Just a year on from the mini budget responsible for the declining health of the property market, the capital has turned a corner, with an uplift in activity helping to restimulate the market.
This is according to the latest research from lettings and sales estate agent, Foxtons which analysed the health of the London market since the mini budget in September 2022, the impact it had and how the market has bounced back in recent months.
The latest full monthly transaction data shows that sales have once again started to rise, climbing to 5,060 from the market low witnessed in February – an 11% month on month increase.
Harrow has seen the sharpest return to form, with transaction levels up 43.4%, followed by Kensington and Chelsea (42.9%) and Redbridge (42.9%).
Sellers are also returning to the fold, with the number of homes listed for sale hitting 101,457 in September of this year, marking a full return to pre-mini budget market conditions, with every borough seeing an increase in stock for sale versus the previous low seen in March of this year.
The research shows that the average London house price had been climbing steadily in the run up to the mini budget, increasing by 1% between July and September 2022. However, in the months that followed, it fell by 4.2% to a low of £520,961 in March of this year.
The biggest declines were seen across the boroughs of Kensington and Chelsea (11.2%), Brent (8.7%) and Islington (6.9%), while just four boroughs avoided a mini budget induced market downturn – Tower Hamlets, Hounslow, Greenwich and Havering.
Further analysis by Foxtons shows that this drop in London house prices was driven by a two pronged reduction in both available stock and buyer appetite.
In September of last year, there were just shy of 100,000 homes listed for sale across the London market. This fell to a low of 86,291 homes listed for sale by January 2023 and by March, total stock levels still sat some way off pre-mini budget levels at just 89,279.
But it wasn’t just a reduction in seller activity that impacted the market, internal data from Foxtons shows that there was a decline in buyer interest, with buyer applications falling by 46% between September and October 2022.
However, Foxtons suggests that the London market has now turned the corner.
Buyer applicant levels have increased by 27% between September of this year and October, with October 2023 also seeing 69% more applicants versus October 2022, with this number expected to increase further by the end of the month.*
Foxtons CEO Guy Gittins comments: “There’s no doubt that the government’s mini budget caused an almost immediate decline in property market health and this impact reverberated across the entire country.
“This was no different across the London market, where months of otherwise steady momentum in stock levels and buyer activity were slowed by the uncertainty and market nervousness the mini budget brought”.
He adds: “The good news is that we certainly seem to have turned a corner and across the capital, stock levels have returned to pre-mini budget norms”.
