre-2020 trends.”
“Looking at activity over the past four months – the first following the change of government – suggests it has fallen back a little from the strong market of 2022 and 2023 but remains well ahead of pre-2020 trends.
“The prime London lettings market is recording slightly higher activity on a year-to-date basis but recent monthly figures have been weaker.
“October saw agreed lets and new instructions fall relative to October 2023, the third consecutive month with both metrics decreasing on an annual basis. Annual rental growth fell to 1.4%.”
