On the house! Prime buyers continue to snub flats

Houses continued to be the preferred property type for prime London buyers last month as flat sales continue to struggle amid the ‘race for space.’

Data from prime London property platform LonRes shows while the number of transactions is 27.5% lower than last year, when the market was skewed by the stamp duty holiday, a more representative comparison shows they were 4.6% higher than the average for April between 2017 and 2019.

Achieved prices across the whole of prime London were 5% higher annually in April 2022.

Houses remain the preferred option for buyers over flats.

Prices for houses rose 7.6% annually on average in April compared with 4.5% for flats.

The number of house transactions in the first four months of 2022 was similar to the level of the pre-pandemic peak in 2014, LonRes said.

In contrast, the number of flat transactions was still 27% lower. 

Additionally, prime houses are selling two months faster than flats at seven months.

The research found that the numnber of instructions in prime London was down 21.1% annually in April, but the drop was just 3.8% compared with the 2017 to 2019 period.

Anthony Payne, managing director of LonRes said the real story is all about houses vs flats.  

He added: “This is a trend that we have been reporting for some time, but the figures continue to make for interesting reading.  

“Anecdotally we’re hearing that it’s domestic buyers that continue to drive this market and they’re prepared to pay a premium to secure the house of their dreams.  

“An example of this is a house in SW10 which was marketed last year but withdrawn after 40 viewings when the best offer received had been £3.85m. 

"Marketed again at the end of March this year the house had 25 viewings in two days and after competitive bidding sold for £4.35m.

“While flats may be struggling in comparison, there are pockets of prime London where flats and property as a whole, look relatively good value right now. 

"International buyers have been scarce over recent years, and the markets in which they traditionally buy - such as Knightsbridge and Chelsea – are some way off their pre-pandemic highs.  

“With the recent announcement of a rise in interest rates, together with increased affordability pressures beginning to bite, the extent to which prime London is immune to wider economic forces is difficult to quantify but one that we’ll be following with keen interest over the months ahead.”

Table 1 - Monthly Prime Data – April

Source: LonRes