Coutts London Prime Property Index Q3 2024: Prices drop and buyers get bigger discounts

Sales rise as mortgage market improves

Katherine O’Shea, Coutts Real Estate Director, said sales were up too.

“Sales volumes for the third quarter of this year have risen 7.2% compared to the previous three months – April to June. And interestingly, sales volumes are also up 14% on the 10-year average,” she said.

“This demonstrates the resilience of the prime London property market. It’s mainly activity in the £2 million to £5 million price bracket that’s driving this growth.”

Katherine added that the mortgage market was “slowly improving” for house buyers which was likely to help boost sales further.

She said: “The direction of travel is clear – interest rates are coming down. The big questions are – how quickly will they drop and by how much?”

The Bank of England cut interest rates by 0.25% in August, to 5%. This was the first UK cut since 2020. The market currently expects rates to come closer to 3.5% this time next year, but as always, that could change.

Those who rely on public listings could

miss out

New prime properties put up for sale fell 14% compared to the previous quarter, but Katherine said that was pretty normal for the time of year.

“The volume of new properties coming onto the market over the summer tends to drop anyway,” she said. “Also, it’s worth noting that, on average, across prime London the volume of properties available on the open market is up 8% annually, which is more good news for buyers.”

But she added it can be extremely challenging trying to find “best-in-class” property if merely relying on public listings.

“Clients and agents are telling us that the very best of properties are sold privately or pre-marketed to buying agents, which means a lot of unrepresented buyers could miss out on opportunities,” she said.

Local Insights

Good deals in central London

Prime property in some central London postcodes is selling at very low prices compared to historic levels. Price growth has been pretty limited over the past decade. As Katherine explains: “The market peaked in 2014 and has struggled to reach those levels ever since.”

For example:

• prices in Knightsbridge & Belgravia are still 23.1% below the height of the market, following price falls of 5.6% in the last quarter
• prices in Mayfair & St James’s are still 23.7% below the height of the market, following price falls of 4.9% in the last quarter
• prices in South Kensington are still 15.7% below the height of the market, despite 1.2% growth in the last quarter

Price corrections in outer London after ‘Covid bounce’

Areas a little further afield have seen meaningful price drops in recent months.

For example:

• prices in Hampstead & Highgate peaked in Q2 2023 and have since fallen 17% – in the last year prices are down 9.6%
• prices in Wimbledon, Richmond, Putney & Barnes peaked in Q4 2023 and have since fallen 12.5% – in the last quarter alone we’ve seen prices drop 7.3%

But this comes after these areas saw significant price rises during the Covid pandemic as demand for more space and bigger gardens soared.

Pockets of strong activity

Transaction volumes are up across the capital, but we’re seeing particularly strong activity in some areas.

For example:

• in Bayswater & Maida Vale sales volumes are up 58.7% since the last quarter, 52.1% annually and 33.2% compared to the 10-year average
• in St John’s Wood, Regent’s Park & Primrose Hill sales volumes are up 50% quarter-on-quarter, 50% annually and 31.4% compared to the 10-year average
• in Kensington, Notting Hill & Holland Park sales volumes are up 8.5% compared to last quarter, 21.4% annually and 14.9% compared to the 10-year average