Average prime London transactions fell by 7.5% in August compared to a year ago, data from property analysts LonRes shows, while sale prices also slipped by 4.2% in the same period.

Its report says: “The prime London sales market recorded a poor month in August, even allowing for the usual summer holiday slowdown.

“On the back of a stronger July, transactions fell in August and value growth faltered.”

Higher valued homes proved harder to shift.

Transactions on properties valued at £5m-plus in August were down by 47.2% compared to last year.

At the end of August there were 30.1% more £5m-plus homes for sale than a year earlier.

But the survey adds that the number of all prime London properties going under offer — a forward indicator — looked more positive, growing by 5.1% compared to the same month last year.

The rental market was characterised by “low activity,” according to the study.

There were 14.5% fewer prime London lets agreed last month compared to a year earlier.

Although, for the year-to-date, lettings activity is 5.2% ahead of where it was at the same point in 2023.

LonRes head of research Nick Gregori says: “Even by usual summer holiday standards August was a quiet month for the prime London sales market.

“If the July boost can be attributed to a new government ‘honeymoon period’, that already seems to be over.

“The Prime Minister and Chancellor are trying to find a balance between being too negative about the state of the economy and making their case for spending cuts and tax rises.”

“The negative sentiment is amplified at the top end of the market, with more specific Budget fears in the form of ‘non-dom’ and other tax changes.”