Sales of £5 million-plus properties defy prime London slump

Sales of properties in London’s prime neighbourhoods slumped last month as the UK government's budget put a pause on transactions, figures show.

There were 17.5 per cent fewer sales transactions in October than a year earlier, and 6.6 per cent fewer than the October average for the pre-pandemic years of 2017-19, according to figures by property data firm LonRes.

The number of sales was the lowest in any October since 2018, LonRes said. Prime London analysis includes properties predominantly in central London.

Those that did sell were likely to have done so below the asking price. Price reductions increased by 8.5 per cent from an already high base, with around half of properties on the market reduced at least once.

However, transactions involving properties worth more than £5 million defied the overall pattern, increasing by 13.6 per cent. New instructions for £5 million-plus properties increased 1.5 per cent, while the number of available homes in that price bracket was 2.3 per cent lower than a year earlier.

LonRes said the monthly £5 million-plus data was often volatile, and the market had been strongly affected by speculation around tax and policy changes in the past 18 months.

Chancellor John Healey’s budget was considered to be relatively pain-free for the property market. However there had been concerns in the build-up that there would be changes to capital gains tax, a further toughening of the incoming mansion tax or the introduction of a wealth tax.

Show caption: Britain's Prime Minister Andy Burnham congratulates Chancell…

October is often the peak month for offers to be made, as deals are agreed for homes newly listed or relaunched after the summer, but not this year. There were 21.3 per cent fewer under offer in October, the first month this year with fewer under offer than the pre-pandemic average.

Average sale prices across London fell by 6.6 per cent compared with a year earlier, down 9.4 per cent compared with 2017-19.

After peaking in September 2025, the number of homes on the market fell in the first half of 2026, rose again in the past few months before falling 1.3 per cent in October.

Average rental prices rose by 5 per cent.

Nick Gregori, head of research at LonRes said: “With the budget coming towards the end of the month, October was relatively subdued for the prime property markets as they waited to see if any surprises would emerge.

“In the end, reaction to the Chancellor’s announcements – on property and more widely – could perhaps best be summed up as: 'Was that it?'

“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.”

He said the political change in the US, driven by the cost of living, that saw the Democrats take control of both chambers of Congress could have a greater impact than domestic changes, despite the Bank of England raising interest rates for the first time in three years, citing their expectations for inflation rising to around 5 per cent next summer because of continued higher energy costs.

“While this is negative for market sentiment, it is not expected to materially impact mortgage costs as it had previously been priced in by lenders,” Mr Gregori said.