London’s prime property market has seen a decline in sales of 21.9% in the first quarter of 2023 compared to the same period last year, according to data from LonRes.
However, new instructions have risen slightly, with a 2.4% increase in March compared to the previous year.
Despite the decline in sales, both sales and new instructions are still above their pre-pandemic averages, at 1.6% and 15.4% respectively.
Average achieved prices in all three prime London areas also fell in March, with the annual change slipping to -4.9%. This reverses some of the gains made in 2022 and brings values back 2% below their 2017-19 level.
Prime central London prices have been the most volatile, experiencing the biggest recent falls with an annual decline of 8.2% in March, after reaching their peak growth of 13.2% in June 2022.
Looking ahead, the number of properties going under offer fell slightly by 2% in March compared to March 2022. Year to date, there has been an 11% decrease in homes going under offer across prime London, which could indicate a further slowdown in sales activity in the coming months.
With new instructions and average discounts on prices both on the rise, there may be further downward pressure on prices in the months ahead.
The rental market in London also showed signs of slowing down, with the rate of annual rental growth slowing slightly to 7.3% in March.
The lack of available stock continues to be a problem, with the number of new lets agreed down by 16.9% annually in March.
The number of properties going under offer in the rental market also fell by 9.3%, and new instructions were 12.1% lower, indicating that rental market activity remains below pre-pandemic levels. The under £500 per week section of the market has been particularly hard hit by these trends.