House prices in prime London: rise in number of sales but price of property in expensive postcodes still lower than last year
Central London is starting to see the green shoots of property market recovery, with more deals agreed and more homes coming up for sale compared to last year, according to new research published today.
Meanwhile, agents across the rest of the capital report a busy market with buyers scrambling to grab homes with gardens, as the threat of another Covid-19 lockdown looms.
Property analyst LonRes reports that new instructions in prime London almost doubled year on year. The number of properties going under offer last month was up 21 per cent on September last year. Prices are still slipping slightly, however — down 1.6 per cent during the same period.
History suggests that the health of the prime central London market — currently dominated by domestic, not international, buyers — has a direct knock-on effect on the rest of the capital.
“Normally prime central London tends to lead the housing cycle,” explained Marcus Dixon, head of research at LonRes. “Activity there then filters out to the rest of London and other parts of the UK.”
This time around, however, things are different, with mounting evidence that the market is already stronger in parts of the capital and the rest of the UK. “The stamp duty incentive has been really helping it seems,” said Dixon.
Dominic Agace, chief executive of Winkworth, said that despite a “rapid increase” in the number of house hunters across London, post-lockdown prices are not yet increasing.
And his prediction is that, while coronavirus continues to create chaos and uncertainty, prices will stay flat for at least the next six to 12 months.
Ali Shaygan, who covers east London for Yopa, said that after a brief summer bounce prices have now flattened out as more homes have come on to the market.
“Houses are in high demand regardless of the size and price, but the struggles faced by first-time buyers in the mortgage market mean that demand for flats is relatively low at the moment,” he said.
Shaygan suspects that the market will be reasonably strong until the New Year when the Brexit transition and end of the stamp duty holiday will combine to quiet demand.
Chris Mullin, sales manager at Hamptons International in Muswell Hill, said that although the world has changed dramatically in the past year, demand for homes near good schools continues to drive the local market. “The deadline for primary schools for the 2021 academic start date is January 2021,” he said.
“This doesn’t change and means that regardless of what’s happening in the wider world, there is still a market for family homes close to schools.
“Two properties where buyers pulled out in early lockdown attracted better offers since we reopened by two to three per cent, and we have found that the buyers post lockdown have been more driven, possibly because they felt they could have missed out earlier in the year and they don’t want to risk leaving it until next year.”
In Putney Nicholas Austin of Riverhomes also reports that houses are the hottest ticket in the current market. “We had two family homes with large gardens that were sticking before we went into lockdown but as soon as lockdown was lifted, they sold almost immediately,” he said.
However, he feels that the end of furlough and the return of stamp duty will halt current market activity. “It is inevitable,” he said. “I doubt prices will drop much but activity will.”