Prime London’s property market has taken a sharp hit ahead of the Chancellor’s Autumn Budget, with fears of new property and wealth taxes causing values and sales to tumble, according to a property data firm.

LonRes’ latest figures show average achieved prices in October were 5.8% lower than a year earlier, while property sales transactions plunged almost 40%. The firm noted, however, that unlike this time around, in October 2024, there was a rush to complete purchases before the Budget, making the falls appear far steeper than they are.

Fragile market

Nick Gregori, Head of Research at LonRes (pictured), says: “The prime London sales market remained fragile in October. Under offer levels continue to look robust but stubbornly refuse to translate into actual sales, with the existing lack of confidence in the market exacerbated by fears of significant tax changes in the upcoming Budget.

“This has started to impact prospective sellers too, with new instructions decreasing, though the volume of stock on the market remains high.”

And he warned that speculation over tax reforms has “a larger impact on the top end of the market,” where transaction levels have slumped, with sales in the £5m-plus market down 65% and stock levels up 16%.

He adds, though, that “Despite sentiment being so poor, multiple £10m+ sales have exchanged in the past couple of weeks, suggesting there are buyers out there if they see value.”

Borrowing costs remain high, and together with fears of tax hikes, these factors will put further pressure on the property market.”

But points out that wider fiscal concerns and slower-than-expected base-rate cuts are further eroding confidence. “Borrowing costs remain high, and together with fears of tax hikes, these factors will put further pressure on the property market.”

With values now falling at their fastest rate since February, LonRes says the damage is already done, and Gregori concludes: “Until there’s clarity on tax, Prime London will stay on pause.”