Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Prime London Sales and Lettings Hit by Quiet August, LonRes Data Shows
August was a subdued month for the prime London sales market, with supply and transactions significantly lower than usual for the time of year, according to data platform LonRes. The lettings market saw similar reduced activity, though rental growth remained strong.
Sales Market Slump
Average achieved sold prices in prime London fell by 7% on an annual basis in August, and were 6.7% lower than pre-pandemic levels. There were 19% fewer sales transactions than a year earlier and 25.6% fewer than the 2017-2019 pre-pandemic August average.
New sales instructions were 22.1% lower than last year and 17.9% below pre-pandemic levels. The stock of available homes for sale at the end of August was 1.1% lower than a year earlier and 4.9% below the peak reached in September last year.
In the £5 million-plus market, transactions were 18.8% lower than the same month last year, with new top-end instructions down 10.4%. The number of £5 million homes available across prime London at the end of August was 6.4% lower than a year earlier.
Lettings: Fewer Deals, Rising Rents
The lettings market saw an annual decrease of 27.5% in lets agreed and a 3.5% fall in new instructions in August. However, the stock of available rental properties increased, with 6.1% more homes on the market at the end of August than a year earlier.
Average rental values across prime London rose by 3.8% on an annual basis, with average rents now 41.4% above their pre-pandemic average.
Lowest August Activity Since 2008
Nick Gregori, Head of Research for LonRes, said 2026 saw the lowest number of new instructions across prime London in an August since 2011, and the lowest level of transactions since 2008. He noted that price reductions saw an annual fall for the first time this year, while values remained under pressure.
Gregori attributed the pressure partly to persistent inflation, which he said was in part driven by the conflict in Iran and continues to limit the prospect of lower interest rates. He also noted that mortgage costs have risen in the short term after UK government bonds saw a sharp spike in early September, further dampening buyer demand.
What It Means for Lettings
Gregori said the 'wait-and-see' approach in the prime sales market has had a direct impact on the prime lettings market. For reluctant buyers, the rental market offers a chance to 'try before you buy', while for those deciding whether or not to sell, it offers a chance to get some income in while waiting for more favourable sales conditions.
He added that this latter trend may be partly offsetting the lack of new lettings stock from other sources, which has been blamed on higher levels of taxation and regulation, a factor of direct relevance to letting agents managing supply in the prime London market.
Source: The Negotiator