The prime London property market experienced a resurgence in sales activity in July, even as prices continued their downward trajectory.

Sales activity in July marked the most positive month of the year, according to LonRes data, with transactions up by 8.7% compared to July 2023. This figure is 23.7% higher than the average for July during the pre-pandemic years of 2017-2019. 

The number of properties going under offer also saw a significant rise, increasing by 23.6% compared to the same month last year. This growth partly reflects a rebound from June’s slower market, which had been affected by pre-election uncertainty.

Values across prime London fell by 4.9% on an annual basis, though they remained slightly above pre-pandemic levels, with a 0.6% increase compared to the 2017-2019 average.

New sales instructions remained steady, showing no change from last year, but were 2.3% higher than the pre-pandemic average for July. The stock of available homes for sale continues to grow, with an 11.1% increase in the number of properties on the market at the end of July compared to a year earlier.

However, the £5m-plus segment of the market underperformed relative to the broader market. Transactions in this high-end category were down by 18.9% year-on-year, although still 34.3% above the 2017-2019 average for July. The number of £5m-plus properties available for sale increased by 27.4% compared to last year, signalling a potential oversupply at this price point.

Lettings

In the lettings market, rental growth edged up to 1.4% in July, but this remains below the levels seen in recent years. Despite this modest increase, average rents across prime London are now 29.6% higher than their pre-pandemic average. 

However, the number of lets agreed in July decreased by 3.9% year-on-year, while new instructions rose by 9.7%, both figures remaining well below pre-pandemic levels. 

The stock of available rental properties is gradually recovering, with an 11.4% increase in the number of homes on the market compared to a year ago.

Commenting on the findings, Nick Gregori, head of research at LonRes said: “July is typically a quiet month for the prime London sales market due to summer holidays, but this July has been a little different.  

“Transaction levels bounced back from a slow June, with delayed deals and pent-up demand from the pre-election period pushing sales well above both July 2023 and the average for the time of year.  

“The key question looking ahead is how sustainable this improvement is – are the conditions in place for a sustained recovery?”

Gregori added: “For the prime London lettings market, July saw a continuation of 2024’s trends, with activity similar to last year and new supply slowly increasing off a low base. 

“The volume of homes available to rent is gradually recovering but, despite some growth in recent months, it is the more affordable price points where supply is most constrained.”