Prime London's Pre-Budget Paradox: Sales Are Rising, Prices Are Still Falling

📊 MARKET INSIGHT · 25 September 2026 · 7 min read · Hiten Arya, Director

Two figures came out of prime London in the last fortnight that, read separately, tell completely different stories. LonRes data for August shows transactions down 19.0% year-on-year — the weakest August since 2008. Knight Frank's rolling three-month figure to August shows prime central London sales up 6% on the same period last year. Both are correct. Neither tells you what is actually happening unless you read them together, and if you are planning to sell in prime London before the end of the year, that combination matters more than either number on its own.

The numbers that don't add up

Start with the weaker picture. New instructions across prime London were 22.1% lower than August 2025. Properties under offer were down 15.3% year-on-year, though still 9.4% above the 2017–2019 average — a reminder of how thin the comparison years have become. Stock on the market has crept down 4.9% since its September 2025 peak. On the pricing side, the average sale in prime London is now going through at a 10.4% discount to asking price, and annual values across the market are down 7.0%, or 6.7% below 2017–2019 levels.

Set against that, activity in the three months to August was actually 2% above the five-year average across prime central and outer London combined, and prime central London sales specifically were 6% up on the same period in 2025. Something is moving. It just isn't confidence in the way most sellers assume.

Why activity is picking up — and it isn't confidence

Stuart Bailey, head of prime central London sales at Knight Frank, put it plainly: buyers are "using pre-Budget speculation and bond market jitters to negotiate the price down rather than walk away." The Budget on 28 October has created real uncertainty over capital gains tax and the £2m+ council tax surcharge, both covered in our earlier articles. The result is that buyers with capital ready are still buying, but they are using every bit of leverage the moment gives them.

This is a meaningfully different market from a genuine recovery. In a recovery, transaction volumes and prices tend to firm up together. Here, volume is picking up precisely because prices are still giving ground — buyers are transacting at the price they want, not the price sellers listed at.

What "half of stock has cut its price" actually means

Across prime London, 50% of stock currently on the market has had at least one price reduction. That is not a fringe statistic — it is the median condition of the market. If a property has been listed for any meaningful length of time without a reduction, in the current climate that is itself a signal to a buyer's agent that the seller may not be reading the room. Overpricing in this market does not simply mean a slower sale; it means arriving at completion having conceded more than a seller who priced correctly from day one, because the eventual reduction plus the accumulated time-on-market discount both come out of the same number.

The £5m+ market: busier, not stronger

At the very top of the market, instructions are down 10.4% year-on-year but still running 43.3% above the 2017–2019 average, and transactions are down 18.8% annually while remaining 39.1% above that same historic baseline. So the £5m+ market is structurally busier than it was before 2020, but it has cooled compared with 2025. In that kind of market, a personal, relationship-led approach to selling tends to do better than a standard high-street listing.

What this means if you are selling before the Budget

The five weeks between now and 28 October are not a reason to wait — waiting into a period of confirmed tax policy, whatever it turns out to be, removes the negotiating position sellers currently hold as the more informed party about their own asking price. Sellers who price at, or close to, current market evidence rather than last year's comparable are transacting. Sellers who price for a market that no longer exists are the ones contributing to that 50% reduction statistic in a few weeks' time. If you are weighing a sale in the coming months, the conversation to have now is about where your specific property actually sits against August's completed transactions — not against the asking prices of properties still sitting unsold.

What this means if you are buying

For buyers with capital deployed and ready, this is a genuine negotiating window, not a reason to hold off entirely. Motivated sellers are conceding real ground — an average of 10.4% off asking across the market, and considerably more on individual properties that have been on the market through the summer. The risk for buyers is timing it too cleverly: once the Budget removes the current uncertainty, one way or the other, that negotiating leverage narrows quickly.

Why discreet, off-market selling suits this market

When half the stock on the open market has already been reduced, every listing on a public portal carries a visible price history, and buyers read it. That is why off-market selling deserves serious consideration. The property is introduced privately to qualified buyers and investors, there is no public record of reductions or time on the market, and the negotiation happens on the merits of the property rather than on how long it has been advertised. For a seller in a market like this one, keeping that information private is real leverage.

Off-market selling isn't right for every property. When it is, it gives you privacy, control over who views the home and a negotiation built on facts. As a boutique brokerage, every client works with me directly, from the first valuation to completion.

A note for HMO owners

HMO owners face the same pre-Budget caution plus pressures of their own: the MEES 2030 EPC deadline, tighter refinancing under the Renters' Rights Act and the spread of Article 4 restrictions, all covered in our recent HMO articles. More HMO landlords are now weighing an exit rather than a refinance. As specialist HMO brokers working across England, we value and sell HMOs on the numbers that matter to serious investors (licensing, rent roll, compliance and yield), and we can market them openly or place them privately with investors looking for exactly that kind of stock.

The bottom line

Prime London is not a market moving in one direction right now. It is a market where activity and price are pulling apart, and the sellers who understand that distinction are the ones completing sales. Reading a single headline statistic — "transactions up" or "prices down" — without the other tells you nothing useful about your own decision.