Shad Thames market focus, Autumn 2023
Activity in the London sales market has eased this year compared to a very busy 2022, as rising interest rates and a more uncertain economic outlook affect the whole UK housing market.
Even during the busy periods last year, the upward pressure on prime London prices was muted as the higher capital values of homes left less headroom for price growth.
Since then, rising inflation and rising base rates are also affecting the market, as potential buyers dependent on mortgages have had to review which homes are within budget as affordability stress tests become more onerous. However, in the prime London markets, not all buyers are dependent on mortgages.
Agents report that cash buyers are active in the market – including those from overseas who benefit from the relative weakness of the pound against the dollar.
The sales market is price-sensitive. Well-priced homes are still attracting attention and, in some cases, competitive bidding. But demand remains relatively muted, which has been enough to take the upward pressure out of the market, with price growth slowing in most areas and falling in central London.
Meanwhile, the lettings market remains strong. Tenant demand continues to rise, especially for properties at sub-£1500 a week, albeit rental growth this year is unlikely to be as high as the last 12 months.
What our agents say
Despite Southwark seeing average price uplifts, we’re experiencing price falls in Shad Thames. This is primarily due to factors such as global economic uncertainty, rising interest rates and pressures within the job market, especially in the professional and financial services, which impact the housing market and these particular geographies.
In the face of challenging market conditions over the last year, we have remained active in the area and we have a growing local and international database of buyers and tenants looking for property in your area. With more property likely to come to the London sales market in the first half of 2024, we envisage that it will put downward pressure on pricing.
If you’re thinking of selling or letting your home, we’d love to help. Book a free, no obligation valuation with our sales & lettings experts today.
Tower Bridge
36 Horselydown Lane, London, SE1 2LN
Office opening hours
Monday to Friday: 8:30am – 6:00pm
Saturday: 10:00am – 4:00pm
+£180k
the average price uplift in Southwark 2013 –2023
+1.1%
average price rise in Southwark, year to July
+12.4%
annual rise in number of properties available for sale SE1 vs June 2022
+10.3%
rise in achieved rents SE1, SE2 Jun-Aug 2023 y-o-y
>
Tenant demands table, Q3 2023
Sources: Land Registry, Gov.UK, Lonres, Cluttons, Rightmove, Zoopla
Mortgage rates
The Bank of England has raised the base rate multiple times this year, but the messaging from rate-setters at the central bank is that we could be nearing the peak. This has allowed the money market rates, which determine the price of fixed-rate mortgage lending to fall back a little. This, coupled with increasing competition for business among mortgage lenders, means mortgage rates have been trimmed over the last month or two. Two-year fixed mortgages are available from around 5.62% although this falls to under 5% for those with a higher deposit or higher levels of equity. Even so, the affordability calculations for buyers has changed materially compared to 18 months ago, with stress testing limiting the level of borrowing for many potential buyers, reducing budgets for purchase in many cases.
In the event that you already have a contract with another estate agent for the marketing of your property, you are advised to consult the terms of the agreement with that estate agent as you could be liable for double commission. The information provided in this flyer is the sole property of Cluttons LLP and provides basic information and not legal advice. It must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Cluttons LLP. The information contained in this flyer has been obtained from sources generally regarded to be reliable, and we believe the data to be correct at the time of writing. However, no representation is made, or warranty given, in respect of the accuracy of this information. Cluttons LLP does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
