The prime London sales market has shown little momentum at the start of 2026, suggesting it has yet to recover from the disruption caused by last year’s Budget. Transaction volumes remain well below typical levels for January, even as the number of properties coming to market rises.
New instructions across prime London in January were 2.0% higher than the same month in 2025 and 29.1% above the 2017‑2019 January average, marking the highest level of new listings for the month since 2016.
Despite this, transactions fell by 30.2% year-on-year and 20.2% compared with the pre-pandemic January average from 2017‑2019. Overall stock at the end of the month was 8.3% higher than a year ago, though down around 11% from the peak recorded in September 2025.
Table 1 – Monthly Prime Data – January
|
Prime Sales
|
Prime Lettings
|
|||
|
Annual
Change
|
Change vs. 2017-19 (pre-pandemic)
|
Annual
Change
|
Change vs. 2017-19 (pre-pandemic)
|
|
|
Achieved prices/rents
|
-5.6%
|
-5.6%
|
-0.7%
|
31.0%
|
|
Properties sold/let
|
-30.2%
|
-20.2%
|
3.9%
|
-56.5%
|
|
New instructions
|
2.0%
|
29.1%
|
31.5%
|
-52.2%
|
Source: LonRes (Note: all price and rent figures based on £ per sq ft values)
Other metrics also indicate that sellers may be more motivated than buyers in the current market. The number of properties going under offer in January was 8.8% lower than a year ago and there was a 12.8% increase in the number of price reductions over the same period.
Sales Activity Measures in January 2026, All Prime London
Source: LonRes
Values across prime London continue to adjust in light of this supply-demand balance. Average achieved prices fell by 5.6% on an annual basis in January and were also 5.6% below their pre-pandemic (2017-2019) average level. This was a slightly slower pace of fall than towards the end of 2025 but suggests that values have not yet bottomed out.
The average discount from initial asking price decreased to 10.3% in January, from a revised 11.1% in December. Discounts remain high relative to historical levels; they haven’t previously been consistently in double-digits since 2019.
Of all the properties sold in January, 54.6% did so after seeing at least one asking price reduction. Again this is a small decrease from December but is otherwise the highest proportion since the end of 2018, again highlighting that buyers in the current market remain sensitive to prices.
Discounts and Price Reductions, All Prime London Sales
Source: LonRes
New £5m-plus sales instructions across prime London in January were 12.5% higher than the same month last year (chart 3) and 109.5% higher than the 2017-2019 January average. The number of new sales listings was the highest for the month of January we’ve seen since our records began in 2000.
£5m-plus transactions in January fell by 7.1% compared to a year ago (chart 3) and by 11.4% compared to the 2017-2019 (pre-pandemic) January average.
The number of £5m-plus properties for sale at the end of January was up 9.9% compared to a year earlier, though like the wider, market available stock has decreased from the peak reached last year (June for £5-plus properties).
The top end of the market was the segment most impacted by the speculation in the run up to the Budget that started last summer.
ooking at six months of data alongside the latest figures (chart 3) shows how much damage has been done to the market, sales volumes are down more than 30% compared to the same period a year earlier, while new instructions also fell and withdrawals and price reductions both rose.
Annual Change in £5m+ Sales Activity Measures, All Prime London
Source: LonRes
The prime London lettings market saw activity increase across all metrics in January, but rental growth remained negative with supply rising faster than demand.
LonRes data for January indicated an annual increase of 3.9% in lets agreed and a 31.5% increase in new instructions. The stock of available rental properties also increased, with 44.0% more homes on the market across prime London at the end of January than a year earlier (chart 4). Despite these increases, all metrics remain significantly below pre-pandemic levels.
Measures of Rental Market Activity, January 2026
Source: LonRes
Average rents fell by 0.7% in January on an annual basis (table 1), unchanged from the (revised) December figure. Rents across prime London are now 31.0% above their 2017-2019 (pre-pandemic) average (table 1). The average discount from asking rent was 3.4% in January, a little higher than the 2.8% averaged through 2025 but lower than the equivalent figure last January, suggesting a relatively strong level of current demand.
Nick Gregori, head of research, LonRes, said: “January typically sees high levels of new instructions and 2026 was no exception, recording the highest figure for the month since 2016 across all price points and the highest ever for the £5m+ market. In part this includes an element of catch up, with some sellers putting their plans on hold in the latter part of 2025 due to uncertainty around the Budget but now deciding to sell.
“The number of homes available for sale decreased through the final quarter of the year – more due to withdrawals than any sustained increase in transaction volumes – but ticked up again as sales activity started the new year slowly. One further factor potentially complicating matters is the ongoing fallout from a significant cyber-attack at Kensington and Chelsea council in November, limiting their ability to process searches or planning applications. Both of these are likely to slow down transactions in the borough, which covers many prime London neighbourhoods.
“Values have been decreasing and the prospects for price growth in the short term are likely to be restricted given the volume of homes on the market and relatively limited pool of demand. One possible boost to prices – lower borrowing costs driven by lender competition and falling interest rates – appears to have stalled. UK swap rates, which banks use to set the prices for fixed rate products, have increased in the early part of year in response to political uncertainty at home and around the world. However, the financial markets still expect two base rate cuts this year from the Bank of England.
“January saw trends in the prime London lettings market continue from the end of last year. Annual rental growth remained in negative territory as the number of properties available to let rose again. Activity increased slightly and discount levels remain low, suggesting demand remains robust.”