Latest London Property News: April 2024

Market Overview

The £5m+ market, which has been the best performer over the past three years, showed a 1.3% rise in transactions compared to Q1 2023 and was up more than 28% compared to the 2017 to 2019 average. On the supply side, there are rising levels of new instructions and price reductions, suggesting growing vendor motivation and at the end of March there were 9.7% more homes for sale across prime London than a year earlier. These observations do apply more strongly to the £5m+ market when looking at it independently, where available stock is up by 26.5% over the same timeframe.

The early Easter break may have had an impact on the number of properties that were going under offer, as the week-by-week data showed a clear drop towards the end of March. The Budget on 6th March may have also may contributed. The changes to Multiple Dwelling Relief and ‘non-dom’ taxation are relatively small, affecting a small proportion of the market even in central London, but are still negative in terms of wider sentiment.

There are two key factors influencing the longer-term outlook for the prime London market, one domestic and one international. At home, the build up to a general election is likely to dominate any views on what happens next, although the short odds on a change of government mean that a lot of the impact is likely to be absorbed before the actual vote. Overseas, there is a growing possibility that Western nations will be drawn further into the conflict in the Middle East. This increases the risk of volatility in global financial markets – including property – although we have seen prime London property act as a ‘safe haven’ for investors in similar past circumstances too.

During and after the pandemic the so-called ‘race for space’ was a natural response to buyers spending more time at home and wanting more space, inside and out. Over the past decade houses have always attracted a premium over flats across prime London on a £ per sq ft basis, but by the end of 2017 this was down to 1.1%. By Q1 2020 it had grown to stand at 7.0% peaking at 15.6% at the end of 2021. After falling back slightly in 2023 it has stayed well above pre-pandemic levels since, sitting at 11.9% in Q1 2024.

Of course, it is not possible to attribute this change entirely to a post-pandemic shift in buyer preferences. Leasehold properties in general have had some negative press over the past few years due to rising service charges and building safety compliance issues, but the timing of the change seen here from mid-2020 gives a strong indication of cause and effect. Analysis of transactions over the same period initially showed a similar story. In Q2 2020 all activity slowed, but flat sales fell faster. By late 2020, house sales were increasing again while flats were down by around 15% compared to Q4 2019. Flat sales peaked at 26% above their 2019 level in Q2 2021, whereas houses reached almost +60% at the end of that year. Unlike for values, the gap has been closing since then, with only a couple of percentage points separating the two as of Q1 2024.

Q1 2024 Sales Reports

Here are the key findings for the quarterly figures complied by London’s premier data source LonRes.