Property transactions across prime London have shown resilience, with sales in prime central London (PCL) and prime outer London (POL) collectively 2% above their five-year average in the three months to August. This performance comes despite renewed pressure on borrowing costs and rising UK government bond yields, which have put upward pressure on mortgage pricing.
Prime outer London recorded a stronger performance, with transactions 10% above its five-year average. In contrast, prime central London saw an 8% decline compared to its five-year average, though sales in PCL were 6% higher than in 2025. Knight Frank data indicates that overall transaction numbers were 18% higher than a year earlier, a period affected by greater uncertainty around tax changes.
Average prices in PCL fell by 3.3% in the year to August, making values 23% lower than 11 years ago. In POL, prices decreased by 0.4% over the year, standing 7% lower than a decade ago. Stuart Bailey, head of prime central London sales at Knight Frank, noted that buyers are using market jitters to negotiate prices down rather than abandoning deals.
The market now faces further uncertainty ahead of the Budget on 28 October, particularly if borrowing costs remain high. Concerns also include the abolition of the non-dom tax regime, the higher stamp duty surcharge on additional properties, and speculation over future wealth taxes.