Executive summary 2.6x How much longer to sell a home if the asking price is cut by 5% or more • House prices are 1.4% higher over the first 7 months of 2024 having fallen over the final half of 2023 • All measures of activity are up year-on-year - the long-awaited base rate cut has not had a major impact on market activity so far • Price inflation has improved across all areas, remaining slightly negative in southern England but with London positive at 0.2% • 1 in 5 homes has had their asking price cut by 5% or more, an aboveaverage level showing continued price sensitivity amongst buyers • It takes 28 days to sell a home with no asking price reduction, but 73 days if you overprice and then need to reduce by 5% or more • House prices on track to be 2.5% higher over 2024 with 1.1m sales
A wind of change seems to be sweeping across the nation.The recent general election has brought in a new government and with it a renewed sense of optimism.Granted Labour is in the early days of a honeymoon period, but a bit of stability is what we all need – it allows us to plan and make decisions based on (a degree) of certainty. Although not the only factor in the buying or selling decision-making process, we know that sentiment plays a big part.Having a sense of certainty, which brings with it an ability to plan, can only help.
The May prime London sales market was characterised by growing supply and increasing numbers of price reductions, with demand staying steady. Transaction levels remain lower than last year but other indicators suggest a relatively healthy market – under offers are rising and fall-throughs are down. Average values, based on achieved £ per sq ft figures, fell by 2.8% in May on an annual basis, leaving prices approximately in line (+0.7%) with pre-pandemic levels. Actual average prices have now risen slightly for three consecutive months, adding to the evidence that prices have bottomed out. Looking longer-term, values are 3.2% below where they were 10 years ago. Transactions in May fell by 14.8% against the same month last year and were 5.8% below the 2017-2019 (pre-pandemic average) May average. The number of properties going under offer in May was 4.3% higher than a year ago. This builds on strong growth in April and suggests the pipeline of deals is healthy.
Prime London demand resilient but slow to turn into agreed deals. The prime London sales market showed signs of improvement in April, with average achieved prices up on March. Transactions remain subdued when measured only by exchanges, but under offer numbers are improving and other indicators suggest that demand is relatively stable. On the supply side, new instructions continue to rise and available stock is growing steadily. Average values, based on achieved £ per sq ft figures, fell by 2.5% in April on an annual basis, leaving prices approximately in line (+0.1%) with pre-pandemic levels (2017-2019). Average monthly prices have risen twice in a row, suggesting that we may have passed the low point in values for now.
The first quarter of 2024 saw little change in the prime London sales market, with activity remaining subdued and further small falls in average prices. For prime London lettings, rental growth stabilised and activity increased slightly, indicating a more balanced market. Our analysis shows that the clearest trend in the sales market is an increase in available stock. New instructions rose by 4.5% in Q1 on an annual basis, while there were lower levels of agreed sales and properties going under offer. This has resulted in a 9.7% rise in the number of homes for sale at the end of March compared to a year earlier. This trend is stronger in the £5m+ market, with a 26.5% rise, though activity here is also higher. In the lettings market, annual rental growth is still in positive territory at 1.2%, but well down from the 2022 peak of more than 20%. Activity is still constrained by a lack of supply, although this is gradually improving. New letting instructions grew by 14.4% annually in Q1, but this is only just over half the average 2017 – 2019 (pre-pandemic) level.
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