London house prices: market cools as stamp duty holiday ends and buyer numbers dip

Finding a buyer in London now takes just over eight weeks on average.
Shutterstock / ZGPhotography
Ruth Bloomfield15 August 2021

The end of the stamp duty holiday has coincided with a cooling of London’s housing market, with asking prices dropping 1.5 per cent in the last month, according to the latest Rightmove house price index.

The price contraction brings average prices in the capital to £635,585, cancelling out gains seen over the past year as buyers scrambled to benefit from a tax cut of up to £15,000. Over the past year London’s average asking price has risen by a below-inflationary one per cent.

Prices also fell month-on-month in seven out of the UK’s 11 regions, including the south east (down 0.5 per cent), and the east (down 0.2 per cent). Wales was the top performer, with prices up 2.3 per cent in the last month and just under 11 per cent in the last year.

The average home now takes an average of just over eight weeks to find a buyer in London – around the same level as this time last year.

The latest RICS UK Residential Survey also reported a “slightly cooling market” as the stamp duty break tapers off, with the number of new buyers, new sales, and new listings all dipping.

In Wimbledon, John King of Andrew Scott Robertson estate agents, said the start of the school holidays had also had an impact on buyer activity and predicted “a very slow August”.

“The present market is price sensitive, a small reduction in the asking price brings out many more enquires,” he said.

William Delaney, managing director of Lawrence Ward & Co, based in the city, blamed politicians for “fragile” buyer confidence. “Confusing government messaging, the fear of further lockdowns, and the fear of the impact on the economy because of measures imposed by the Government means buyer confidence remains fragile,” he said.

Across London a mixture of outlying boroughs and prime central boroughs have seen the strongest annual change in asking price.

Barking and Dagenham and Kingston upon Thames lead the way, with growth of just over seven per cent year on year. But Kensington and Chelsea and Westminster have also performed strongly with growth of 6.6 per cent and 5.8 per cent respectively.

Dominic Agace, chief executive of Winkworth, said the resurgence of central locations reflects an increasing wish to resume normal life. “People are desperate to return and get on with their lives,” he said. “The pandemic has supercharged the desire for green space, with areas like Notting Hill top of the list.”

Harrow, Bromley, Redbridge, Bexley, Sutton, and Enfield make up the top ten outperforming boroughs in today’s report.

At the other end of the spectrum, the affluent north London enclaves of Camden and Islington have seen the biggest annual price falls – around five per cent.

Tower Hamlets, which has been badly impacted by the trend to WFH and the ensuing lack of demand for apartments close to the City and in Canary Wharf, has recorded an annual drop in asking prices of 2.3 per cent in the past year.

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