London houses still selling for £19,500 below asking price but market is springing back

Source: The Standard 28 MARCH 2024

London’s housing market is continuing to bounce back after its slump, with house prices down just 0.4 per cent year on year for February 2024.

The average sold house price in London is now £534,000, according to the latest Zoopla House Price Index.

Sellers are now accepting £19,500 below asking price on average, a 4.3 per cent reduction, compared to £25,000 (6.1 per cent reduction) in November 2023.

There are eight per cent more homes on the market in London.

Croydon saw the biggest positive change in house prices annually, rising 2.4 per cent per cent with an average house price of £392,100.

Ealing and Bromley both saw the biggest drop in house prices, down 0.8 per cent to £514,000 and £513,000 respectively.

London house prices

Zoopla's March 2024 House Price Index

Still a buyer’s market

Zoopla said that lower mortgage rates in anticipation of the Bank of England eventually lowering the base rate from 5.25 per cent underpinned this spring bounceback.

“House prices are falling at a slower rate but it remains a buyers market where there is much greater choice of homes for sale,” said Richard Donnell, executive director at Zoopla.

“We don't believe that house prices are about to increase more quickly but there is more buyer interest,” Donnell added.

“Sellers need to remain realistic on where they set the asking price if they are to take advantage of improving market conditions to secure a sale and move home in 2024.”

Compromise on price

Marc von Grundherr, director of Benham and Reeves, agreed that making sure an asking price was realistic in the first place remains key, especially if the seller is keen to move home quickly. “Price remains the key compromise for sellers when it comes to securing a buyer in today's market, with higher mortgage rates continuing to restrict buyer purchasing power,” said Grundherr.

“However, the gap between this purchasing power price point and seller asking price expectation has narrowed and we’re finding that sellers are more than happy to oblige in order to make their move."

In some parts of London it can take as long as 241 days on average to sell a home.

Zoopla forecast that house prices won’t start rising again that quickly, as more homes continue to come onto the market and provide buyers with options.

However, London is lagging behind the rest of the country in terms of supply, with 20 per cent more homes for sale in the UK compared to this time last year.

Market getting busier

Nationally, house prices are down 0.3 per cent year on year, with sellers accepting an average discount of £10,000 (3.9 per cent) from their original asking price.

Matt Thompson, head of sales at Chestertons, said the property market continued to improve this month.

“In March, the property market witnessed steady demand from buyers although some house hunters decided to pause their search in the hope for major incentives to be announced in the Spring Budget. As this wasn’t the case, the majority of these buyers have since resumed their property search,” Thompson explained.

“As a result, March concluded the first quarter of the year with a busy property market — particularly in the capital where demand continues to outstrip supply.”