LonRes: There isn’t enough buyer urgency to get deals done

A lack of urgency is limited the number of deals being agreed in prime London, LonRes has warned.

New analysis from the property data company shows the summer slowdown in July meant activity and values fall across the prime London sales market.  

Achieved prices were 2.6% lower than July last year, while transactions were 26.1% lower annually and 9.1% below the pre-pandemic average.

The number of properties under offer in July was 30% lower than a year earlier and new instructions were down 12.4% on the same basis, LonRes said.

This trend is also being seen in the typically different £5m-plus market, the analysis suggests.

Sales in this part of the market fell 24% annually in July but activity remains significantly higher than pre-pandemic levels by more than 40%.

Commenting on the findings, Nick Gregori, head of research, LonRes said: “The second half of 2023 has started much like the first, with an uncertain sales market reflecting weaker sentiment from both buyers and sellers.  The impact on values remains small – average achieved prices fell in July but not significantly – while transaction levels are subdued after two strong years.

“Many agents are reporting healthy levels of buyer enquiries, but a lack of urgency is limiting the number of deals actually being agreed.  Longer conveyancing times are adding to the general sense of nervousness in the market, with agents attempting to find the right balance between smoothing a deal through, without exerting pressure to the point at which it falls apart.”

With the summer holidays now underway, Gregori said the market is in its traditional slowdown period. 

He added: “September signals the start of the autumn selling season and that will be key to how 2023 finishes up.  If borrowing costs have settled down by then and the economy starts to perform better, we could see a stronger close to the year.  But if the recent volatility continues it is likely transaction numbers will remain suppressed and values could come under more pressure.

“At the top end of the market the dynamics remain slightly different with high levels of new instructions and sales a little down on last year.  While the volatility of the mortgage market has less direct impact in this equity-driven sector, it undoubtedly affects sentiment, creating uncertainty among both buyers and sellers alike.”