A fresh analysis of data by independent property analysts, LonRes, reveals that the Prime London housing market is exhibiting signs of reverting to pre-pandemic levels of activity. While the number of properties sold in February this year fell by 33% compared to last year, the drop was only 9.1% compared to the 2017-19 average.

However, the number of properties that are currently under offer, a leading indicator for sales, was surprisingly 10.5% higher than the pre-pandemic average. The number of new instructions is also on the rise, with figures soaring to 14% higher than February last year and 23.6% higher than before the pandemic.

It's noteworthy that Prime London house prices witnessed a significant decrease of 2.8% over the past year and currently stands just 1.7% above their pre-pandemic levels. At the same time, the rental market is still struggling with an acute shortage of stock. New lets have dropped by a significant 59.4% compared to the pre-pandemic levels, and rents are currently up by 8.4% over the past year.

The analysis further suggests that the longer it takes to sell a property, the greater the discount to the asking price, with the average discount for homes sold in under three months being -3.5%, compared to -14.5% for properties taking more than a year to sell.

According to Anthony Payne, the managing director of LonRes, "We’re continuing to see a rise in new instructions coming to the market. In February, they were 14% up on the same month last year and 23.6% higher than before the pandemic.

“This means there is more choice for buyers. And while there appears to be no let up in buyers looking to purchase, there also seems to be no urgency in them committing to a sale. For serious sellers out there, asking prices need to reflect the mood-change in the market.

“Meanwhile the prime London lettings market continues to suffer from lack of stock but no lack of tenants. Tax changes aimed at buy-to-let investors have undoubtedly impacted the sector. Build to rent schemes while part of the rental solution, take time to come on stream and until stock levels rise or demand level falls, it’s difficult to see how the situation across prime London is going to change.”