Prime central London property values dropped 5% in the third quarter of 2026, with properties closing at an average discount of 10%. Over the same period, total transaction volumes fell by 9.1%, driven by a significant 22.3% drop in deals valued between £2m and £5m. Potential vendors are holding back as new listings decreased by 14%, influenced by bond market volatility and anticipation of the Bank of England raising its base rate to 4%. However, the ultra-luxury segment remains somewhat resilient, recording 26 deals exceeding £10m during the quarter.
Key points
Sellers are increasingly pulling back from the market, leading to a 14% quarter-on-quarte…: Sellers are increasingly pulling back from the market, leading to a 14% quarter-on-quarter drop in newly listed homes.
Higher borrowing costs, tax changes, and the abolition of the non-dom regime continue to…: Higher borrowing costs, tax changes, and the abolition of the non-dom regime continue to suppress high-end residential real estate values.
Industry participants are delaying major property decisions while waiting to see the cont…: Industry participants are delaying major property decisions while waiting to see the contents of Chancellor John Healey's upcoming budget.
Sources checked by our analysis pipeline: 1
Eight out of 10 properties in London’s most exclusive neighbourhoods – such as Mayfair, Belgravia and Knightsbridge – now sell below asking price, according to research by Coutts, which provides private banking services to wealthy clients.
Property prices in “prime central London”, which covers the city’s most expensive postcodes, have dropped 5% in the third quarter of 2026, as the slowdown in the UK’s property market hits its wealthiest residents.
It means some affluent people are facing hundreds of thousands, if not millions, of pounds in losses to the value of their homes, with properties selling at an average 10% discount to their asking price, Coutts found.
Prices in the highest end of London’s property market are now 14% below their peak in 2014, having been hit hard by Brexit, the Covid pandemic, higher property taxes and a surge in borrowing costs. Buying and selling agents in the capital have also reported a slowdown in interest from foreign-born buyers after the abolition of the non-dom tax regime.
Exclusive areas such as Knightsbridge and Belgravia, and South Kensington have been hit…
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