The London housing market finally has a spring in its step. For the first time since 2016, homes in the capital are more likely to sell for more than their asking price than properties elsewhere.
Of the homes sold in London in the first quarter of this year, 25.1% sold above their final asking price, up from 21.6% in 2023 and almost double the proportion seen in 2019 (13.3%). Meanwhile, across England and Wales, 24.5% homes sold for more than the final asking amount in the first three months of 2024.
Homeowners in London have also seen the greatest improvement in the average number of days it takes for a property to receive its first offer from a buyer, irrespective of whether the offer is accepted. In the first quarter, this metric fell to 57 days, 24 days quicker than last year.
While the average property in Great Britain now receives an offer within 52 days, this masks wide regional variations. (Interestingly, the North East, which was England’s fastest-moving market in 2023, became its slowest in the first three months of this year, seeing the time taken to receive an initial offer rocket by about a month, from 46 to 76 days.)
In another positive sign for the capital’s property market, 22% of homes here went under offer within two weeks of being marketed in the first quarter of 2024. This is up from 15% in the same period in 2023 and means that the share of homes selling within a fortnight in the capital equals the share for Great Britain as a whole for the first time since 2015.
While London remains the most expensive place in the country to buy a property, prices here did not rise as much as elsewhere during the pandemic as many buyers looked outside the city in the race for space.
At an average of £517,730, prices in the capital are 3.9% down over a year and 5.0% below their last peak in August 2022. This perception of London property now being fair value, as well as a reduction in mortgage rates from their highs last summer, is likely to have prompted buyers to pounce.
Indeed, as we have discussed recently, London has seen the biggest increase in homes being snapped up by first-time buyers, who accounted for a record 50% of all purchases so far this year, up from 41% in 2023 and from 28% a decade ago. The desire to escape the overheated rental market in the capital is also a contributing factor that has prompted many tenants to become homeowners.
The signs from the start of this year all point to London starting to outperform the rest of the country again, as we have been predicting. We expect this to become evident in prices from the end of this year, after the General Election has taken place, led by prime London.
