Less speculation

By comparison, this year things have been much quieter. A rumour that the government was considering replacing council tax and stamp duty with a single property tax, was quashed relatively swiftly by the new prime minister.

More recently, there have been suggestions that the threshold for the new High Value Council Tax Surcharge, due to come in in April 2028, might be dropped to £1.5 million. All the well-rehearsed reasons as to why this might not be such a good idea have duly come out of the woodwork.

Less foreboding

And so, while there is continued pressure on prime property prices, there isn’t the same sense of foreboding hanging over the market.

Prime property price pressure

We’ll be releasing our latest Prime UK Residential report later in the week, and you can sign up for Thursday’s accompanying webinar. 

In both, we’ll be taking a closer look at what’s going on at the top end of the market. In the meantime, we can share some headline figures on house prices from our prime property index. This shows:

• Prices in central London fell by -1.5% in the third quarter of the year, leaving them down -4.8% year on year.
• Elsewhere in the capital, they fell by -1.1% in the quarter and -3.0% over the past 12 months.
• Prices of prime homes in Scotland and the North have been the most resilient.

Fewer mortgage approvals

Over in the mainstream market, meanwhile, further upward pressure on the cost of fixed-rate mortgages meant a fourth successive month of weak mortgage approvals. These came in below 55,000 in August, meaning there have been 33,000 fewer mortgage approvals compared to the same four-month period last year.

The announcement of a successor to the Help to Buy scheme, cunningly renamed by politicians as to Your First Home, could not have come soon enough for the housebuilding industry.

Meanwhile, the Nationwide Index puts annual mainstream house price growth at a less than inspiring 0.8%. 

Rental growth in a more regulated environment

In our prime report, we’ll also be looking at how increased financial and regulatory pressures have affected landlord profitability and the number of sales of investment property. The story is more nuanced than you might expect.

Still, this means there are fewer homes to rent and rents are rising. In the prime market, that rental growth is weighted to less expensive homes, where there is more demand from needs-based tenants. So, while rents in central London have risen by an average of 1.9% over the past year, they have gone up by 3.3% in the market below £1,500 per week.

Elsewhere in the prime London markets they have risen by 2.9%, while across the commuter belt annual rental growth averaged 2.1%. That rises to 3.0% for properties letting at under £3,000 per calendar month. That’s a wrap for another month.

Do look out for our prime report later in the week.

• However, in the round prime regional property prices fell by an average of -1.5% in the three months to the end of September. That means they are -4.1% lower than at the same time in 2025.

Yet, activity remains. According to TwentyCi, agreed sales in the markets over £1m and £2m were around 94% of last year’s level in the third quarter.