Prime London’s housing market cooled noticeably in September as growing stock levels, slower sales and political uncertainty over possible property tax changes unsettled buyers and vendors alike, according to the latest data from LonRes.
Across the prime postcodes, new instructions rose 20.3% year-on-year, pushing total stock 18.7% higher than a year ago. Yet demand failed to keep pace, with transactions down 12.3% on September 2024 and 13.4% below pre-pandemic levels.
Prices are under increasing pressure. Average achieved values fell 4.6% year-on-year, marking the sharpest decline in 18 months, while discounts at sale widened to an average 10.8% – the highest since 2019. More than half of all homes sold last month had at least one asking-price cut before securing a buyer.
At the top end of the market, sales of properties above £5 million dropped 40.5%, while new listings in that bracket fell 26.2%. Despite fewer launches, available stock above £5 million has grown 19.2% year-on-year, reflecting slower absorption and growing caution among high-net-worth purchasers.
PROPERTY TAX CHANGES
LonRes says activity in the super-prime bracket began to soften in August amid speculation about potential changes to property taxation in next month’s Autumn Budget.
Cumulative sales above £5 million are now more than 15% lower than last year, having tracked closely until mid-summer.
Market conditions elsewhere are also testing. Q3 sales volumes were down 20% year-on-year, fall-throughs have risen by around 15%, and the number of price reductions reached a record high.
RENTS STILL STRONG
In lettings, momentum has eased but rents remain historically strong. Prime London rents rose 2.5% year-on-year—the slowest annual rate for nearly a year—yet are still 38.3% higher than pre-pandemic.
Lettings activity improved modestly, with agreed lets up 6.1% and new instructions up 19.6%, helped by a 27.4% rise in available stock compared with September 2024.
Nick Gregori (main picture, inset), head of research at LonRes, says: “September usually marks the start of the autumn selling season, but there are signs that activity will be quieter than usual this year.
“There’s plenty of stock and sellers appear motivated, yet demand remains stubbornly low.”
He adds that uncertainty around tax reform has weighed particularly on the £5 million-plus bracket, while rents, though steadying, “remain close to 40% above pre-pandemic levels.”
