Sales volumes remain weak, but increased listings and under offers suggest a shift in market momentum
The prime London housing market remained subdued in June, wrapping up a quiet second quarter marked by limited transaction volumes and stable annual prices, according to new data from LonRes.
Average prices across prime London slipped 0.2% year-on-year in June, but still sit 1.7% above their pre-pandemic average (2017–2019). Despite the annual dip, monthly values edged up from May, potentially signalling a bottoming-out in prices.
Nationally, house price growth slowed last month, with Nationwide reporting a monthly decline and the smallest annual gain in over a year. Over the past decade, the premium for prime London homes compared to the UK average has narrowed significantly — from a 9.2 ratio in June 2015 to 7.1 in June 2025.
Indicators suggest prices may be stabilising. The average discount on asking prices across prime London stood at 8.2% in June, and 41.5% of sold properties had previously seen a price cut—both the most favourable figures recorded this year.
Transaction volumes, however, continued to lag. Sales were down 27.1% compared to June 2024 and 18.4% below the pre-pandemic average for the month. In contrast, the number of properties going under offer rose 9.0% year-on-year and 22.7% above the pre-2020 benchmark. The rebound in under offer activity could lead to higher transaction numbers in the coming months.
After stalling in May, new instructions picked up pace in June, increasing by 19% compared to last year and up 20.1% on the 2017–2019 average. Price reductions also continued to climb, jumping 50.6% year-on-year. Total available stock was 13.3% higher than June 2024 and 40.2% above June 2020 levels, though comparisons to the early pandemic period remain volatile.
In the first half of 2025, completed transactions were 6% lower than the same period in 2024, though slightly above (+1%) the pre-pandemic average. Properties under offer rose 1% year-on-year and 18% above the 2017–2019 level. New listings increased by 14.2% annually, with price cuts jumping 42.7% compared to the previous year and 54.1% above pre-pandemic norms.
Although market fundamentals remain steady, LonRes analysts note that sellers are facing growing competition amid limited buyer pools.
Super prime market shows supply surge, softer sales
In the £5 million-plus segment, supply growth remained strong in June while sales activity eased. New instructions surged by 42.9% annually — more than double the 2017–2019 June average. However, sales dipped 7.7% from June 2024 and were 12.2% below pre-pandemic levels. The total number of homes on the market in this category reached a new high, up 24.7% year-on-year.
Over the first six months of 2025, super prime transactions fell 10.5% compared to last year. Still, activity outperformed other price brackets, with sales in this tier running 27.9% ahead of their 2017–2019 average. By comparison, the £1 million to £5 million range saw a drop, while sub-£1 million properties posted a 5.9% gain.
“The prime London sales market completed a poor Q2 in June,” said Nick Gregori, head of research at LonRes. “Transaction volumes were down for the third month in a row, with each passing month, the stamp duty holiday becoming less of an excuse… Under offers picked up strongly and values were stable, perhaps suggesting that a corner is being turned on the demand side.”
Gregori added that while vendor sentiment has remained consistent, demand fluctuates due to global and domestic factors. “As I write, the situation with trade wars (and actual wars) appears more settled than at recent points this year, and interest rates have edged lower,” he said. “This could all change quickly, but if it doesn’t, there should be a boost to buyer confidence.”
Gregori also noted that high-end market activity, though softer on a year-on-year basis, is holding up better than mid-tier properties. Rising demand for homes priced over £10 million was also flagged, though sample sizes remain small.
Rental market benefits from supply boost
The prime lettings sector in London saw improved supply conditions in June. Although lets agreed declined 6.5% annually, new rental listings rose by 22.9%. Average rents increased by 5.6% year-on-year — the second-highest growth rate in over 18 months. Rents are now 35.7% above their 2017–2019 average.
The number of available rental properties rose 9.2% from a year earlier but remains significantly below levels seen five years ago. Growth in rental stock was observed across all price brackets above £750 per week, with only the £5,000+ per week segment exceeding its June 2019 levels.
“The prime London lettings market saw a big improvement in new supply in June,” Gregori said. “In some cases, it’s coming off a low base, but higher availability was recorded across all price points.
“We’ve noted that some of this supply is coming across from the sales market. Annual rental growth was 5.6% in June, slightly higher than May, so more choice for tenants will be welcome and could lower the upward pressure on rents.”
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