Prime London's property sales market recorded its weakest August performance in nearly two decades, with transactions reaching their lowest level since 2008, according to data from LonRes. Average achieved sold prices in August fell 7% year-on-year and were 6.7% below pre-pandemic levels.
Sales transactions saw a 19% decline compared to August last year, and were 25.6% lower than the pre-pandemic August average from 2017-2019. New sales instructions also dropped 22.1% annually.
The £5 million-plus segment of the market showed similar trends, with transactions down 18.8% year-on-year in August. Nick Gregori, Head of Research for LonRes, noted that 2026 saw the lowest number of new instructions across prime London in an August since 2011, and the lowest level of transactions since 2008.
Gregori attributed the low activity to a general lack of market momentum, persistent inflation, and rising short-term mortgage costs following a spike in UK government bonds in early September. These factors continue to limit the prospect of lower interest rates and dampen buyer demand.
In contrast, the prime lettings market showed continued rental growth despite lower activity. Average rental values across prime London rose 3.8% annually in August, standing 41.4% above their pre-pandemic average. Gregori suggested that the rental market is being used by reluctant buyers to 'try before you buy' and by potential sellers to generate income while awaiting more favourable sales conditions.