Price reductions continue to blight prime London market

More than 60% of sold properties in South Kensington are being reduced prior to a deal being agreed, compared to 37% in Mayfair & St James’s says LonRes.

View of street with restored elegant Victorian Edwardian luxury houses in the exclusive area of South Kensington, London, UK

Price reductions continued to blight the London prime sales market last month as house price growth in the capital remained negative with sales values in May 2.8% lower than a year earlier, latest data from LonRes reveals.

Transactions were also 14.8% lower than a year earlier with the fewest sales in the month of May since 2017.


However, the number of properties going under offer increased, up 4.1% compared to the same month last year. And new instructions also rose by 12.1% on an annual basis, which is 10.8% higher than the 2017-2019 (pre-pandemic) May average.

Table showing monthly prime London data from LonRes

The latest data also shows significant variation between areas in terms of current levels of price reductions, with more than 60% of sold properties in South Kensington (main picture) being reduced prior to a deal being agreed, compared to 37% in Mayfair & St James’s.

In lettings rental growth was just 1.1% – the lowest rate since August 2021, but values are still 28.3% above their 2017-2019 (pre-pandemic) average.

LonRes data for May also indicated an annual increase of 4.7% in lets agreed and a 4.3% increase in new instructions but activity on both measures continues to run well below pre-pandemic levels.

Nick Gregori, LonRes
Nick Gregori, Head of Research, LonRes

Nick Gregori, Head of Research at LonRes, says: “May saw more of the same for the prime London sales market, with values broadly static and activity relatively subdued, as has been the case for much of the year.

“Demand for homes is still out there but is tending to be price sensitive. Motivated vendors understand this and we are seeing asking prices being reduced in greater numbers than usual.

“The upcoming election dominates the news at the moment but historically the housing market has tended to shrug off any impact from previous votes.

“Some buyers and sellers, including potential ones, remain cautious but this is as much about the economy as politics, waiting for better growth figures and interest rate cuts.”

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