Sales activity remains slow across the prime London market, with property sales in March down 19.3% compared with the same month last year.

Pricing did record a more positive result, with average achieved values rising month-on-month and the pace of annual price falls slowing to -3.8%, according to the data from LonRes.

New instructions in March rose by 5.4% on an annual basis, 14.2% above the 2017-2019 (pre-pandemic) March average. With new properties adding to stock already on the market, stock continues to grow. At the end of March stock on the market was 9.7% higher than a year earlier.

Monthly Prime Data – March

Source: LonRes                                                                                                                     (Note: all price and rent figures based on £ per sq. ft. values)

March produced further evidence that rental growth in the prime London lettings market has stabilised, marking four consecutive months with annual growth of between 3 and 4% – it was 3.8% in March. 

Average rental values in March were 28% above their 2017-19 (pre-pandemic) average.  

Letting activity fell back a little after two good months to start the year. Newly agreed lets dropped by 9.1% compared to last March, although the total for the first quarter was 2.4% up on last year. 

There were 2.9% more new letting instructions in March than a year earlier, with the figure for the first quarter up 14.4% on an annual basis.  Across prime London there were 38.4% more properties on the market to let at the end of March than a year earlier, but that figure is 46.6% lower than at the end of March 2019. 

Breaking these results down by price point shows that the shortage of rental properties is more acute at the more affordable end of the market.  For properties available at less than £750 per week, there are 9% more homes on the market compared to a year ago but 71% fewer than five years ago.  At higher price points the longer-term drop is much lower, for example above £2,000 per week there are only 16% fewer homes available than four years ago.

Nick Gregori, head of research at LonRes, said: “March is typically a more active month for the prime London sales market and, while sales picked up slightly compared to February, they were down relative to both the same month last year and the average pre-pandemic (2017-19) March, by 19.3% and 10.0% respectively. This was not helped by the early Easter break.  Average achieved values also picked up on a monthly basis, with the rate of annual falls decreasing to -3.8% in March.

“Some buyers appear to be happy to just ‘wait and see’, hoping for or expecting further price falls and lower interest rates.  Existing vendors that don’t need to sell also seem to be content playing a similar waiting game, leading to something of a stand-off and fewer transactions overall.

“These market conditions are making it difficult to conclude deals, but they are eventually being done.  We’re seeing fewer withdrawals and fall throughs than expected given the volume of stock for sale.  Agents are reporting that they are busy with enquiries from new vendors keen to sell, so we continue to see that available stock for sale is increasing, with 9.7% more properties on the market at the end of March than a year prior.”