November saw a slowdown in the prime London sales market following a strong October, according to a study by independent property analyst LonRes.
The analysis found transaction numbers in November were 4.2% lower than the previous year and 19.4% below the 2017-2019 average.
Despite this dip, the number of properties going under offer rose by 20.4% compared to last November, with demand showing signs of improvement for October and November combined.
The number of new sales instructions in November increased by 4.4% compared to last year and was 19.5% above the pre-pandemic average.
Average achieved prices across prime London fell by 1.8% annually.
In the £5m-plus market, transactions were down 7.1% year-on-year, although available stock increased by 23.3%.
In contrast, rental growth in the lettings market remained steady, with annual growth at 1.6%.
However, activity was subdued, with lets agreed down by 12.5% and new instructions falling 15.6% from last year.
Available rental properties were 8.7% lower than the previous year.
Nick Gregori, head of research at LonRes, said: “November was always going to seem quiet compared to October but, in context, the latest data suggests that activity in the prime London sales market is improving.
“October and November combined recorded almost a quarter more sales than the same two months last year.
“There’s more choice for buyers but there were also more properties going under offer, indicating further growth in sales in the pipeline.
“Feedback from agents suggests they are focusing on getting potential buyers and sellers ready for a renewed push in the new year.”
Gregori added: “Values are a less positive story, with price growth remaining stubbornly flat despite the recent flurry of transactions.
“With stamp duty, borrowing costs, and the price of building works all rising in recent times, the pressure on values has been mostly downwards, regardless of any increases in demand.
“Prime central London is probably most impacted by these factors, so it is no surprise that values have struggled the most in the highest value markets.”
He said: “Higher supply is also part of the mix in terms of lower price growth.
“The top end of the market has seen the largest increases in the number of homes for sale, and demand has slowed from the high levels of 2021 and 2022 in the past couple of years.
“The gap between transaction levels for houses and flats in this market has been closing over this period after a significant divide opened up in the post-pandemic recovery.”
He added: “The prime London lettings market has been on a steadier course, with most metrics broadly mirroring last year’s levels.
“Annual rental growth remains relatively low at 1.6%, while new instructions and agreed lets both fell in November.
“Continued low supply is limiting activity levels across most price points.
“The very top end of the lettings market may buck this trend, with tax changes tipping the balance away from buying for high net worth movers to London.”
