Houses in the Home Counties valued at over £1 million have seen an average of £151,130 knocked off their asking prices since last summer.
Sellers are having to drop their prices by 10 per cent on average to attract buyers, according to a new prime property report from Investec looking at data from the second half of last year.
Homes in or close to London are back in demand as employers backpedal on work from home arrangements introduced in response to the pandemic and commuting times once again factor heavily into people’s decisions on where to live.
“The gradual return to office-based working has brought the commute time firmly back into focus, so we’ve seen greater client demand for the established commuter towns on the outskirts of London,” said Carlos Mendes, a private banker at Investec.
Some 70,000 households moved out of the capital last year, as high mortgage rates pushed buyers out of London. But this trend could be about to slow.
According to Hamptons, 11.9 per cent of London buyers are from outside of the capital — the highest level since 2009. Zoopla said buyer demand in the capital is up 21 per cent year-on-year.
The Greater London area outperformed the home counties, with home owners selling £1 million plus properties reducing their asking prices by 8.6 per cent on average, taking £159,540 off the price tag.
People with second homes in coastal areas outside London could also be selling up as interest rates rises make paying an additional mortgage too costly to bear.“In the current interest rate environment, it is perhaps unsurprising to see the larger price reductions occurring further afield, in locations such as West Sussex, where second homes are more prevalent,” said Carlos.
In West Sussex, where the average price of a £1 million plus property is £1.49 million, sellers knocked £187,805 off their asking prices on average — a reduction of 12.6 per cent. It also took sellers an average of 100 days to find a buyer.
One boomerang Londoner who tried moving from Fulham to Petfield in West Sussex told Homes & Property she only lasted six months due to the isolation and increasing need to commute.
“As well as friends, the things that I have missed have been the culture and the opportunities you have in London, and I also miss people, the buzz of having people around me all the time,” said Harriet Minter, who will be moving back to London next month.Essex saw the second largest drop in asking prices for homes over £1 million, with sellers knocking an average of £159,671 off their asking prices, a discount of 11.2 per cent.
Sellers of prime property in Kent reduced their asking prices by 10.6 per cent on average, equating to a discount of £149,220.
Some counties performed on a level with London, notably the ones in popular commuter zones such as Berkshire and Hertfordshire.
Berkshire prime properties saw reductions of 8.5 per cent in the same time, equivalent to a discount of £125,938. However, at 111 days on the market, it was also the county where homes took the longest to find a buyer.
In Hertfordshire £1 million plus properties offered an average 8.8 per cent reduction on asking prices, saving buyers £132,660.
“The Home Counties are often referred to as a collective, but our research shows that there is a significant variation in the availability and price of prime property in these areas,” said Mendes.House prices across the South East, which are traditionally the highest in the UK, dropped in 2023 as 14 consecutive interest rate rises made by the Bank of England in an attempt to quell inflation saw people’s mortgage repayments spike.