Prime London instructions rise but fall-throughs increased over the summer

There are signs of caution in the prime London market with an increase in sales falling through during August, new figures show.

Analysis by property data company LonRes shows an uptick in the number of transactions falling through during the summer.

The number of fall-throughs were 33% higher in August 2022 than the same month last year.

Prime London transaction numbers still remained 11.6% higher than their pre-pandemic average between 2017 and 2019 while new instruction were 5.5% higher

LonRes also revealed that property supply is improving in prime London but mainly at the top of the market.

The number of new instructions for house sales in prime London during August were up 7% on 2018 levels, while flat listings were down 3%.

The top-end of the market, listings for £5m plus, saw the biggest increase in new instructions - up 30% on 2018 levels, LonRes said.

Properties priced between £500,000 and £1m were 5% below 2018 activity though.

It is a similar pattern with prime London areas, according to LonRes.

The highest value market – Prime Central – has seen new instructions 8.5% higher than 2018 levels and Prime Inner are 1.7% higher while Prime Fringe are 8.8% below.

Prices are still rising across Prime London at an annual rate of 4.2% in August, according to LonRes.

This left prices 3.1% higher than their pre-pandemic average.

Anthony Payne, managing director of LonRes said: “The summer is traditionally a quiet time for the housing market, but August figures show that prices and activity levels across prime London held their own.
 
“However, it’s difficult to ignore that there could be challenges ahead.  

“We know that people will always want to want move – demand levels remain high - and for serious sellers realistic pricing will be key.  Anecdotally we hear that realism on pricing is beginning to happen now, and its impact will undoubtedly take some of the heat out of the market, which has to be good news.
 
“Over August, new instructions at the top end of London’s prime markets were up by some 30% on 2018 levels.  How these instructions translate into sales over the autumn will provide a good barometer for the wider health of the market in the months ahead.”
 
“The story for Prime London rents remains unchanged.  Lack of stock, longer tenancies and heightened demand are all leading to a rise in rents – up 24% this August on last.  With no sign of new stock coming anytime soon, rents look set to remain high for some time to come.”