Property prices in prime central London have experienced a notable downturn, with some of the city’s most expensive neighborhoods recording double-digit declines, according to recent industry and government data. Real estate analysts and agents attribute the trend to several factors, including higher borrowing costs, tax policy changes, and a shift in demand from international buyers.
Data released by the Office for National Statistics (ONS) shows that while the average price of a U.K. home increased by approximately 2% in the year ending in June, prices in inner London boroughs fell by 8.3%. The decline was most pronounced in the City of Westminster, which includes areas like Mayfair and Belgravia, where prices dropped 25.4% year-on-year. In the City of London and the Royal Borough of Kensington and Chelsea, prices fell by 20.4% and 14.7%, respectively.
According to the data analyst LonRes, properties in prime London spent an average of 186 days on the market in the first half of 2026, an increase from 178 days during the same period in 2025. The average discount from the initial asking price widened from 8.3% to 10.4% over the same period, indicating sellers are accepting lower offers.
Anthony Payne, chief executive of LonRes, stated that prime London properties became overvalued in the mid-2010s following a period of rapid growth. He identified Brexit, the COVID-19 pandemic, increased property taxes, and higher borrowing costs as contributing factors to the current market conditions. “London benefited dramatically from international investment and buyers wanting property here as a store of wealth,” Payne said. “These are the people that inflated the market, but now more and more of them are deserting it.”
Jeremy Gee, managing director at the estate agency Beauchamp Estates, said the market has also been affected by the departure of some high-net-worth individuals from the U.K., partly in response to the abolition of the non-domiciled tax regime. “When there are not that many buyers and lots of properties, the prices are going to be softer,” Gee noted.
Illustrating the price adjustments, Harry Dawes, a Belgravia-based buying agent, cited a flat on Pont Street that sold for £4.4 million in 2014 and later for £3.5 million, which can now be purchased for £2.5 million. Estate agents also pointed to examples in South Kensington and Notting Hill where multi-million-pound properties have seen price reductions of over £1 million.
Despite the broader downturn, the market for “super-prime” properties—those valued at £10 million or more—has shown different activity. According to data from property developer JLL, sales of homes priced at £10 million or more increased by 50% in the second quarter of 2026 compared to the same period in 2025. Similarly, real estate firm Savills reported that transactions for properties between £15 million and £20 million rose by nearly 40% in the same quarter.
Stuart Bailey, head of super-prime London sales at Knight Frank, observed a divided market. He said that buyers are still willing to pay a premium for “the very best in class” properties, described as those with a premium address, views, and recent refurbishments. “It is a matter of premium or discount… and there is nowhere in between,” Bailey said.
While some high-value transactions continue, Beauchamp Estates reported that seven out of 10 of its ultra-prime clients are currently choosing to rent rather than buy, citing costs such as stamp duty and maintenance, as well as uncertainty regarding potential future wealth taxes. This has increased demand in the prime rental market, where Savills reported a 1.6% price rise in the year ending in June.
