The prime London property market weakened further in September, with rising stock levels, falling values and subdued demand signalling a slower start to the autumn selling season, according to the latest analysis from LonRes.
New instructions increased by 20.3% year-on-year and were 32.3% above pre-pandemic levels.
The total stock of available homes at the end of September was 18.7% higher than a year earlier.
However, sales activity declined, with 12.3% fewer transactions than in September 2024 and 13.4% fewer than before the pandemic.
Average achieved sale prices fell 4.6% annually and were 3.2% below the pre-pandemic average, marking the steepest drop since February 2024.
The average discount from the initial asking price rose to 10.8%, the highest level since early 2019, while 54.3% of properties sold in September had experienced at least one price reduction – the most since 2018.
September also saw the highest number of monthly price reductions on record, up 28.4% year-on-year, reinforcing evidence of motivated sellers and fragile demand.
The £5m-plus segment saw the sharpest slowdown. Transactions fell 40.5% year-on-year, while new instructions declined 26.2%, and available stock rose 19.2%.
LonRes said speculation over possible property tax reform in the upcoming November Budget had dampened both buyer and seller confidence in this market.
Across Q3 2025, sales volumes were down 20% year-on-year and 11% lower than the pre-pandemic average.
Although properties under offer rose 3.4% annually, LonRes said higher fall-through rates – up around 15% so far this year – were preventing stronger completion numbers.
Nick Gregori, head of research at LonRes, said: “September traditionally marks the start of the autumn selling season but there are signs this year that activity may be lower than usual in the run up to Christmas.
“There is a lot of stock on the market and the high number of price reductions suggests that vendors are motivated, but demand remains stubbornly low.
“The £5m-plus market has seen even more of a slowdown this year, although it started from a healthier position.
“The fears around major property tax changes appear to have impacted this market significantly.”
Rental growth across prime London slowed to 2.5% year-on-year in September, down from 4.3% in August, the lowest rate in nearly a year.
However, average rents remain 38.3% above pre-pandemic levels.
Lettings activity increased, with 6.1% more lets agreed and 19.6% more new instructions than a year ago. Stock of available rental properties rose 27.4% annually, the highest in several years.
At the top end of the market, the number of homes available to rent at £5,000+ per week grew 31% compared to September 2019, while lower price brackets continue to face more limited supply.
Gregori added: “In the prime London lettings market, annual rental growth decreased to 2.5% in September.
“While this is the lowest rate for almost a year, average rents remain high, approaching 40% above where they were pre-pandemic.
“Stock on the market continues to rise at the top end, with lower price points remaining more constrained.”
