London Housing Market Report: August 2023

19/09/2023
(Last Updated: 27/09/2023)
29
3 min read

Average Asking Price

£688,500
(July)

Average Completion Price

£525,600
(June)

Best growth

Haringey & Tower Hamlets
(both around 3%)

Least growth

Barnet and Merton
(-4% & -3%)
The familiar steady growth of house prices has almost come to a grinding halt in London, remaining even lower than the rest of the UK (which has also been decelerating).

Due to the greater cost of borrowing, buyer demand has fallen sharply while supply has increased, resulting in a net decrease in demand both in London and across England and Wales as a whole.

Source: Office for National Statistics (ONS)


While there is still a housing shortage (SpareRoom report 0.7 London rooms available to rent per searcher), based on RICS data, there are fewer buyers in the London market, relative to supply, than at any time in the last 5 years.

Since the end of the Help to Buy Scheme, there have been fewer local purchases. However, sales to overseas buyers have increased in the last six months according to Molior. This shows confidence in the market, long term, from overseas investors.

Are you buying or selling in the London housing market?

With falling demand, this is a buyer's market. We can help with all aspects of the conveyancing process.


What our survey revealed about homebuyers
Our survey, conducted by YouGov, reveals the top challenges faced homeowners when buying their most recent property, plus the true costs of defects when skipping a home buyers survey.


What are homebuyers looking for?

Sales volume lowest ever in London


London Property sales fall by 50%. A Cartoon of a man trying to hold up the property market with ropes

London has the lowest volume of sales for the month of April since records began. April is often one of the strongest months for completions because it is linked to the Easter holidays offering a longer weekend to get unpacked and moved in. Back in April 2004 sales reached an all-time high of 14,873, with an average sale price of £225,863. 19 years on, sale volumes have slumped to 3,194, with an average sale price of £527,979 - only £16,000 off the all-time record high for any month.

Source: House Price Index (HPI)


New build homes in London

The prices of construction materials remain steady with the smallest annual increase since December 2022, indicating they are unlikely to rise again in the near future. However, they also show no sign of returning to pre-pandemic levels any time soon. With the high cost of materials, falling demand and labour shortages, construction firms are struggling.

It's no wonder then, that the number of EPCs recorded weekly in London for newly completed homes has fallen sharply in the last two years. This aligns with a PMI press release from July reporting a significant decline in residential construction.

With fewer new homes being built, hopeful buyers and renters alike may be pushed out of the capital. Mayor Sadiq Khan is tackling this with his ongoing project Homes for Londoners.

Andrew Boast FMAAT MIC
CEO and Author | SAM Conveyancing

Summary
As predicted in July's report, August and September will get worse before they get better, as homeowners who don't have to move will sit tight and weather the storm of high-interest rates and poor housing stock.

The housing market needs fresh housing stock, but the volume of new builds is falling in 2023. So with no new builds, we must wait for sellers to be confident they can upsize/downsize in 2024 for this market to start moving again.

For now, buyers will have to wait until the Bank of England base rate stops its monthly increases, giving mortgage lenders greater confidence to offer more mortgage products, to make buying more affordable.

The silver lining for buyers is that you may be able to find a seller willing to reduce their house price by a larger amount than normal, because of circumstances, meaning the seller can't afford not to sell. If you're entering into negotiations, then here is a very useful guide on - How to negotiate when buying a house.

Sources:Latest data from - Bank of England, UK House Price Index, ONS and Property Mark (NAEA).

Caragh Bailey, Digital Marketing Manager
Written by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

Andrew Boast of Sam Conveyancing
Reviewed by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
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With more than two decades’ experience in the conveyancing sector and over 50,000 successful client moves under his belt, Andrew shares insider tips and advice to empower you as a buyer, giving you the tools to make the best decisions for your circumstances and ease the chaos.


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