The prime London property market appears to be finding a new level as sales, demand and prices slide, LonRes claims.
Figures from the property data company for the first three months of the year show prime London sales are 21.9% down on the same period of 2022, while new instructions are rising, albeit slowly.
Year to date, LonRes said there has been an 11% fall in homes going under offer, which it said could signal a further slowing of sales activity in the months to come.
With new instructions and average discounts both rising, the data firm warned this could result in further downward pressure on prices as we head through the year.
However, in March new instructions were up 2.4% annually and the number of properties under offer fell 2%, while average prices were down 4.9%.
This reverses some of the gains made through 2022 and takes values back 2.0% below their 2017-19 level.
The analysis also suggested the top-end boom may be coming to an end.
Properties priced at more than £5m have been outperforming the wider market for many months, but in March sales volumes were 50% down annually and 13.3% below the March pre-pandemic average.
Meanwhile increasing numbers of top-end sellers are putting their homes up for sale. New instructions were up 115% on their March pre-pandemic average and the number of £5m+ homes for sale at the end of March grew by 8% compared to the end of 2022.
These two metrics alone could indicate slowing demand, LonRes said, but the number of properties going under offer in this market suggests otherwise.
Under offers grew year-on-year in March, up 25% and are 150% up on the March pre-pandemic average.
Assuming these sales all go through, LonRes said that could result in a bounce-back in activity during the second quarter of this year.
Anthony Payne, managing director of LonRes, said: “The prime London housing market slowed over March. Prices, transactions and properties going under offer were all down over the month, while new instructions rose. It seems as though the market, which is now back to pre-pandemic times, is finding a new level.
“Despite a rise in new properties coming to the market, stock levels are still low and anecdotally we’re hearing that buyer demand remains strong. Agents tell us that good properties are being snapped up and for turn-key properties, where little work is needed, buyers are prepared to pay a premium.
“In contrast the rental market continues to suffer from a lack of stock and with tenants staying put, inactivity is impacting all levels of the market, especially the less expensive prime London rentals.”