The London housing market is in a precarious position.
With interest rates lower than this time last year, and the uncertainty of the 2024 general election behind us, you might expect a recovery in home sales. But new data reveals that, as winter turned to spring, the capital’s housing market slowed instead.
Exclusive research shows that the number of postcodes deemed to be hot seller’s markets has been falling month-on-month this year compared with last. Propcast analysis tracks the number of homes under offer as a proportion of the number for sale in every postcode.
Above a market heat of 34 (where 34 out of every 100 homes for sale are under offer or completing) is classified as a seller’s market, characterised by multiple bids on one property and speedy sales.
This January, 85 out of 121 postcodes were hotter than in January 2024. In February this slid to 71 postcodes out of 121. This fell again to 65 in March and then 35 in April, against a backdrop of economic turbulence triggered by US President Donald Trump’s tariffs and the continued housing unaffordability in London.
Affordable enclaves
However, there are pockets bucking the downwards trend, where demand to live has soared over the past 12 months. The top five postcodes are dominated by residential areas in zones three and four, which offer family-sized homes in family-orientated locations that are comparatively affordable and very commutable.
Based on a combination of the biggest increase in market heat ranking and the highest score, Abbey Wood (SE2) topped the Propcast list of the five hottest postcodes, moving up 16 per cent to a market heat score of 56.
Not only does Abbey Wood have new homes on sale in Thamesmead, a regenerated sink estate, but there are traditional family-sized homes for sale close to the Elizabeth Line. Hunters is selling a five-bedroom semi-detached house for £675,000, a five-minute walk to the transport hub.
Clapton (E5) also scores highly. Its market heat has improved by 17 per cent over the past 12 months to 52. Rhys Drewell, of JLL, puts this down to the continued spread of buyers out from Hackney and Dalston. “We see people looking here for relatively better value and bigger homes,” he says.
Eva Bouzaki, of Stow Brothers, agrees. “Clapton is attracting a wide range of buyers, from families to singles and young couples with modern flats, ex local authority properties and period houses,” she says. “It’s more expensive than Walthamstow but less expensive than Victoria Park and has much to offer.”
Size is everything
Only last week, Rightmove reported that the post-Covid trend of searching for larger homes with more space had not reversed. “Big houses as a property type have seen higher price growth than flats in the capital,” says Nick Maud, analyst at Savills. This explains the influx of wealthy families into places such as Highgate. In zone three, it has larger plot sizes and space than its more central London neighbours.
The number of homes under offer versus homes on the market in N6, which covers Highgate and Hampstead, has risen15 per cent in 12 months to a market heat of 46. James Diaper, also of Savills, emphasises the enduring pull of Hampstead. “It is a special part of London, with village charm,” he adds. “It has a strong family market and has become the province of wealthy City professionals.”
Plaistow, West Ham and Upton Park(E13) and Edmonton (N18), running to the west of the Lee Valley, complete the top five with new homes on sale in schemes such as as Berkeley’s TwelveTrees and Meridian Water respectively.
The new balancing act
Against a backdrop of economic uncertainty and fears of a recession and job cuts, those who are buying are balancing new priorities of remaining close to the office while trying to find space and keep their mortgage repayments manageable. For Maud, that means outer London districts characterised by large family houses will continue to outperform inner areas. “We have seen house prices in locations such as Hampstead remain resilient over the last year, while north and east London saw marked annual growth,” he says.
This is backed up by the bottom of the Propcast heat ranking. The coolest five areas demonstrating falling demand and sales were South Kensington and parts of Knightsbridge (SW7), West Brompton and Chelsea (SW10) and Bloomsbury (WC1).
