'Best conditions for years' for house buyers, and why billionaires are turning to renting

Had a busy week? We know the feeling, so we’ve cherry picked five property-related stories that have hit the news in recent days.

‘Best conditions for buyers for some years’

Zoopla this week painted a picture of a ‘strong buyers market’, with buyers knocking an average £18,000 (5.5%) off asking prices. That’s the largest gap for more than five years.

Discounts to asking prices for agreed sales are as high as £25,000 (6.1%) in London and the south east, and £11,000 (4.8%) across the rest of the UK, according to the portal’s house price index.

In further good news for buyers, the number of homes for sale has hit a six-year high, with 34% more homes on the market compared with a year ago.

Zoopla executive director, Richard Donnell, says: ‘These are the best conditions for home buyers for some years with more homes to choose from and with sellers more prepared to negotiate on price to agree a sale.’

Why billionaires are renting rather than buying in London

For many people, buying a new home is one of life’s big goals. But the same can’t be said for the über-wealthy: a new report claims that multi-millionaires and billionaires are increasingly preferring to rent a swanky home in London rather than buy one.

Beauchamp Estates’s Ultra-Prime Barometer Wealth Report says that £340m worth of £15m+ homes were bough in the first half of 2023, averaging out at a couple of sales per month in this bracket. Yet over the same time period, between 10 and 11 super-prime homes have been rented out each month, typically at a cost of over £5,000 per week. Multi-millionaires and billionaires splashed out almost £15m renting pads in some of London’s top addresses.

The high-end rental market in London has ‘boomed’ this year, according to Beauchamp Estates. So what’s stopping the rich from putting down more permanent roots?

The estate agency cites a number of downsides, including stamp duty, ‘excessive state scrutiny’ into finances and sources of wealth, and concerns that a change of government to Labour in 2024 could result in rises to stamp duty, other wealth taxes and further regulation.

The report is a collaboration with Dataloft, analysing data from LONRES, Beauchamp Estates and Wealth X.

UK housing sales have dropped by a fifth since last year

The number of homes sold in the UK in October totalled 82,910 (on a seasonally-adjusted basis). That’s 3% down on September and 21% lower than October 2022, according to HMRC.

Anna Clare Harper, CEO of GreenResi, says the drop is ‘unsurprising’. 'Firstly, we are still coming down from a bubble caused by Covid and stamp duty reductions, which created double-digit house price growth for much of the past three years,’ Harper explains.

'Secondly, the higher base rate is designed to cool demand and therefore pricing in the economy, and it is working to plan.’

Gareth Lewis, managing director of property lender MT Finance, adds that while transactions have dipped, volumes haven’t fallen off a cliff. ‘The numbers are what you would expect given the higher interest rate environment, which creates affordability issues, but borrowers are gradually getting used to this,’ he says.

The buyers driving the London family home housing market

While annual house price growth is down ‘pretty much across the board’ in the prime London housing market, there are two types of homes that appear to be bucking the trend, says Benham and Reeves, who analysed prime London prices by property type across 20 prime neighbourhoods.

The typical price of a three-bedroom flat is up 1.4%, while four-bedroom houses have increased by 3.7%, pointing to strong demand for family homes.

‘Our previous research has shown that following the end of pandemic travel restrictions, the number of foreign buyers entering the London market has climbed,’ explains Marc von Grundherr, director of Benham and Reeves.

‘Many of them are relocating their entire families in the process and this increased demand has no doubt been a contributing factor to the strong price performance of family suitable homes within the prime London market.’

The nation’s second home hotspots revealed

Cornwall has been named England and Wales’s top second home hotspot, with 9,425 second homes in the county, according to GetAgent. With its pretty coastal villages, golden sandy beaches and unspoilt scenery, it’s not hard to see why. The news may do little to calm reported tensions between second home owners and locals though.

GetAgent analysed ONS and UK HPI data to find out that there are 141,245 second homes across England and Wales, 42% of which are flats. Kensington & Chelsea is ranked second, with 5,355 second homes — an expensive but beautiful area in which to have a pied-à-terre — with Westminster (4,390) third, followed by North Yorkshire (4,190) and Gwynedd (3,475) making up the top five.

When it comes to the total market value of the second home housing market, the top three remain the same, albeit in a different order, with Kensington & Chelsea topping the charts.