Buyer caution is broad—but it is not universal

The July RICS survey, published on 13 August, recorded a net balance of −28% for buyer enquiries and −30% for agreed sales. The house-price balance was also −30%.

These figures measure the proportion of surveyors seeing falls rather than the size of any fall. They indicate breadth of sentiment—not a 30% decline in prices.

London’s twelve-month price expectation weakened from −10% to −23%, while London, the South East and South West continued to report greater downward pressure than the national average.

Mark’s view: “The market is quiet” is not a sufficient diagnosis. It describes the symptom without identifying the cause.

Buyers are behaving differently according to property type. They will still compete for an exceptional family house, a genuinely scarce address or a home requiring no immediate work. They are far less forgiving of ordinary flats, unresolved leasehold questions and pricing based on what somebody paid five years ago.

This is not one slow market. It is several markets moving at different speeds.

A stronger economy may delay mortgage relief

UK GDP grew by 0.4% during the second quarter, following 0.6% growth in the first. Services expanded by 0.5%, while household consumption increased by 0.3%.

Bank of England chief economist Huw Pill said the figures supported the argument for higher interest rates. Pill was one of three Monetary Policy Committee members who voted to raise Bank Rate from 3.75% at July’s meeting.

The average UK five-year fixed mortgage rate reached approximately 5.66% in July—its first monthly rise since April. Higher borrowing costs were estimated to add as much as £201 to a typical London buyer’s monthly payment.

Mark’s view: Good economic news is not automatically good news for buyers.

A resilient economy reduces the risk of recession, but it also gives the Bank of England less reason to cut rates. Buyers waiting for dramatically cheaper mortgages in September may therefore be disappointed.

The sensible buyer should negotiate the property and the finance separately: agree the right price, secure the best available product and retain flexibility to refinance later. Trying to time both perfectly can mean securing neither.

For sellers, checking a buyer’s affordability at the beginning of negotiations is increasingly important. A mortgage agreement obtained several months ago may no longer reflect the buyer’s actual costs.

The flat market’s problem is bigger than presentation

Zoopla analysis reported this month found that approximately 87% of London flats listed during 2025 had not sold within six months, compared with 80.5% across England.

The analysis identified a clear affordability mismatch: investor-owned London flats were typically being offered around £450,000, while the average first-time-buyer budget was closer to £425,000. Service charges, ground rents, short leases, building-safety issues and mortgage restrictions are adding further resistance.

The current programme of leasehold reform proposes capping most ground rents at £250 before eventually reducing them to a peppercorn, but major changes remain dependent on legislation and implementation.

Mark’s view: This is where policy and market reality collide.

Buyers are not rejecting every flat. They are rejecting uncertainty. A £10,000 reduction does not solve an unexplained service-charge increase, an absent Section 20 response or a lease-extension liability the buyer cannot quantify.

Before launching a London flat, sellers should have the lease, management pack, service-charge accounts, planned-works information and building-safety documents organised. That information is now part of the marketing proposition—not merely something for solicitors to confront after an offer.

Reform may eventually improve confidence, but sellers cannot price today’s property on the basis of tomorrow’s legislation.

Prime Central London: scarcity still wins, ambiguity does not

No reliable new neighbourhood-level index for Chelsea, Belgravia or Notting Hill was released this month. The most relevant fresh signals are the worsening London sentiment reported by RICS, higher financing costs and the exceptionally high failure rate for London flats.

Mark’s view: Those three neighbourhoods demonstrate why Prime Central London cannot be discussed as a single market.

In Chelsea, a beautifully positioned freehold house and a flat with escalating service charges may sit within a few hundred yards of one another but face completely different demand.

In Belgravia, the very best houses remain genuinely scarce. Many purchases are less mortgage-dependent, but buyers still calculate Stamp Duty, holding costs and the opportunity cost of capital. Wealth does not remove commercial judgement.

In Notting Hill, turnkey family houses can still create urgency. Flats, compromised layouts and ambitious prices face much more competition for attention.

At this level, simply placing a property on the portals is increasingly inadequate. The seller needs a controlled campaign explaining why this particular property deserves to outperform the weaker London backdrop.

South West London: houses and flats are separating

RICS reported that price pressure across the South West remained more negative than the national average. The national flat-market data also has particular relevance across Fulham, Wandsworth, Battersea, Streatham and neighbouring markets, where flats provide the entry point for many first-time buyers.

Mark’s view: The family-house market remains needs-driven. Schools, another child, a garden and an extra bedroom create deadlines that economic commentary does not remove.

But buyers now compare every compromised house against the cost of improving it. A £100,000 refurbishment is no longer treated as a future problem when it must be financed at today’s rates.

The flat market is more exposed. Sellers are competing for buyers constrained by affordability assessments, service charges and deposit requirements. The winning strategy is not automatically another reduction; it is removing uncertainty, presenting the documentation properly and pricing within the buyer’s actual search bracket.

Key takeaway

London is no longer divided simply by postcode. It is divided by certainty.

The properties selling are those where buyers can understand the value, calculate the risk and see a reason to act. The ones stalling tend to combine optimistic pricing with unanswered questions.

For sellers, certainty is now part of the product.