More homes are selling – but at what cost?

Prime London’s housing market showed signs of stabilising in June, with modest annual increases in both new instructions and sales activity, although pricing remains under pressure as sellers continue to adjust expectations.

The latest LonRes data shows average prime London property values were 8.2% lower than a year earlier in June and sat 5.5% below their pre-pandemic (2017-2019) average. While the annual decline appears to have accelerated, monthly price movements have remained relatively stable throughout 2026, reflecting stronger comparisons with last year rather than a sharp deterioration in current market conditions.

Pricing pressure continues to be evident across the market. The average discount from initial asking price reached 10.4% in June, while more than half (50.5%) of completed sales had previously undergone a price reduction.

Sales activity improved slightly during the month. Transactions were 4.8% higher than in June 2025, although they remained 2.1% below the pre-pandemic June average. The number of properties going under offer also rose by 4.8% year-on-year and was 14% above the 2017-2019 average.

Supply also increased, albeit at a slower pace. New instructions were up 2.2% compared with June last year and remained 13.3% above pre-pandemic levels. Stock available for sale at the end of the month was 3.1% higher year-on-year and almost 20% above June 2021 levels.

However, sellers continue to reprice properties in response to market conditions. The number of price reductions rose by 21.2% compared with June 2025, extending a run in which every month of 2026 has recorded the highest number of reductions ever seen for that month.

The first half of the year paints a more subdued picture. Sales across prime London were down 12.7% compared with the first six months of 2025 and 3.8% below the pre-pandemic average. At the same time, properties going under offer increased by 8.3% year-on-year, while new instructions rose 2%. Withdrawals climbed 29.4%, suggesting some vendors are opting to leave the market rather than accept lower offers.

The super-prime (£5m+) market followed a similar pattern. New instructions fell 17.3% year-on-year in June, while transactions increased 7.1%. Available stock declined by 3.3% compared with a year earlier as some discretionary sellers chose to withdraw properties instead of reducing asking prices.

Across the first half of 2026, super-prime sales were down 14.7% compared with the same period last year, although they remained 15.4% above pre-pandemic levels. New £5m-plus instructions were 10.8% lower year-on-year, while price reductions continued to rise, highlighting ongoing pricing pressures even at the top end of the market.

The lettings market was more stable. Agreed lets slipped 1.1% year-on-year in June, while new rental instructions increased 11.4%. Available rental stock rose 19.1%, and average rents increased by 2.4%, marking a second consecutive month of annual rental growth following six months of declines.

LonRes noted that the introduction of the Renters’ Rights Act coincided with the recent improvement in rental values, although it said it is too early to determine whether the legislation has had a direct impact on market performance.