The price of property coming to market in Greater London has risen by 1.2% (+£7,296) this month, though the annual rate still remains in negative territory at -0.5% (-£3,360).
The upper end sector is showing signs of coming out of its deep and lengthy price trough, which has led to the monthly change in Inner London of +1.2% out-performing Outer London’s +0.8%.
Miles Shipside, Rightmove director and housing market analyst comments: “Substantial price reductions in some parts of the London market over the last two years are now helping to improve sentiment and momentum, with renewed buyer activity evident at the upper end. Buyer affordability and sentiment have been increasingly stretched by asking price rises of over 50% in London between 2011 and 2016 outstripping buyers’ willingness or ability to pay.
“However, parts of London are seeing evidence of a recovery with two subsequent years of price falls now encouraging an upturn in buyer activity in the upper end as they judge that there is now some good value on the streets of London.”
The upturn in London’s buyer activity this month is in the upper end of the London market, above £750,000, comprising around a fifth of all transactions in London.
The number of sales agreed above £750,000 is up by 6.0% on the same month a year ago, while below £750,000 it is down by 3.6%. Asking prices in Inner London peaked in February 2016 at £823,000, and are now £756,000, which has helped with the increase in buyer activity.
The activity uplift is even more marked in predominantly central Zone 1 where many upper end properties are located. The number of sales agreed is up by 10.5% this August compared to August 2017.
Shipside observes: “It’s been a hard and rocky road to recovery in the upper end of the London market, taking two successive years of price falls. The price of property coming to market in Zone 1 is now 17.5% lower than its peak in October 2015, but has made gains of 4.5% over the past year.
”The recovery in the upper end is encouraging but the painful and drawn-out process of price reductions has yet to run its course especially in parts of Outer London and the commuter belt that saw very sizeable and unsustainable price rises. More sellers and agents need to re-adjust their expectations to be in line with what buyers are willing or able to pay, as it seems that buyers are out there if the price is right.”