Price Cuts in Prime London Properties may reflect Election Jitters

Price reductions across the prime London sales market offer opportunities for investors seeking out high-value properties in one of the world’ most elite housing markets.

Data consultancy LonRes says sales values in May were some 2.8% lower than a year earlier, with transactions plummeting 14.8% to leave this the weakest May since 2017.

However, the number of properties going under offer increased, up 4.1% compared to the same month in 2023. New instructions increased 12.1% on an annual basis, taking the level to 10.8% above the 2017-2019 (pre-pandemic) May average.

LonRes says there’s significant variation between areas of prime central London in terms of price reductions. For example more than 60% of sold properties in South Kensington were reduced before a deal was sealed, compared to 37% in Mayfair & St James’s.

Nick Gregori, Head of Research at LonRes, says: “May saw more of the same for the prime London sales market, with values broadly static and activity relatively subdued, as has been the case for much of the year.

“Demand for homes is still out there but is tending to be price sensitive. Motivated vendors understand this and we are seeing asking prices being reduced in greater numbers than usual.

“The upcoming election dominates the news at the moment but historically the housing market has tended to shrug off any impact from previous votes.

“Some buyers and sellers, including potential ones, remain cautious but this is as much about the economy as politics, waiting for better growth figures and interest rate cuts.”