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London housing market slowest in country as house prices stagnate

·3-min read
 (Daniel Lynch)
(Daniel Lynch)

It is taking longer to sell a home in London than anywhere else in the UK, as the capital’s housing market stays “sluggish”.

The average amount of time it took from marketing a home to accepting an offer rose from 55 days in August to 58 in September, and up from a 12-month low of 48 days this time last year.

This was more than three weeks longer than the average for the rest of the country. The quickest time to secure a buyer was in Scotland, where it took 24 days, and the South West, where it took 33 days.

But according to the latest house prices index from Rightmove, which analyses asking prices, this is a reflection of a healthier supply-and-demand balance in London than anywhere else.

With other parts of the country still in the throes of a post-lockdown supply crisis, the number of homes coming on the market versus the level of demand is more evenly weighted in the capital.

This explains the slight asking price increase of 0.8 per cent in London over the 12 months to September, taking the average price tag to £638,285.

The greatest annual asking price rise was in Barking and Dagenham at 5.7 per cent to £346,594 followed by Bromley (4.8 per cent to £585,876).

This would appear to indicate that the outer areas are in higher demand than inner London, but Westminster comes third with an increase of 4.1 per cent to £1,366,817. The most expensive borough, Kensington and Chelsea sits in the middle of the borough ranking of asking price inflation.

British house prices break records

Nationally, Rightmove reported a 5.8 per cent hike in asking prices over the last 12 months to £338,462 – an all-time high for England, Scotland and Wales.

The biggest jump this month was in Wales where asking prices rocketed 9.5 per cent in 12 months and it takes 35 days to sell. Price tags in the East Midlands have also shot up (9.1 per cent).

“Despite the traditional summer holiday lull, fierce competition continues among buyers for the record low number of available properties for sale,” said Tim Bannister of Rightmove. “Buyer demand per property for sale is more than double that of pre-pandemic levels.”

This imbalance is also being driven by the rise of the “power buyer” who has already sold their home and has cash in the bank. They are over-powering those in a chain who are competing for the same properties. First-time buyers with a mortgage agreed are also in a strong position.

But there are early signs that the supply-demand imbalance maybe settling across the UK. The number of new listings in the first two weeks of September, on average across the country, was 14 per cent higher than the last two weeks of August.

“As we enter the busy autumn period, there are early signs of more properties coming to market, which may help to slowly rebuild buyer choice,” says Bannister.

The national asking price increase is stabilising too. Although the hike over the last year to September is high, the monthly adjustment is up only 0.4 per cent – although this figure is pulled down by a muted London market.

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