Activity in the prime London sales market has slumped following the change in stamp duty rates, says data firm LonRes.
Prices have dropped slightly on an annual basis, while new instructions and price reductions continued to rise.
There were 26.2% fewer transactions in April than the same month a year ago, and 22.9% fewer than the 2017-2019 (pre-pandemic average).
The number of properties going under offer was 15.7% lower than a year ago but 9.6% higher than the 2017-2019 (pre-pandemic) April average.
New instructions increased in April, up 8.1% compared to the same month last year and 29.2% compared to the 2017-2019 April average.
This continues the rises seen each month this year so far, but at a slower pace. The number of price reductions followed a similar trend, with a 36.4% rise in April compared to last year being smaller than the equivalent figure for March.
Stock on the market at the end of April was 11.2% higher than a year earlier and 45.0% above the level five years earlier (April 2020).
Previous stamp duty holidays have distorted monthly activity levels and the one that ended on March 31 this year was no different.
One months’ worth of figures can often prove volatile, but by looking at activity for the months of March and April combined provides a clearer indication of the state of the market. Transactions over the past two months were up 5.7% compared to March and April 2024, and 8.9% above the 2017-2019 (pre-pandemic) average for the same two months.
Under offer numbers – a forward indicator of deals in the pipeline – have slipped a little on an annual basis over the past two months but are 14.1% above their 2017-2019 average level.
New instructions have risen more quickly than the demand indicators, with an 11.8% annual rise over March and April and 29.9% growth relative to their 2017-2019 average.
Despite the positives on the demand side, price reductions have continued to grow in number, rising by 54.1% in March and April compared to the same two months last year.
These adjustments to asking prices are feeding through to achieved prices, which recorded another decrease in April.
Average values across prime London fell by 2.9% on an annual basis and are now 1.3% below their pre-pandemic (2017 to 2019) average level.
The average discount from initial asking price across prime London was 8.9% in April.
The latest figures on pricing continue a long trend of relatively poor performance – average values in many parts of prime London are in line with where they were back in 2013. With sentiment around the UK and global economies remaining mixed, scope for significant price growth appears limited.
On a positive note, although interest rates are high in a medium-term context, they are trending downwards from the recent peaks of 2022-2023.
The £5m+ market stabilised in April after an up-and-down first quarter.
Transaction numbers were unchanged from April 2024 and 34.5% above the 2017 to 2019 April average. For the year-to-date activity is around 10% down on last year.
High supply remains the headline story for the top-end of the prime London market. The pace of growth in terms of new instructions slowed in April, with a 4.2% annual rise, but the number of £5m+ homes on the market is at an all-time high – it has increased by 23.0% in the 12 months to the end of April and sits 69% above its pre-pandemic (2017 to 2019) level.
Other price points have also seen recent rises, but not to the same degree.
