December Update

Hope everyone had a Merry Christmas and continue to have an enjoyable festive season! 

What a year it has been for the London property market – much like the state of UK politics, it’s been full of twists and turns. It started out as a record year, with January setting the record of the as the liveliest start of the year ever for new buyers registering with agencies and house owners requesting valuations. At the time, the average asking price in London cost £627,286 – 4.2% higher than the previous year. Today, the average asking price increased to £666,507, but is 2.3% lower than November. This is in line with seasonal trends as Christmas hits, however the cost of living/rise in interest rates has also had an effect on this. 

 The Outlook 

The outlook for the general London market in 2023 is quite bleak – Savills are predicting a drop of 12.5% and Knight Frank a drop of 6% and a further 4% in 2024. They believe the drop in prices will be short lived, with an increase in prices returning in 2025. The good news is that the numbers are looking better for prime central London – Savills are predicting a 2% drop in prices in 2023 however an increase in prices by 13.5% in the next 5 years. Knight Frank is predicting a 3% drop in 2023 followed by a 7.5% growth in prices over the next 5 years. 

My Take 

This volatility has made finding the right home more challenging. Most sellers in prime central London are not impacted by the cost of living or the rise in interest rates – therefore if sellers do not need to sell now they are choosing not to. This means less homes are coming on the market. The good homes that are priced reasonably are selling relatively quickly. Earlier in the year I showed clients of mine an off-market flat that was still being renovated that was asking £1,750,000 – it wasn’t right for the clients so we didn’t offer. It came on the market towards the end of last month at £1,800,000 and was finished beautifully – it went under offer within a few weeks at over the asking price. 

This is why working with a good buying advisor is key, especially in a volatile market. It is still a good time to buy, however getting the right advice is essential to pick a good home in the right location at a fair price. 

The interest in London returns 

For a while during the pandemic, Cornwall overtook London as the most searched location on Rightmove (the property search portal). Buyers were looking for more space away from the city, a trend that has been in reverse as in more recent times. In 2022, London was the most popular location on Rightmove with an increase of 9% in searches. Cornwall dropped by 18% and Devon by 17%. In comparison to Cornwall, London had 36% more buyer searches which is the largest gap since 2019. 

The interest isn’t only with UK buyers but with foreign buyers too. According to Carter Jonas (an estate agency) there has been a flock of dollar based buyers who are taking advantage of the weak pound in prime central London. They are expecting this to continue into the new year, with Dollar based buyers coming from the US, Asia and the Middle East. 

If you are interested in purchasing a home in London please click here for a free consultation.