Prime London sold prices hit decade low but agents ‘remain busy’ - research

Average sold prices in prime London have returned to 2014 levels, research suggests.

The latest market data from LonRes shows the prime London sales market recorded both price and transaction falls in February. 

Average achieved sold prices fell by 7.8% in February on an annual basis, taking values back to early 2014 levels and 3.2% below the 2017-2019, LonRes said.

Transactions in February were slightly lower than a year ago, by 2.7% but, the data firm said activity is holding up relatively better than values.  

It said there were only 0.3% fewer sales in February than the 2017-2019 pre-pandemic February average. 

The number of properties going under offer slipped slightly after a strong start to the year, with 7.6% fewer in February than a year earlier.

New instructions in February rose by 1.0% on an annual basis which is more than 20% higher than pre-pandemic average.

Combined with lower transactions levels the stock of homes for sale is rising.  At the end of February there were 7.5% more properties available than a year earlier.

LonRes said the top end of the market is still the best performing sales market sector, with £5m+ activity well above long-term trend levels.  Sales in February were 4.2% higher than a year earlier and 25% ahead of the 2017-2019 February average.  

New instructions in this market rose by 8.4% annually.  However, there is a growing volume of available homes for sale in this market, with 26% more £5m+ properties for sale at the end of February than a year ago.

Commenting on the findings, Nick Gregori, head of research at LonRes, said: “Once again, the sentiment in the market has been a little more positive than the story told by the latest sales data.  

“Agents are telling us they are busy and while we are recording deals being agreed, there seems to be slow progress from offer to exchange which means actual transaction figures remain muted.  

“The Budget saw some relatively minor tweaks to property taxation – on holiday lets, multiple dwellings relief, and capital gains – plus the abolition of ‘non-dom’ status.  This came too late to impact our February data so we will have to wait and see if there is any immediate impact, but it seems unlikely that the sum total of the changes will shift the dial for either supply or demand in the prime London property market.”