Prime London house prices fell by 7.9% year-on-year in July as the sales market recorded a sharper-than-usual summer slowdown, according to LonRes.
Transactions were 11.5% lower than a year earlier and 7.3% below the pre-pandemic July average, while new sales instructions increased by 3.3% annually.
By contrast, average prime London rents rose by 5.3%, their strongest annual increase for 18 months, taking them 41% above their 2017-2019 average.
LonRes says the acceleration coincides with the Renters’ Rights Act taking effect in May, although other factors are likely to be contributing.
DOUBLE-DIGIT DISCOUNTS
More than half of the properties sold in July had undergone at least one asking-price reduction, with the average discount across prime London standing at 10.4%.
Homes selling within three months during 2026 achieved an average discount of 3.9%. Those marketed for more than a year accepted 19.3% less than asking price.
Although properties going under offer fell by 14.8% annually, the total remained 35% above its pre-pandemic average. LonRes says too few of those deals are progressing to exchange.
SUPER-PRIME ACTIVITY SLUMPS
Transactions involving homes valued at £5m or more fell by 20% year-on-year, while new instructions declined by 30.3%.
The number going under offer dropped by 50%, suggesting heightened caution among buyers and sellers at the top of the market.
Available £5m-plus stock was 5.2% lower than last July but remained 61.8% above its July 2021 level.
RENTERS’ RIGHTS IMPACT
Lets agreed increased by 1.5% annually, while new instructions rose by 3.6% and available rental stock grew by 6.8%.
Prime central London recorded the largest turnaround in rents, moving from a 3.7% annual fall in February to 5.7% growth in July.
However, more than 20% of its lettings have annual rents above £100,000 and are therefore outside the Renters’ Rights Act framework.
LOW ACTIVITY
Nick Gregori (main picture, inset), Head of Research at LonRes, says: “July typically signals the start of a summer slowdown for the prime London sales market, but July 2026 saw low activity even for the time of year. Adding a new Prime Minister and continuing global uncertainty to the mix has resulted in a subdued prime London market, with the super prime segment particularly affected.
“In the prime London lettings market, there is a growing weight of evidence that the Renters’ Rights Act has put upward pressure on rents.
“However, the strong performance of the PCL market, where a significant minority of properties are excluded from the Act due to annual rents of over £100,000 per year, raises questions about what other factors are in play.”
