London's luxury real estate sector is showing promising signs of recovery, marking the end of a prolonged period of decline.

According to a recent report from Savills, the first quarter of 2024 witnessed the first quarterly increase in prices since September 2022.

After enduring six consecutive quarters of price declines, luxury property prices in central London stabilized in the first three months of the year, experiencing a marginal 0.1% increase. Within the £3 million to £5 million range, prices saw a slightly larger uptick of 0.3%.

Meanwhile, outer London's luxury market demonstrated stronger quarterly growth, with prices rising by 0.8%. This growth can be attributed to increased stability in mortgage costs, which has enticed more buyers back into the market.

Lucian Cook, head of residential research at Savills, views these developments as early indicators of market recovery. He attributes the improved outlook to the rapid recovery of the mortgage market and the easing of recessionary risks. The return of stability to mortgage debt costs has particularly benefited domestic prime markets, especially in leafy outer prime South and West London, as well as the commuter belt.

Beyond London, the wider UK property market saw no quarterly growth as it entered the spring season, traditionally associated with heightened buyer activity across many regions. Suburban areas experienced a marginal decline of 0.1% in prices, while urban centers such as Edinburgh, Glasgow, Bath, and Oxford witnessed price increases of 0.6%.

Cook notes that regional buyers may remain cautious amid market uncertainty, especially in anticipation of the upcoming general election. Consequently, buyers are expected to adopt a more reserved approach until there is greater clarity in the political landscape. Photo by Lobster1, Wikimedia commons.