Luxury homes across London’s commuter belt are selling for around £150,000 below their asking prices, marking a dramatic shift in the property market.
Sale prices for properties worth £1million or more in the home counties fell by nine per cent on average last year, according to a new report from Investec.
The findings signal a significant cooling of the market in London’s surrounding regions, with buyers now able to secure substantial discounts on high-end properties.
Green space is still a priority for homebuyers, but the return to office work has limited how far employees can move from London.
Jamie Freeman of Haringtons UK notes that factors like commuting costs, settling children into new schools, high interest rates, and stamp duty are all contributing to a reduced interest in relocating far from the city.
House prices have dropped in certain parts of the country
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Carlos Mendes, a private banker at Investec, said buyers “were able to secure some great deals last year, with average reductions of over £150,000 compared to their initial listing price”>
Kent has emerged as the hardest-hit area, with luxury properties selling for 9.7 per cent below asking prices – equivalent to a reduction of £156,344. The Garden of England also recorded the slowest market conditions, with homes taking an average of 121 days to sell.
Berkshire followed closely behind, with properties remaining on the market for 106 days before finding buyers.
Hertfordshire homeowners fared slightly better, though still faced significant losses, with properties selling for £133,333 less than their initial listing prices.
The sharp decline marks a stark reversal from the post-pandemic property boom, when values in regions surrounding London soared by up to 20 per cent. This earlier surge was driven by city dwellers seeking more green space and home offices outside the capital.
A Bank of England study found that changes in household preferences were responsible for nearly half of Britain’s house price growth from early 2020 to December 2021.
While green space remains a priority for house hunters, the increasing return to city-based offices has restricted how far employees can move from London. Office occupancy recently hit a post-Covid high of 60 per cent of pre-pandemic levels, up significantly from 24 per cent in 2021.
Freeman said: “The return to office-based working, coupled with the cost of commuting, the challenges of settling children into new schools, higher interest rates and the ongoing burden of stamp duty, has significantly cooled the appetite for such moves.
“While some sellers remain overly ambitious, listing properties at inflated prices, the buying frenzy of 2021 and 2022 – when homes often sold overnight with ease – has subsided.
“The home counties will always appeal to buyers but the days of dizzying price highs are firmly behind us. The market is now settling into a more balanced and realistic phase.”
More than 22,000 houses valued at £1million or more were listed for sale across the home counties last year, according to Investec’s analysis.
Nearly a quarter of these luxury properties were concentrated in Surrey. Surrey emerged as the most expensive region studied, with an average prime property price of £1.55million.
More than 22,000 houses valued at £1m or more were listed for sale across the home counties last year
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This places Surrey £200,000 ahead of East Sussex, which recorded the lowest average prices among the counties analysed.
The findings highlight significant regional variations in the luxury property market across London’s commuter belt.
Nigel Bishop, of buying agency Recoco Property Search, offered insight into seller behaviour, noting: “We have seen some sellers who, after failing to sell last year, are now more driven to close a deal and therefore more willing to lower their asking price.
“This financial incentive could encourage house hunters to widen their search radius and even accept a longer commute.”
