London-focussed property data firm LonRes says there are signs of green shoots in the capital’s prime housing market.

January saw a rise in the number of properties going under offer and an increase in the number of new sales instructions coming to the market.  Fall-throughs and withdrawals have also fallen. However, this data which is forward looking, is yet to translate into actual sales.  

As a result, values in January continued to fall slightly month-on-month, with the annual change in achieved prices across prime London falling to 7.1 per cent – the biggest drop in almost five years.  Compared to January 2014, 10 years ago, prices are only 0.8 per cent higher.

Activity also continued where it left off last year, with transactions in January 15.5 per cent lower than the same month a year earlier and 6.9 per cent lower than the 2017-19 January average. 

However, the number of properties going under offer looks more positive, with January seeing an annual increase of 5.4 per cent, taking levels 15.6 per cent above the pre-pandemic average.

New sales instructions in January were also up by 4.2 per cent on the previous year and 9.1 per cent above the 2017-19 average.  Combined with the lower level of sales agreed, this resulted in the number of available homes for sale across prime London being 5.4 per cent higher at the end of January than at the same point last year.

LonRes’s additional metrics – fall throughs, withdrawals, and price reductions – indicate a relatively healthy market. Fall throughs and withdrawals in January were lower than a year ago and price reductions are only six per cent higher.  With under offer numbers looking significantly better than sales, this continues to lend evidence to the theory that deals are being agreed but are just taking longer to conclude.

Values across prime London are similar to a decade ago on average, but at area and neighbourhood level there have been some variations in performance.

Prime Central London has seen the least growth over 10 years, at 3.1 per cent, but even within that there are some big differences between adjacent neighbourhoods. Mayfair and St. James’s saw a change of over 20 per cent, although this will have been boosted by new supply of high-end developments rather than like-for-like value growth. 

Table: Change in Prime London Values Over Past 10 Years by Neighbourhood 

Source: LonRes

January saw activity in the £5m-plus market continue to slip back from a high base, but transaction levels are still well ahead of historical trends.

Sales were 17 per cent lower than the same month a year earlier but 64 per cent higher than the pre-pandemic (2017 to 2019) January average. The number of properties at £5m-plus going under offer in January this year was unchanged from January 2023, but 28 per cent ahead of the 2017-19 average.

The supply of high-end homes for sale appears to still be increasing.  New instructions in January this year were 42 per cent higher than last year and 148 per cent more than the 2017-19 January average.  Even with the healthy sales volumes noted above, the stock of £5m=plus homes available to buy at the end of January was 25 per cent higher than a year earlier.

A longer-term comparison of stock for sale by price band shows that the build up of available £5m-plus stock has been a clear trend since early 2022.