Prime London’s housing market lacks its usual seasonal spring bounce with prices flat and transactions down, admits property data consultancy LonRes.
And there are signs of demand starting to cool in the rental market, although a lack of stock supports rental growth for now.
Annual rental growth of 7.4 per cent in April remains similar to the previous month.
New lets were down 26.2 per cent on an annual basis and new instructions were 12.2 per cent lower.
Activity is also muted in the sales market.
Sales activity in April was 34.7 per cent lower than in 2022 with the year to date total down more than 24 per cent.
The number of properties under offer also fell, with an annual change of 11.7 per cent in April and 11.0 per cent year to date.
Perhaps the only glint of buoyancy was in the £5m-plus market which picked up in April, after a slow March.
Agreed sales in this expensive niche were up 26.1 per won last year and were more than 50 per cent above the 2017-19 average.
The level of new instructions fell after the highs seen earlier in 2023, but the number of properties under offer in this market remained high.
LonRes managing director Anthony Payne says: “As the peak selling season enters its stride, there are continued signs that the wider Prime London housing market is slowing.
“Anecdotally agents are telling us that there is no shortage of buyers and those buyers have money to spend.
“However, the housing market is a sector underpinned by confidence and at the moment sellers are referencing prices of yesteryear, while buyers are looking to a future in which they expect prices to fall. And there’s a gap between the two, that is causing the market to stall.
“For those vendors who fail to recognise the true value of their home in today’s market, the only path is one that leads to a downward price drift. Small price reductions that edge towards the true value of a property frequently result in a bigger reduction later down the line.
“Our data shows, new instructions (or properties coming up for sale) are on the rise, which for buyers means more choice. It’s a competitive marketplace, which for anyone seriously wanting to sell, means competitive pricing. Buyers have time and indeed are taking the time, to sit it out.
“On the Prime London lettings front, strong demand against a backdrop of weak supply continues to rumble on. Although we are beginning to see early signs that demand is starting to cool. New lets were down in April this year, compared to last, but a shortage of supply has continued to act as a support to prices.”