Property prices in prime central London areas have declined significantly, with some neighbourhoods experiencing drops of more than 25% from their previous peaks. Inner London boroughs recorded an 8.3% price decrease in the year to June, while the UK average rose by approximately 2%, according to the Office for National Statistics. Westminster saw the steepest decline at 25.4% year-on-year, followed by the City at 20.4% and Kensington and Chelsea at 14.7%.
Anthony Payne, chief executive of LonRes, stated that London properties became overvalued in the mid-2010s. The market has since been affected by Brexit, the Covid pandemic, increased property taxes, and rising borrowing costs. Owners who purchased at peak prices now face potential losses of up to 25% if they sell, according to estimates from Savills.
Jeremy Gee, managing director at Beauchamp Estates, attributed the decline partly to the departure of high-net-worth individuals from the UK, particularly following the abolition of the non-dom tax regime. The announcement of a proposed mansion tax on properties valued over £2m has also contributed to market uncertainty, according to industry professionals.
Prime properties spent an average of 186 days on the market in the first half of 2026, an increase from 178 days in the corresponding period of 2025, according to LonRes data. The average discount to asking price widened from 8.3% to 10.4% over the same period. Harry Dawes, a buying agent, noted that sellers are accepting losses.
Stuart Bailey, head of super-prime London sales at Knight Frank, described a two-tier market where premium properties still attract buyers willing to pay above asking price, while discounted properties are dragging the market down. Sellers are reportedly becoming more realistic about pricing as they "do not see material price growth on the horizon."