Wealthy London sales market hit by August summer slump

August was a subdued month for the prime London sales market, with supply and transactions significantly lower than usual for the time of year, LonRes claims.

Figures from the prime London data platform show average achieved sold prices fell by 7% on an annual basis in August, while values were 6.7% lower than pre-pandemic levels.

There were 19% fewer sales transactions in August than a year earlier and 25.6% fewer than the 2017-2019 pre-pandemic August average, LonRes said.

New sales instructions in August were also 22.1% lower than last year and 17.9% lower than pre-pandemic.

The stock of available homes for sale at the end of August was 1.1% lower than a year earlier and 4.9% lower than the peak reached in September last year.

Meanwhile, Transactions in the £5 million-plus market were 18.8% lower in August than the same month last year.  New top-end instructions  decreased by 10.4% over the same period.  The number of £5million homes available for sale across prime London at the end of August was 6.4% lower than a year earlier.

With the market in general lacking momentum so far this year, the low level of activity this summer is no great surprise.”

It was similar news in the lettings market, with lower activity but robust rental growth.

LonRes data for August shows an annual decrease of 27.5% in lets agreed and a 3.5% fall in new instructions. The stock of available rental properties increased on an annual basis, 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% in August on an annual basis, while average rents were 41.4% above their pre-pandemic average.

Slow summer

Nick Gregori (pictured), Head of Research for LonRes says: “There are quiet Augusts and then there are quiet Augusts.  With the market in general lacking momentum so far this year, the low level of activity this summer is no great surprise, but 2026 saw the lowest number of new instructions across prime London in an August since 2011, and the lowest level of transactions since 2008.

“Although this lack of activity extended to price reductions, which saw an annual fall for the first time this year, values remained under pressure.

Persistent inflation, in part driven by the conflict in Iran, continues to limit the prospect of lower interest rates.”

“While the new Labour leadership have done a better job of avoiding damaging speculation around property taxes – and chosen an earlier Budget date, which limits the time for it – than last year, there is less they can do about external issues.  Persistent inflation, in part driven by the conflict in Iran, continues to limit the prospect of lower interest rates.  In the short-term mortgage costs have risen after UK government bonds saw a sharp spike in early September, further dampening buyer demand.”

The ‘wait-and-see’ approach that has been a feature of the prime sales market for a while has had a direct impact on the prime lettings market, Gregori says.

He adds: “For reluctant buyers, the rental market allows a chance to ‘try before you buy’.  For those deciding whether or not to sell, the rental market offers a chance to get some income in while waiting for more favourable sales market conditions.  The 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.”