August’s prime London rental market saw higher levels of instructions and agreed lets, plus an acceleration in rental growth, according to data consultancy Lon Res.
Figures indicate an annual increase of 14.4% in lets agreed and a 15.5% increase in new instructions. The stock of available rental properties also increased, with 21.4% more homes on the market across prime London at the end of August than a year earlier.
Despite these increases, all metrics remain consistently below pre-pandemic levels, with lower supply continuing to limit activity.
Annual rental growth in July was 4.3%, up from a revised 3.2% in July. Rents across prime London are now 37.3% above their 2017-2019 (pre-pandemic) average. The average discount from asking rent was 1.9% in August, the lowest since late 2023.
The sales market in prime London is a lot less buoyant.
LonRes reports that there were 23.9% fewer transactions in August than the same month a year ago, and 23.6% fewer than the 2017-2019 (pre-pandemic average) August average.
This was the second month in a row when activity was more than 20% below last year. However, under offers were 13.3% higher in August on an annual basis and have now risen for three consecutive months. With the average time from under offer to exchange around 90 days we expect to see this translate into higher sales volumes in autumn. This is despite rising numbers of deals falling through – these were up 13.6% in August compared to the same month last year.
New instructions were 10.8% higher than the same month last year and 0.6% lower than the 2017-2019 August average.
Price reductions also rose on an annual basis for the tenth consecutive month. There were 23.5% more reductions in August compared to a year ago. Stock on the market at the end of August was 17.7% higher than last year and 23.2% above the level five years earlier (August 2020) – although it’s worth mentioning that the 2020 baseline is volatile due to the impact of lockdown on the market.
Looking at the summer as a whole – with data for June, July and August combined – shows that under offer numbers are strong, with summer 2025 recording the highest level since 2015, 35% above the 2017-2019 summer average.
Under offer levels were weaker earlier in the year and this is borne out by the most recent sales data (based on exchanges), which has been trending downwards over recent summers and for 2025 was 14.6% lower than the 2017-2019 summer average. New instructions have typically been more consistent over the years and 2025 saw a moderate increase compared to summer 2024 to sit 17.4% above the 2017-2019 summer average.