the average asking price for a house in London is £ 682,000, a very small decrease compared to last month as the housing market frenzy over the past two years begins to ease.
Affordability restrictions, more homes being put up for sale and a traditional summer break are behind the 1.1 percent price drop in the capital, according to Rightmove.
The fifth rise in base rates in a row by the Bank of England last week, as well as threatening storm clouds over the economy and the prospect of Britain tipping into recession this year, also weakened buyers’ confidence.
However, the real estate portal found that buyer demand is more than double the pre-pandemic five-year average for May and London’s offer prices are still 4.9 per cent higher than this time last year.
“The market’s unusual pace is slowing slightly as demand gradually normalizes and price increases begin to slow down, which is very to be expected given the many record numbers over the past two years,” said Rightmove’s Tim Bannister.
“When we look at the number of buyers contacting real estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.
“We hear from agents that even though they may have had slightly fewer inquiries for each property in recent months, they are still experiencing significant interest from more buyers and achieving successful sales.”
These findings were repeated by a separate report from On The Market, which showed that 84 per cent of London home sellers were confident they would sell in the next three months and 77 per cent of buyers expected to buy a property within the same time frame .
“There was a remarkable level of buyer and seller confidence in the housing market in May, despite significant headwinds, including rising inflation and yet another rate hike by the Bank of England,” said Jason Tebb, CEO of On the Market.
“Against this background, there are signs of an increase in the number of new instructions, indicating the start of an inevitable rebalancing of supply and demand in the market.”
Sir. Tebb continued that serious buyers were determined to buy soon, while mortgage rates were still relatively low.
Where in London do house prices rise the most?
The nine districts with the largest price increases were in outer London, where Havering topped the table. House prices in the eastern part of London rose 11.7 per cent to £ 1.46 million.
Southeast London’s Bromley came next (up 11.3 per cent to £ 737,000) followed by Barking and Dagenham (up 9.5 per cent to £ 483,000); The child (up 9.5 per cent to £ 619,000); and Merton (up 9.4 per cent to £ 370,000).
In a trend that has become more and more common as affordability remains stretched, the boroughs with the lowest price growth were all in inner London.
Southwark saw the lowest annual change of 0.8 per cent to reach £ 645,000 and bid prices in the borough fell 0.3 per cent a month.
Kensington and Chelsea saw prices fall 1.6 per cent a month to £ 667,700, while Camden saw a monthly drop of 0.4 per cent to £ 1,004,000.