House prices in London: asking prices up on a year ago but still lower than pre-lockdown
Loosening lockdown has created a buoyant market in the immediate term.
Asking prices for London homes have risen slightly compared to last June — but they are still 1.7 per cent lower than they were before coronavirus lockdown hit the UK in March.
The average asking price of a home in the capital is now £628,000, according to property portal Rightmove’s latest house price index.
The website estimates 175,000 sellers would have listed their home between March and May but were unable to do so because of stay-at-home restrictions. New figures suggest many of them are back in action now, with a record number of homeowners in England requesting valuations since May 13 when the property market reopened.
However, Rightmove’s Miles Shipside said the level of missed sales means the market “will be playing catch-up for the rest of the year”.
In the same period, 40,000 new sales were agreed, while the number of people contacting estate agents hit a new daily record, 40 per cent higher than the level seen in early March.
Andy Shepherd, chief executive of London estate agents Dexters, said: “We’re tremendously busy across all of our 70 London offices. Transaction numbers are increasing daily, over the past two weeks we’ve agreed sales on over 250 properties and arranged lettings on over 600, so 85 a day or 10 an hour in the working week.
“Immediately before lockdown we’d seen the best market for five years. However, comparing last week with the first week of March we are 60 per cent up on transactions.”
Rightmove data shows London sales between mid May and the start of June were agreed at 97.5 per cent of the asking price, suggesting buyers were getting lower discounts than they were in February this year. However, asking prices have also declined since then, so sold prices are likely to be at a similar level to those seen before the pandemic struck.
“The figures at present show an activity-boosting and price-underpinning dynamic between supply and demand, driven by low mortgage rates and pent-up housing needs,” said Miles Shipside. “This positivity will be challenged when unemployment spikes upwards, or if mortgage lenders start to pull back from the market.”
The latest survey from the Royal Institution of Chartered Surveyorsshowed the weakest house price reading in May since 2010, while a balance of 16 per cent of surveyors said they expect house prices to fall in the year ahead.
Simon Rubinsohn, RICS chief economist, said: “Following the reopening of the housing market in England, pre-Covid sales that were in the pipeline are now largely going through.
“This is encouraging but it remains to be seen how sustained this improvement will prove.
“Much will inevitably depend on the macro environment and, in particular, the resilience of the jobs market as the furlough scheme unwinds. For the time being, respondents to the survey see the trend in transactions being broadly flat.”