£
SQ FT
FOR SALE
Autumn Statement 2023 | London's sales market 4
A good time to buy
For others looking to step onto the
housing ladder, potentially leaving rented
accommodation, now is a good time to
buy in London. Rising rents and softening
house prices mean that, for some, moving
into homeownership is an appealing and
cost-effective alternative to renting. In
the first half of 2023, the average price of
a one-bedroom flat in London was
£352,254 (Land Registry). Meanwhile, the
average rent paid by those moving into
one-bedroom flats was £1,767 per month
(Dataloft). With an average London
deposit of 24%, the equivalent mortgage
LONDON'S SALES MARKET
At Foxtons we still have more buyers looking for homes than are available to buy,
a trend that is likely to persist as London continues to grow. Projected to exceed 10
million by 2040, the capital's population is set to increase by more than 64,000 per
annum over the next decade. Meanwhile, the London Plan policy objective of 66,000
net additional new homes to be constructed annually is currently falling a long way
short, which needs Government action to address the shortfall. According to the ONS,
in the last five years, an average of just over 20,000 new homes have been built each year.
Buying is currently cheaper than renting.
Mortgage rates would need to be almost
6.5% before this reversed.
Growth over 10 years
LONDON RESIDENTIAL PROPERTY
OUTPERFORMS OTHER ASSETS
MORTGAGE RATE
RENTS £1,767
SALES £1,524
There are around 4,500
mortgage products currently
available, almost twice as many
as in the period following the
mini-budget. With lenders
tackling the volatility of
funding costs while balancing
market share objectives,
mortgage rates are being
regularly updated. Mortgage
brokers can help buyers to
navigate these changes.
TOM DAVIES
Managing Director
Alexander Hall
cost would be £1,524 per month. On this
basis, and without taking into account
stamp duty or running costs of owning a
home, mortgage rates would need to be
almost 6.5% before renting became
cheaper than buying.
Solid investment case
Speculation about landlords selling en masse
and leaving the market has proven to be
untrue. While we have seen some evidence
of rental properties being listed to sell (18%
of exchanges in H1 2023 were for properties
that had previously been rented through
Foxtons, compared to 20% in H1 2022),
SUPPLY
-0.2%
DEMAND
-3
EXCHANGE
104 DAYS
60.4% 43.1% 31.6% 16.3%
PRICES
+18.1%
Flats
(achieved prices)
Change in new
instructions
Buyer registrations
per property
25% better than
market average
6.5%
BUYING VERSUS RENTING
Foxtons, H1 2023 vs H1 2022
Foxtons, Land Registry, Dataloft, based on costs of buying and renting a 1-bedroom flat in London
ONS, LBMA, Yahoo Finance
GOLD PRICE
AGAINST US$
FTSE 100
LONDON
RESIDENTIAL
CPI
these are usually 'accidental landlords'
who own one property. Some of these
properties remain in the rental market,
having been bought by other landlords
starting or growing a portfolio. The
investment case for landlords in London
remains strong with gross yields rising to
6% (for flats) and long-term capital
growth continuing to outperform other
asset classes.