The House Edge, the quarterly market insight report by London House, compiles industry data from property market intelligence group, Dataloft, and direct insight from our expert sales and lettings team. Below we breakdown our key findings from our Q1 report for the PCL Spring London Market.
On average properties sell 10 days faster between April and June than between November and January. It is a widely held view that spring is the time that the housing market steps up a gear, prospective buyers and sellers buoyed by longer and sunnier days, with late spring/early summer marking the busiest time for the sales market. In comparison, September/October is the busiest time for rentals, thanks in no small part to the return of students to universities and the start of many graduate internships and trainee schemes in the capital.
Traditionally across the UK the average time taken to sell a property each year has fallen from March to a low in the month of June or July. Data indicates that on average properties have sold over 10 days faster between April to June than between November and January (Dataloft, Rightmove, based on 2015-2019). The closure of the market in the spring of 2020, stamp duty incentives during 2021 and the fast-paced market that epitomised the start of 2022 have meant in recent years the usual ebb and flow of the market has somewhat disappeared. However with predictions that 2023 is set to be more in-tune with the last
so-called normal market of 2019, a more usual pattern of activity is expected this year.
London, and specifically the prime London market, has not always reacted in the same way to the wider housing market, being more heavily influenced by political changes (UK elections, the EU Referendum); global economic policy (London remains a safe haven for investment); and exchange rate fluctuations. However, data from LonRes shows that in nearly all years since 2014, with the exception of 2016 (the 3% surcharge on additional homes implemented from April 1st) and 2020 in the height of the Covid-19 market shutdown, a higher proportion of sales has taken place in April and May or May and June than at the start of the year in January and February. If this were to hold true for 2023, it indicates sales volumes over the coming months will continue to edge upwards. Sunny skies and lighter days undoubtedly impact mood and optimism. The latest data for buyer optimism from the GfK, albeit still negative, shows a tentative, slow improvement in outlook, which, with economic indicators remaining steady and cost-of living rises anticipated to have peaked, is expected to continue over the coming months.
Levels of price reductions in the sales market currently remain lower than in pre-pandemic times. Meanwhile, the net balance of agents anticipating price falls over the spring (April to June) is at its lowest level since the summer of 2022, and at -24 is a substantial improvement since October (RICS). Agents in the North, North West and Wales are the least negative regarding price falls in the next three months, all areas where affordability is less stretched. It is therefore encouraging that London places fourth for this metric.
Sales levels per surveyor to date in 2023, while lower than the market in 2021 and 2022, are stronger than in the immediate pre-pandemic period. Stock levels per agent are marginally higher than in 2019, while buyer enquiries also show an improvement to 2019. Greater choice for buyers is also emerging as the number of new instructions to the market rise.
Prime London Sales Highlights
£1,500 Average £psf achieved, up 1.1% y-o-y
£1,406 Average £psf achieved on apartments, down 1.1% y-o-y
£1,872 Average £psf achieved on house sales, up 8.7% y-o-y (N.B. only 4 sales + £3,000 psf)
£1 million + market:
£1,779 Average £psf achieved, up 3.4% y-o-y
£1,720 Average £psf achieved on apartments, up 0.6% y-o-y
£1,904 Average £psf achieved on house sales, up 9.1% y-o-y (N.B. less than 100 recorded sales)
8.3% Average price reduction on initial asking price for apartments, up from 7.6% Q1 2022
6.5% Average discount on initial asking price for houses, up from 6.2% Q1 2022