Prime London’s sales market remained subdued in March with transaction volumes falling sharply despite a rise in new listings and agreed deals.
Figures from LonRes show sales transactions were down 41% year-on-year and 13.3% below pre-pandemic averages, underlining ongoing weakness in deal flow.
The slowdown comes despite an 8.8% increase in new instructions and a 21.2% rise in homes going under offer, suggesting that agreed deals are taking longer to progress through to completion.
Stock levels also continued to build, with available homes for sale up 13.8% year-on-year, while average achieved prices fell 5.5% annually and remain 7.5% below pre-pandemic levels.
DISCOUNT DEALS
Discounting remains a key feature of the market, with sellers typically accepting an average 10.5% reduction from asking price to secure a sale.
In contrast, the lettings market showed signs of recovery, with rental values rising by 0.3% year-on-year in March following three consecutive monthly declines.
Nick Gregori (main picture, inset), Head of Research at LonRes, says: “March is typically a busy time for the market, and feedback from agents confirms that buyers are starting their searches and getting out on viewings.
“Our latest data shows that this is starting to translate into more agreed offers – the year-to-date figure is up by 7.6% compared to 2025 – but sales volumes remain stubbornly low, with various issues combining to limit the flow of deals through the full transaction process.
“As a rule, properties take longer to sell in a weaker market. This means more time for people to change their minds or for potential issues with chains to develop.
“The lack of price growth means that there is little sense of urgency underpinning deals. For motivated sellers, realistic pricing is key to agreeing a deal in a reasonable timeframe – our data shows a clear correlation between time to sell and the discount from initial asking price.”
LOW CONFIDENCE
He adds: “Looking ahead, global uncertainty and a weak domestic economy mean confidence in general is low. This limits activity from anyone who doesn’t ‘need’ to move and limits what those still in the market are willing to pay.
“Buying power has been further eroded by mortgage rates increasing and deals being pulled in response to inflation fears driven by the conflict in Iran. At the time of writing (early April) the situation there is appearing to de-escalate, but this could rapidly change again.”
RENTAL GROWTH
But he says: “Rental growth returned to the prime London lettings market in March, with a small annual rise following three months of falls.
“Our activity data showed some significant rises, but this is likely to be partly due to changing agent practices rather than a true reflection of the market.
“In the strong post-pandemic market, properties were often let before needing to be marketed, leading to apparent steep drops in the number of listings. This effect is starting to reverse, with more properties being listed, though other metrics – like time on the market – suggest demand this year remains relatively strong.”
