Latest London Property News: July 2023
Market Overview
Despite increased interest rates and price sensitivity, residential pricing in prime London has been described as resilient in the second quarter of 2023. As we go into the second half of the year, there will also be relief for mortgage holders with UK inflation falling further than expected in June to 7.9%, meaning forecasts have eased for how aggressively the Bank of England will raise interest rates over the coming year. The drop exceeded City forecasts for a decline to 8.2% and speculation by the financial markets is that the Bank of England will not exceed interest rates above 6% early next year.
A key feature reported by this quarter has been the divergence appearing between demand in prime central and outer prime London, which can largely be attributed to the difference between cash and equity rich buyers and other groups in their ability to transact. Cash buyers who are not exposed to anxieties around rising interest rates dominated demand in the second quarter. Year to date, cash buyers have accounted for 71% of prime central London deals and 35% in outer prime London, according to Savills records. Mayfair (+1.1%), Westminster (+0.4%) and Marylebone (+0.2%), popular with pied-a-terre and international buyers were some of the strongest performers on the quarter. More domestic markets such as Richmond (-0.9%) and Holland Park (-1.0%) that outperformed during the pandemic have seen value falls over the first half of the year. This is certainly due to international travel picking up at the start of the year, translating into demand. Looking at year to date figures, Mayfair & St. James’s is the best performer in the central area, with an annual increase in transactions of 3.6%. From the prime inner catchment Marylebone has seen a 21.7% rise, and while all areas in prime fringe are down, Bayswater & Maida Vale has seen the smallest fall at -11.3%, according to LonRes.
Looking at the top end of the market, we did see slowing again in Q2. £5m+ sales volumes were down by 18.9% over the first half of the year compared to 2022. But with increases in new instructions (+20.3%), fall throughs (+27.5%) and price reductions (+96.5%) on the same basis, this appears to be a buyers’ market.
Broken down by property type, the data for 2023 so far suggests that demand for flats and houses is more equal. This follows a period where houses were significantly more popular as buyers looked for more space during the pandemic. Relative to their 2017 to 2019 averages, transaction levels for both houses and flats are slightly up. The only significant difference is with relative levels of fall throughs, which is much higher for flats. This is likely due to issues with building safety act requirements and leases rather than the buyers. The trend for pricing is similar. In the past year, flats have performed slightly better with growth of 2.2%, vs. 1.6% for houses. Compared to Q1 2020, flat prices in Q2 this year were 8.7% higher compared to 11.8% for houses. Despite apparent changes in buyer preferences, these figures show that there has not been much negative impact on sales volumes or pricing for flats relative to houses over the past three years.
Marylebone & Medical Territory Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 14.6% higher than they were 5 years ago, with buyers paying £209 more per square foot than they did 5 years ago.
- Achieved prices per square foot have increased by 2.1% for flats over the last year, and have increased by 18.9% for houses.
- 23.8% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £2,029,219 for flats and £5,127857 for houses.
Current Availability: Key Findings
- 38.0% of properties on the market are priced at £1 million or higher.
- 49.8% of properties currently available have been on the market for more than six months.
- 17.5% of flats and 23.3% of houses on the market are currently under offer.
Mayfair & St James's Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 0.4% lower than they were 5 years ago, with buyers paying £9 less per square foot than they did 5 years ago.
- Achieved prices per square foot have decreased by 5.8% for flats over the last year, and have decreased by 16.9% for houses.
- 7.7% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £2,982,476 for flats and £8,900,000 for houses.
Current Availability: Key Findings
- 71.4% of properties on the market are priced at £1 million or higher.
- 51.7% of properties currently available have been on the market for more than six months.
- 13.0% of flats and 15.4% of houses on the market are currently under offer.
Knightsbridge & Belgravia Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 0.3% lower than they were 5 years ago, with buyers paying £5 less per square foot than they did 5 years ago.
