London's property market has turned the corner after a downturn sparked by the UK's mini-budget last year, with sales transactions rising in March, according to real estate company Foxtons.
Property transactions rose for the first time in March after falling for five consecutive months since the mini budget in September, the latest data shows.
Total transactions for March stood at 5,060, up 11 per cent compared to the market low recorded in February.
London recorded 8,311 property deals in September. This fell to 7,713 in October, 7,619 in November, 6,509 in December, 4,941 in January and 4,531 in February.
Harrow recorded the highest transaction volumes in March, up 43.4 per cent compared with the previous month, the latest data shows. It was followed by Kensington and Chelsea and Redbridge.
The UK economy was thrown into turmoil by former chancellor Kwasi Kwarteng's mini budget in September last year, which included the country’s biggest tax cuts in 50 years.
The move led to a run on the pound, pushing the currency to its lowest point against the US dollar in history, while the cost of government borrowing soared.
“There’s no doubt that the government’s mini budget caused an almost immediate decline in property market health and this impact reverberated across the entire country,” said Foxtons chief executive Guy Gittins.
“This was no different across the London market, where months of otherwise steady momentum in stock levels and buyer activity were slowed by the uncertainty and market nervousness the mini-budget brought.”
The data also shows that the average London house price had been climbing steadily in the run-up to the mini budget, increasing by 1 per cent between July and September 2022. However, in the months that followed, it fell by 4.2 per cent to a low of £520,961 ($632,505) in March of this year.
The biggest declines were seen across the boroughs of Kensington and Chelsea, down 11.2 per cent, while Brent and Islington recorded 8.7 per cent and 6.9 per cent decline in prices, respectively.
The analysis by Foxtons shows that the drop in prices was also driven by a reduction in available stock and buyer appetite.
In September last year, there were about 100,000 homes listed for sale across the London market. This fell to a low of 86,291 homes by January 2023 and at 89,279 by March.
Buyer interest also declined during the period, hitting property sales.
"The good news is that we certainly seem to have turned a corner and across the capital, stock levels have returned to pre-mini budget norms," Mr Gittins said.
Sellers are also returning to the market, with the number of homes listed for sale hitting 101,457 in September this year, marking a full return to pre-mini budget market conditions, with every borough seeing an increase in stock for sale versus the previous low seen in March of this year.
"The market is largely expected to finish on a positive note by the end of the year and this growing market sentiment should only be strengthened by the Bank of England’s decision to freeze interest rates in September," he said.
Last month, the Bank of England left interest rates unchanged at 5.25 per cent, bringing to an end a cycle of 14 straight increases in the cost of borrowing.
