The London property market is on a roll, with more transactions and higher prices
The increase in annual housing price and asking price has continued to rise every month over the past year. As London enters a strong spring sellers’ market, this is the longest run of year-on-year increases since the beginning of 2017. This implies that the advertised price of a London house is 6.3% higher this March than it was a year ago, with the average now standing at £664,400. The rise from February 2021 to February 2022 was as high as 7.3%, up from 4.2% from January 2021 to January 2022.
According to Rightmove’s latest Asking Prices Index, the last time the British capital saw a prolonged period of unbroken rise was from September 2009 to February 2017.
The time it takes to sell a house in London has also decreased from 68 days to 57 days in February, down from a peak of 71 days in the same month last year – yet another sign that the London housing market is recovering after the pandemic.
During the Covid-19 crisis, many young employees and families opted to relocate from Britain’s cities to smaller towns and villages, causing sales in the capital, particularly in the inner boroughs, to plummet.
However, activity is ramping up after the vaccination roll-out campaign, and to follow is the reopening of culture and hospitality, the return to the workplace, and the re-emergence of international purchasers.
Although the emergency stamp duty vacation expired in the fall, demand for moving in the UK has remained at a record high as the house moving boom has gripped the whole country, according to the research.
This month, the average price of new property on the market increased by 1.7% to £354,564, breaking above the £350,000 barrier for the first time. With an annual increase of 10.4%, this is the biggest monthly gain for March since 2004.
The average time it takes to sell a house in the United Kingdom declined from 44 days in January to 36 days in February. From offer to obtaining keys, the period in Scotland was as short as 25 days and 30 days in the southwest of England.
“This historic price level is being fuelled by the highest disparity between buyer demand and the number of houses available for sale that we have ever measured at this time of year,” Rightmove analyst Tim Bannister said. “In numerous criteria, this is the strongest spring sellers’ market we have ever seen.”
There are currently more than twice as many buyers as sellers active in the market, representing the largest supply-demand imbalance in the property portal’s two-decade existence.
Indeed, 22% of houses advertised on Rightmove are sold within the first two weeks of hitting the market, which is twice as many as in the pre-pandemic market of 2019.
“Normally, buyer demand slows in February for half term, and then we have a tiny break ahead of the spring,” explains Patrick Rampton of Rampton Baseley in Clapham. “There is pent-up demand in the London market as a result of Brexit and the pandemic, and with interest rates increasing, people want to lock in a mortgage offer now.” He explains, “we may only have half the stuff, but we’re selling everything”.
Bannister emphasises that now is the moment for cautious sellers who have been waiting for the epidemic to pass but want to get ahead of increasing interest rates and inflation.