London’s property market has finally “turned a corner” a year after Kwasi Kwarteng’s mini-budget, with property listings back at levels seen before the ex-chancellor’s ill-fated Commons statement and prices starting to tick up again.
Latest data from London lettings and sales agents Foxtons shows how buyer and seller activity slumped alarmingly in the wake of last September’s disastrous “growth plan” which sent mortgage rates soaring after unprecedented spikes in gilt yields.
However, last month the number of homes listed for sale in the capital rose to 101,457, slightly above the level recorded in September 2022. Listings slumped to 89,279 in March 2023 as confidence drained from the market.
Sales volumes have also started to pick up after almost halving between September 2022 and last February to a low of 4,531 before starting to climb in March, the latest month for which figures are available.
The higher level of confidence has been reflected in prices with the average bouncing 2.6% to £534,265 between March and July.
Foxtons CEO Guy Gittins said: “There’s no doubt that the government’s mini budget caused an almost immediate decline in property market health and this impact reverberated across the entire country. This was no different across the London market The good news is that we certainly seem to have turned a corner and across the capital, stock levels have returned to pre-mini budget norms.
“At Foxtons, we’ve seen a 26% year on year increase in new sales instructions.”
Mortgage rates have been gradually subsiding over recent months as inflation has been brought down from its double digit highs of last autumn.
Today the average two-year fixed residential mortgage rate stands at 6.34% unchanged from yesterday, while the average five-year fixed residential mortgage rate today is 5.89% down from 5.9% yesterday, according to Moneyfacts.
The Bank of England is expected to hold rates again at 5.25% next week, the City markets pricing in a 90% chance of a pause.
