Prime property prices continued their decline in the third quarter of 2026, though the pace of this fall is slowing as sellers adjust their expectations to secure deals. Savills' latest prime sales index reveals that prime central London values decreased by 1.5% between July and September, resulting in a 4.8% annual decline. Prices in these areas are now 27% below their 2014 peak.
The downturn is also evident outside central London. Prime outer London prices saw a 1.1% fall during the quarter and a 3% decline over the year. Savills noted that this annual decline in outer London is the steepest recorded in more than eight years.
Despite these price adjustments, more realistic asking prices appear to be aiding transactions. Data from TwentyCi indicates that agreed sales above £1 million and £2 million reached 94% of their levels from a year earlier during the third quarter. Activity remains concentrated among buyers with a clear need to move, rather than those making discretionary purchases.
The proposed High Value Council Tax Surcharge is adding to market uncertainty, particularly at the upper end. Outer London houses valued at £2 million or more experienced a 2.5% annual fall, compared to a 1.3% decline for properties below £1 million. A similar trend is observed in prime regional markets, where properties at the higher end fell 5.5% over the year, while homes below £1 million saw a 2.9% decline.
Frances McDonald, director of research at Savills, stated that the market has become increasingly sensitive to price thresholds, with £2 million now representing a significant dividing line for buyers. She added that a sustained return to price growth would likely require greater certainty, with the market currently driven by motivated buyers.