There is always a reason to wait. Yet prime market transactions continue because life events, family priorities, business decisions and wealth planning cannot be postponed indefinitely.

Price sensitivity undoubtedly remains but those who are realistic on what they’re likely to achieve are by far the most successful in today’s market.

THE WIDER BACKDROP

Despite a short-lived peace deal in mid-June, the conflict in the Middle East rumbles on, leading to higher fuel costs, inflation and mortgage rates.

Rumours surrounding the Autumn Budget have paled into insignificance compared to last year. Importantly, a wholesale review of property taxation appears to have been ruled out.

But there is still the possibility that the 2026 Budget will impact the prime property markets in some way.

PROGRESS THROUGH REPRICING

Our latest buyer and seller survey suggests that buyer budgets have held up relatively well, despite this challenging backdrop. So, while prime prices continued to fall during the third quarter, they generally did so at a slower pace than both the period from April to June this year and the same quarter of last year.

And market activity above £1 million continues to be steady. Cash buyers, unaffected by borrowing costs, have played a crucial part, accounting for more than half of prime purchases so far this year.

Still, in common with other buyers, they have only been willing to commit when prices and quality clearly align.

This alignment has been necessary because there has been a gap between agreed sales and new properties coming to the market. Over time this has led to a gradual build-up of unsold properties, allowing buyers to be more selective and meaning sellers have had to compete for interest.

PINCH POINTS

The resultant pressure on prices has been particularly evident in the market over £2 million in England.

Of course, this comes at a time when valuations are being undertaken for the new High Value Council Tax Surcharge. The thresholds have not just become sticking points, they have also added to the scrutiny around pricing more generally.

Even so, there is a sense that buyers are beginning to realise the value on offer in the country house market, where larger price adjustments have come earlier and there are the first signs of a shortage of new stock coming to the market.

REGIONAL TRENDS

Prime markets furthest from the capital, including the Midlands and North of England, Scotland and Wales, have generally been most resilient. They have seen price falls of less than -1% in the past quarter, while the price falls in London’s commuter zone and across the rest of the South of England have averaged closer to -2%.

Prices in prime central London have also continued to adjust. Buyers have remained selective, as they look to take advantage of the opportunity to buy at values that are well below previous peaks. Consequently, there has been a sharp eye on quality and pricing. Secondary and overpriced stock has proved much harder to sell or evoke buyer interest.

In London’s more domestic prime markets, a greater reliance on mortgage debt means values fell by -1.1% in total during the third quarter, unchanged from the preceding three months.

CONCLUSION

The outlook for the prime property market remains dependent on a number of external political and economic factors.

It seems increasingly unlikely that we will see a swift resolution to the standoff in the Strait of Hormuz. That suggests inflationary pressures in the economy will continue to gradually build, adding to the likelihood that the Bank of England will raise the base rate over the coming months.

This has quickly fed into fixed rate mortgage costs, which are likely to remain elevated for the rest of this year and into next. On the flip side, there appears to be less risk of extensive property tax changes compared to this time last year.

That points to less disruption at the top end of the housing market than at the end of 2025, but continued price sensitivity. While these influences will continue to drive sentiment, they are unlikely to completely supersede the underlying motivations that drive people to move.

And the experience of the past year tells us that activity doesn’t necessarily depend on perfect market conditions. Buyers and sellers have continued to transact, adapting their expectations to an evolving economic and political environment.

Price growth is only likely to return once we have more certainty. In the meantime, progress will continue to matter more than perfection.

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