March 2024 has revealed a mixed performance in the prime London housing market, according to independent property analysts, LonRes. While the broader market is experiencing a slowdown, the sector for properties valued at over £5m continues to show strong activity.
In the £5m+ category, transactions in March 2024 increased by 15.4% compared to March 2023, and by 8.4% over the March average for the years 2017-2019. The supply of these high-end properties also rose significantly, with new listings up 20.0% year-on-year and 86.2% compared to the pre-pandemic March average.
However, the under offer numbers in this sector present a mixed picture. There was a significant drop of 43.2% from the previous year, though it is important to note that March 2023 was unusually high. When compared to the pre-pandemic average, there were still 31.3% more properties under offer this March.
On the wider prime London market, the sales activity was less encouraging. Sales were down by 19.3% compared to last March and 10.0% below the pre-pandemic March average. Despite this, the rate of annual price declines slowed to -3.8%, indicating a potential stabilization in pricing.
Rental growth in prime London showed a modest increase of 3.8% in March, bringing rental values to 28.0% above the pre-pandemic average. However, the rental market remains calm, with newly agreed lets decreasing by 9.1% year-on-year.
Nick Gregori, head of research at LonRes, commented on the market dynamics: “March is typically a more active month for the prime London sales market, and while sales picked up slightly compared to February, they were down relative to both the same month last year and the average pre-pandemic March, by 19.3% and 10.0% respectively.”
Gregori further explained the buyer and seller behavior: “Some buyers appear to be happy to just ‘wait and see’, hoping for or expecting further price falls and lower interest rates. Existing vendors that don’t need to sell also seem to be content playing a similar waiting game, leading to something of a stand-off and fewer transactions overall.”
He also noted the impact of broader economic and policy changes on the market: “The top end of the sales market is also seeing growing levels of new instructions, with available stock increasing. While agreed sales of £5m+ properties are relatively much higher than in the wider market, there were some signs in March that demand has been weakening. The second half of March saw lower numbers of under offers and exchanges.”
The prime London lettings market, while subdued in March, has been showing a steady annual rental growth, providing a slight relief for tenants after the significant increases of the previous years.
