The prime London sales market was subdued in May, with transactions particularly low for the time of year. 

Values decreased slightly on an annual basis and all activity measures bar price reductions were lower than May 2024.

There were 35.8% fewer transactions in May than the same month a year ago, and 33.5% fewer than the 2017-2019 (pre-pandemic average) May average.

The number of properties going under offer was 22.3% lower than a year ago and 2.4% lower than the 2017-2019 (pre-pandemic average) May average.  Under offers are a leading indicator for transaction levels, suggesting lower activity in the coming months.

Supply growth also slowed from recent levels.  

New instructions in May were 3.2% lower than the same month last year but 6.2% higher compared to the 2017-2019 May average. The number of price reductions remained high, with a 20.1% rise in May compared to last year.  

Stock on the market at the end of May was 11.7% higher than a year earlier and 48.2% above the level five years earlier (May 2020) – although the 2020 baseline is volatile due to lockdown’s impact on the market. 

We noted last month the distorting effects of the stamp duty holiday that ended on 31 March, looking at activity either side of the end date.  May’s figures suggest that the impact is still being felt by the market, so analysis of the past three months provides a clearer picture.  

Transactions from March to May 2025 were down 6.0% compared to March to May 2024 and 2.4% below the 2017-2019 (pre-pandemic) average for the same three months.

Three-monthly under offer numbers have fallen by 10.6% on an annual basis but were 8.9% above their 2017-2019 average level.

New instructions were 7.0% higher from March to May compared to last year and 21.7% higher relative to their 2017-2019 average.

Price reductions have seen the biggest increases, rising by 39.9% in March through May compared to the same three months last year.

Overall, these combined figures give a more realistic view of the market than the volatile monthly ones.  

Demand is a little lower than last year.  Supply is a little bit higher, but growing at a slower pace.  And prices continue to come under pressure.  

Average values across prime London fell by 3.4% on an annual basis and are now 1.4% below their pre-pandemic (2017 to 2019) average level. The average discount from initial asking price across prime London was 9.1% in May.

Across prime London, average values are approximately in line with where they were back in 2014 to 2015.  While this period is generally considered the ‘previous peak’ for the wider market, there are significant variations from that trend in some sub-markets.  

Houses in the ‘prime fringe’ catchment are the only sub-market where average values are currently higher than 2014 to 2015, by 4.8%.

They peaked at +8.8% in Q2 last year.  

Flats in the PCL catchment are the only sub-market where average values have never been above their previous peak from Q2 2014.

Current values here are more in line with 2012 or 2013 levels.