Prime London estate agents faced another difficult month in October, with sales falling 17.5% and achieved prices dropping 6.6% year on year.
The latest figures from property analysts LonRes reveal a market struggling with weak buyer demand, falling transactions and growing pressure on asking prices.
However, the lettings market tells a different story. Prime London rents rose 5% annually, their strongest growth since February 2025, as new rental instructions fell sharply.
Half of properties for sale have had price cuts
October sales transactions fell 17.5% compared with a year earlier. Activity was also 6.6% below the pre-pandemic October average.
It was the weakest October for sales since 2018.
Meanwhile, the number of properties going under offer dropped 21.3% year on year. New sales instructions also declined by 7.2%.
Price reductions increased by 8.5%, despite already elevated levels last year.
Around half of all properties currently on the market have undergone at least one price reduction.
Furthermore, sellers accepted an average discount of 10.3% against their initial asking prices in October.
Achieved prices were 6.6% below October 2025 levels and 9.4% below the 2017–2019 average.
Compared with their 2021/22 peak, prime London prices have fallen 11.9%.
Prime central London has suffered a sharper decline of 15.8%, while inner prime London values have dropped 13.2%.
The figures highlight the challenges facing agents trying to secure sales in a price-sensitive market.
£5m-plus market shows mixed signals
The super-prime market recorded a rise in October transactions, despite the wider slowdown.
Sales of properties priced at £5m or more increased 13.6% year on year.
However, the longer-term picture remains weaker.
Between January and October, £5m-plus transactions fell 6.8% compared with the same period last year. New instructions also declined by 11.2%.
LonRes said uncertainty surrounding tax changes and the Budget had contributed to caution among buyers and sellers.
Prime London rents rise as supply tightens
The lettings market continues to move in the opposite direction.
Average achieved rents increased 5% annually in October. They now stand 44% above their pre-pandemic average.
At the same time, new rental instructions fell 14.9% year on year.
Despite the shortage of fresh stock, agreed lets increased by 3.5%.
Available rental properties also declined, with 2% fewer homes on the market than a year earlier.
For letting agents, the figures point to continued competition for rental accommodation and further upward pressure on rents.
LonRes also examined the impact of the Renters’ Rights Act, which took effect in May.
The research found no clear evidence that the ban on rental bidding had caused landlords to increase asking rents to compensate.
However, rental growth has strengthened since the legislation took effect. LonRes cautioned that it remains too early to establish a direct link.
The lettings activity figures exclude Prime Fringe postcodes because of changes to LonRes data collection.
Budget uncertainty adds to market caution
Nick Gregori, head of research at LonRes, said October’s subdued activity reflected uncertainty ahead of the Budget.
He suggested some buyers and sellers may have delayed decisions while awaiting potential tax changes.
Gregori said: “We will have to wait for data from November and beyond to see if potential buyers and sellers were reassured by the lack of changes, but it is possible that some pent-up activity will be unlocked as deals previously delayed finally go ahead.”
However, he warned that renewed inflation concerns and the Bank of England’s latest interest rate increase could weigh on confidence.
On the rental market, Gregori added: “In the prime London lettings market, rental growth edged higher in October as new supply fell.
“This continues a run of stronger value rises since the introduction of the Renters’ Rights Act.”
He cautioned that the available evidence was not yet sufficient to attribute the stronger rental growth to the legislation.