- Achieved prices per square foot have decreased by 3.2% for flats over the last year, and have decreased by 19.7% for houses.
- 6.5% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £4,106,222 for flats and £4,702,167 for houses.
Current Availability: Key Findings
- 67.9% of properties on the market are priced at £1 million or higher.
- 51.9% of properties currently available have been on the market for more than six months.
- 14.1% of flats and 6.9% of houses on the market are currently under offer.
Chelsea Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 9.2% lower than they were 5 years ago, with buyers paying £149 less per square foot than they did 5 years ago.
- Achieved prices per square foot have increased by 3.5% for flats over the last year, and have increased by 2.1% for houses.
- 20.6% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £1,403,475 for flats and £5,755,947 for houses.
Current Availability: Key Findings
- 36.1% of properties on the market are priced at £1 million or higher.
- 43.7% of properties currently available have been on the market for more than six months.
- 16.8% of flats and 12.4% of houses on the market are currently under offer.
Fulham & Earls Court Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 3.3% higher than they were 5 years ago, with buyers paying £33 more per square foot than they did 5 years ago.
- Achieved prices per square foot have increased by 0.3% for flats over the last year, and have decreased by 0.9% for houses.
- 23.2% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £915,800 for flats and £2,119,068 for houses.
Current Availability: Key Findings
- 47.1% of properties on the market are priced at £1 million or higher.
- 47.1% of properties currently available have been on the market for more than six months.
- 18.5% of flats and 24.0% of houses on the market are currently under offer.
South Kensington Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 5.9% higher than they were 5 years ago, with buyers paying £93 more per square foot than they did 5 years ago.
- Achieved prices per square foot have increased by 1.7% for flats over the last year, and have decreased by 7.5% for houses.
- 21.3% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £2,019,091 for flats and £3,637,944 for houses.
Current Availability: Key Findings
- 50.5% of properties on the market are priced at £1 million or higher.
- 45.2% of properties currently available have been on the market for more than six months.
- 17.8% of flats and 2.8% of houses on the market are currently under offer.
Kensington, Notting Hill & Holland Park Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 8.5% higher than they were 5 years ago, with buyers paying £109 more per square foot than they did 5 years ago.
- Achieved prices per square foot have increased by 1.3% for flats over the last year, and have increased by 1.0% for houses.
- 21.2% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £1,807,182 for flats and £5,012,853 for houses.
Current Availability: Key Findings
- 35.1% of properties on the market are priced at £1 million or higher.
- 43.9% of properties currently available have been on the market for more than six months.
- 21.6% of flats and 11.9% of houses on the market are currently under offer.
Bayswater & Maida Vale Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 2.0% higher than they were 5 years ago, with buyers paying £22 more per square foot than they did 5 years ago.
- Achieved prices per square foot have decreased by 0.3% for flats over the last year, and have decreased by 3.6% for houses.
- 17.6% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £1,140,626 for flats and £3,431,250 for houses.
Current Availability: Key Findings
- 21.2% of properties on the market are priced at £1 million or higher.
- 42.2% of properties currently available have been on the market for more than six months.
- 18.1% of flats and 11.2% of houses on the market are currently under offer.
St John's Wood, Regents Park & Camden Q2 2023 Sales Report
Sold Apr-Jun 2023: Key Findings
- Average flat prices are now 0.2% higher than they were 5 years ago, with buyers paying £2 more per square foot than they did 5 years ago.
- Achieved prices per square foot have decreased by 1.8% for flats over the last year, and have decreased by 4.7% for houses.
- 15.0% of properties sold within 3 months, compared with 19.6% for the whole of Central London.
- Properties sold in the last 3 months achieved an average price of £1,202,856 for flats and £6,150,978 for houses.
Current Availability: Key Findings
- 30.4% of properties on the market are priced at £1 million or higher.
- 45.7% of properties currently available have been on the market for more than six months.
- 20.5% of flats and 7.3% of houses on the market are currently under offer.
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