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

October 2025 saw a drop in sales of prime London properties, with sales falling by 17.5% compared to the previous year. LonRes, a property data firm, noted that this was the lowest October figure since 2018. However, properties valued at over £5 million bucked the trend, with sales increasing by 13.6%. The number of transactions involving these high-value properties rose by 1.5%, while the number of homes available in this price range decreased by 2.3% year-on-year.

The market had been impacted by speculation surrounding potential changes to tax policies, including capital gains tax, mansion tax, and a wealth tax. Chancellor John Healey's budget was seen as relatively favorable for the property market, but there were concerns about potential changes that might arise. In October, there were 21.3% fewer properties under offer compared to the pre-pandemic average, making it the first month in 2026 with fewer under offer than usual.

Average sale prices in London fell by 6.6% compared to the previous year, and rental prices rose by 5%. LonRes head of research, Nick Gregori, suggested that the subdued market activity in October was due to waiting for any potential surprises from the Chancellor's announcements. He also noted that global political changes, particularly the shift in control of the US Congress by Democrats, could have a more significant impact on the market than domestic policy changes.

Despite the Bank of England's recent interest rate hike, Gregori believed this would not have a significant effect on mortgage costs, as lenders had already factored in the expected rise in inflation.