Rightmove’s House Price Index has some encouraging news for London’s property market, with news of an uptick in activity at the high-end of the property scale and the conclusion of the summer holidays providing an increase in the number of homes coming to market. The countrywide asking price reductions current affecting two out of every five properties on the market could offer impetus for buyers looking to purchase homes below the £750,000 mark, too.
After two years of price falls, the city’s market has welcomed an increase in the number of sales agreed for homes with an asking price of £750,000 or more. It marks a 6% increase against the same month in 2017 and suggests that the high-end of the market is coping with recently implemented Government-led restrictions, such as its attempt to limit the number of foreign buyers.
This increase in sales accounts for almost a fifth of all completed transactions within the city and is in stark contrast to the current success of homes priced under £750,000, which is currently 3.6% down on the same month last year.
“Buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation,” observes Rightmove director Miles Shipside. “However, in London, after asking prices rose by over 50% between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts of the capital. Now, there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves.”
Average house prices within each Transport for London zone have also seen a rise from their August numbers, too, as per the below:
The increase in the amount of properties on the market has almost certainly contributed to an increase in the average time to sell, which has shifted for the first time since April up to 72 days. Buyers have more options and are shopping around for the best property with the typical seasonal surge attributed to the end of the school holidays.
This rise in the average time to sell could also be down to the countrywide trend of the reduction of house prices, with sellers needing to price more realistically to find a buyer. According to a report in the Independent, almost two out of every five properties are seeing price reductions of an average of £26,000 or more, with 39.5% of London homes trimming their asking price in the hopes of completing a sale.
This is certainly encouraging news for first-time buyers looking to make a start on the property ladder. The rise in property prices has often outstripped the rise in inflation and wages over the last several years, causing a headache for those wishing to purchase their first property.
In that sense, there’s encouragement at both ends of the market, with the high-end market strengthening thanks to an increase in sales and a drop in asking prices helping to make purchasing a home more affordable for many.