Recent LonRes data reveals a notable slowdown in the prime London property market for May 2025, with sales transactions dropping by over a third and rental growth moderating amid rising stock levels and cautious buyer sentiment. Despite a spike in £5 million-plus sales earlier in the year, broader market activity is subdued, reflecting affordability pressures and a persistent shortage of available lettings stock.
London’s prime property market showed muted activity in May 2025, according to recent LonRes data, reflecting a cautious landscape for both sales and lettings. Rental growth in prime London moderated to an annual rate of 3.3%, down from 5.0% in April and continuing a trend of low single-digit increases observed over the past 18 months. While there was a slight uptick in new lettings instructions—the strongest monthly performance of the year—agreed lets fell sharply by 21.7% compared with May 2024, signalling subdued demand. The average time to let properties was 67 days, marginally slower than the previous year but faster than the pre-pandemic average. Notably, properties priced below £2,000 per week let more quickly, illustrating ongoing strong demand at more affordable price points in the prime sector.
Despite rents sitting 32.9% above their 2017-2019 pre-pandemic averages, the lettings market remains constrained by a significant decline in available stock. The supply of rental properties is 4.6% lower than a year ago and has dropped by a stark 62.4% compared to five years prior, underscoring a structural tightness in options for prospective tenants. Nick Gregori, LonRes’s head of research, highlighted that while annual rental growth slowed slightly, the data pointed towards a more balanced market at higher price brackets, even as supply shortages continue to support demand for more reasonably priced homes.
The prime London sales market experienced a notably difficult May, with transactions falling 35.8% year-on-year and 33.5% below the May average from 2017 to 2019. Properties going under offer dropped by 22.3%, suggesting subdued buyer interest in the forthcoming months. New instructions also fell by 3.2% annually, though they remained 6.2% higher than pre-pandemic averages. Stock levels, however, have risen significantly; there are now 11.7% more properties available than a year ago and 48.2% more than in May 2020, a period heavily influenced by lockdown restrictions. Sellers appear increasingly willing to reduce prices to attract buyers, with price reductions rising by 20.1% compared to last year. The recent end of the stamp duty holiday on 31 March appears to continue influencing market dynamics, prompting cautious buyer behaviour amid elevated stock levels.
These subdued figures come in contrast to earlier parts of 2025, when the market showed more buoyancy. For example, the first quarter saw a 12.4% increase in sales volumes compared with the same period in 2024 and a 20.3% rise in new instructions, indicating stronger activity earlier in the year. The lettings market had recorded an 8.3% annual rise in rents in prime Central London during spring, alongside a rising average yield. However, several agents had also forecast potential rental decreases by the end of 2025, reflecting underlying uncertainty. Similarly, February 2025 had seen properties going under offer up 18.7% from the previous year, with annual rental growth at 5.0%, indicating that the quieter May results may point to a cooling phase following earlier momentum.
The £5 million-plus market had bucked broader trends during March, with a dramatic 138% increase in transactions and a surge in new instructions and stock levels, surpassing pre-pandemic averages by significant margins. Yet, this high-end segment’s strong performance has not broadly insulated the overall prime London market, which now appears more constrained by cautious buyer sentiment and persistent supply imbalances. Lettings activity, while showing some positive signs with new instructions nearing last year’s levels, is tempered by fewer agreed lets and longer times to let at the upper-tier price points.
Looking back at the market through late 2024 and early 2025, stock availability for sales had been rising steadily, alongside modest rental growth and quarterly improvements in lettings. Yet, as the year has progressed, the data suggests the prime London property market is navigating a more subdued and selective phase, with activity dampened by affordability pressures, elevated supply levels, and ongoing economic uncertainties. This evolving environment requires sellers and landlords to be increasingly realistic, while buyers and tenants are likely to remain discerning, particularly at the higher end of the market.
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Source: Noah Wire Services
Verification / Sources
- https://www.property118.com/prime-london-property-market-sees-muted-activity/ – Please view link – unable to able to access data
- https://www.lonres.com/public/monthly-briefing-prime-london-market-february-2025/ – In February 2025, the prime London sales market experienced a steady start, with properties going under offer increasing by 18.7% compared to the previous year and 37.9% above the 2017-2019 average. The lettings market saw annual rental growth rise to 5.0%, with average rents 32.2% above the pre-pandemic average. However, new instructions were down 5.2% annually, and lets agreed fell by 21.7% compared to May 2024, indicating subdued activity in the lettings sector.
- https://www.lonres.com/public/prime-london-market-update-spring-2025/ – The Spring 2025 Prime London Market Update highlighted a 12.4% increase in sales volumes in Q1 compared to the same period last year. New instructions were 20.3% higher in Q1 than Q1 2024. In the lettings market, rents in prime Central London rose by 8.3% annually, and the average yield across prime London was 4.88%, up from 4.56% in Q4 2024. Despite the strong start, 14% of agents forecasted a fall in rents by the end of 2025.
- https://www.lonres.com/public/monthly-briefing-prime-london-market-march-2025/ – March 2025 saw a rebound in the prime London sales market, with a 138% increase in transactions in the £5 million-plus segment compared to the previous year. New instructions surged by 24.0% compared to the same month last year, and stock levels rose by 11.6% year-on-year. The lettings market experienced annual rental growth of 6.0%, the highest in 16 months, with average rents 33.3% above the pre-pandemic average. However, lets agreed decreased by 42.1%, and new instructions fell by 29.4%.
- https://www.napierwatt.co.uk/prime-london-market-march-2025/ – As of March 2025, the prime London property market showed signs of recovery. Sales activity was slightly below the same month last year but remained above the longer-term average. The £5 million-plus market rebounded with a 138% increase in transactions compared to the previous year. New instructions and stock levels saw significant increases, with new sales instructions 240% higher than the previous year and 475% above the pre-pandemic February average. The lettings market experienced annual rental growth of 6.0%, with average rents 33.3% above the pre-pandemic average.
- https://www.lonres.com/public/prime-london-market-update-winter-2024-25/ – The Winter 2024/25 Prime London Market Update revealed a 10.7% increase in stock on the market for sale compared to a year earlier. The lettings market saw a quarterly increase of 2.7% in Q4, with annual growth accelerating to 4.9%. Prime central London was the best-performing area, with growth of 4.2% in Q4 and 7.1% for the full year. The report also commemorated LonRes’ 25th anniversary by offering a holistic view of prime London’s past and present.
- https://www.lonres.com/public/resources/latest-publications/monthly-briefing-prime-london-market-december-2024 – In December 2024, the prime London sales market experienced a normal November following an outstanding October, with properties under offer rising by 20.4% compared to the previous November. New sales instructions increased by 4.4% year-on-year. The lettings market was set for a quiet end to 2024, with annual rental growth slightly increasing to 1.6% in November. Lets agreed decreased by 12.5%, and new instructions fell by 15.6% compared to the previous year.
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Notes: The narrative presents recent data from LonRes, dated 27 June 2025, indicating fresh insights into the prime London property market’s performance in May 2025. The report highlights a 35.8% year-on-year decline in sales transactions and a 3.3% annual increase in rental growth, reflecting current market conditions. The inclusion of specific figures and recent dates suggests a high freshness score. The report’s reliance on data from LonRes, a reputable source, further supports its high freshness rating. No evidence of recycled content or discrepancies was found.
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