Luxury property deals in London's exclusive £5 million-plus market surged 45% in the second quarter of 2026 compared to the first three months of the year, according to Savills. The significant uptick was driven primarily by a spike in high-value transactions at the very top end, with 107 sales exceeding £5 million during Q2.
The increase was particularly pronounced in the highest price brackets. Transactions for properties valued between £10 million and £15 million leapt by an impressive 58% year-on-year, while sales in the £15 million to £20 million range saw a 38% rise. Overall, £1.22 billion was spent on luxury homes during Q2 2026, making it the strongest quarter for this segment since the final quarter of 2024.
A closer look at the market reveals a 'split market', where demand for exceptional properties remains robust but sales in the £5 million to £10 million segment are more subdued. According to Frances McDonald, director of research at Savills, buyer preferences have shifted, with traditional prime areas such as Kensington and Chelsea continuing to dominate.
However, a new hotspot has emerged: Hampstead. The affluent London village secured a place in the top three locations for £5 million-plus sales for the first time, accounting for nearly one in ten such deals. Neir Gigi, head of Savills Hampstead, attributes this to strong domestic buyer demand for quality homes, limited supply, and competitive pricing.
While activity did show signs of strengthening towards the end of the quarter, overall sales in the £5 million-plus category remained 7% lower than a year earlier. A slowdown across the broader prime residential sector likely contributed to this decline. Nonetheless, June sales were up 6% compared to June 2025, hinting at potential growth in the coming months.
The shift towards houses from flats is also telling, with the latter making up only 29% of sales – their lowest share since 2021. This trend suggests a softening of investor demand and fewer purchases from international buyers, contrasting with the pandemic-era focus on space, gardens, and home office accommodation.