Some 56% of homes in prime London underwent a price reduction before their sales in Q4 2018.
This compared to 49% of properties sold at a reduced price in the same period in 2017, according to LonRes.
Its London Residential Review for winter 2018 reported an average price of £1,175 per sq ft, down by 5.7% from the previous year.
Concerns over the UK economy and impact on house prices has led to a slowing of the market, driving down transactions and prices, said LonRes.
The gap between asking prices and achieved prices rose to 11.6%, up from 10.1% the previous year.
As a result, fewer vendors are bringing prime homes to market, with new instructions down by 20% and transactions down by 13%, compared with Q4 2017.
In 2018, more prime homes were removed from the market than were sold.
Marcus Dixon, head of research at LonRes, said: “In an uncertain market the response by both buyers and sellers in prime London has been to hunker down and observe rather than participate.”
Rental uptick
As the for-sale market drags, would-be buyers are switching to rental alternatives and fewer leases are being agreed at a discount.
Average rents rose to £43 per sq ft in the final quarter of last year, up by 1.9% on 2017.
Tenants negotiated an average discount of 4.9% off initial asking rents during Q4, down from 6.4% a year earlier.
Across all rental properties, 31% underwent a price reductions before securing a tenant, compared with 41% in Q4 2017. LonRes added that cautious landlords are holding off from upping rents: 72% of agents surveyed said most of their landlords were not raising rents on renewal.
Dixon said: “Despite fewer new lets agreed, owing to an increase in renewals, stock levels are low and competition among prospective tenants is leading to increases in achieved rents in most central London areas.
“Fewer landlords are needing to reduce their asking prices and discounts have fallen back.”
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