The prime London property market endured a muted May, with sales volumes and lettings activity both slowing as economic uncertainty, stamp duty distortions and shifting buyer sentiment weighed on the capital’s high-end housing sector.
According to independent analysts LonRes, sales transactions across prime London fell by 35.8% year-on-year and by 33.5% compared to the pre-pandemic May average (2017–2019).
Average achieved prices also slipped 3.4% annually and now sit 1.4% below pre-Covid benchmarks.
DOESN’T LOOK GREAT
Nick Gregori, head of research at LonRes, said: “The May data doesn’t look great for the prime London sales market.
“It was the second quiet month after the March stamp duty holiday-induced flurry. Looking at March through May gives a more realistic picture – demand is slightly behind last year and supply a little ahead.”
Under offer numbers, a key forward-looking indicator, were down 22.3% annually in May, pointing to further slowdown ahead.
While new sales instructions were 3.2% lower than last year, they remained 6.2% above their pre-pandemic average.
Price reductions were up 20.1% year-on-year as sellers adjusted expectations, and stock levels ended the month 11.7% higher than May 2024.
FEWER TRANSACTIONS
The £5m+ segment saw 14.7% fewer transactions year-on-year, though deal volumes remained slightly ahead of the 2017–2019 average. However, supply surged – new instructions from January to May rose 18.3% compared to 2024, and stock levels hit a record high after rising 22.4% over the past year.
Gregori added: “There are many motivated vendors with high levels of stock on the market. But the properties available may not match buyer requirements – either in type or in price. Confidence that values have bottomed out remains weak.”
SUBDUED LETTINGS
Lettings activity also remained subdued, with lets agreed down 21.7% annually and new instructions falling 5.2%.
Still, May marked the strongest month for new rental listings so far this year. Average rents rose by 3.3% annually, and now sit nearly 33% above pre-pandemic levels.
However Gregori reckons that there are green shoots for the lettings market: “Annual rental growth slowed slightly in May, but demand remains robust at lower price points.
“Time to let has decreased below pre-pandemic norms for more affordable homes, though higher-end properties are taking longer to rent.”
