The number of properties available for sale in London’s prime market fell by 3.4% during the three months to September 2025, according to data from Benham and Reeves.
The decline occurred during a period when Chancellor John Healey was reportedly considering lowering the threshold for the Mansion Tax, also known as the High-Value Council Tax Surcharge, from £2 million to £1.5 million. The tax is scheduled to take effect from April 2028.
Healey has since dropped the proposal, but not until earlier this month, meaning the uncertainty may have influenced market activity during the third quarter.
Regional variations
The total number of properties for sale in the Capital’s prime market stood at 3,778 at the end of the quarter. However, the figures revealed significant variations across different locations within the prime London market.
Prime property stock declined across 11 locations, with Fitzrovia recording the sharpest fall at 16.5%, followed by Marylebone at 13.4%, Mayfair at 13.3%, Pimlico at 12.8%, and Victoria at 9.9%. Regents Park saw a reduction of 6.3%, while St John’s Wood recorded a decline of 3.4%.
In contrast, some areas including Kensington, Notting Hill, and Chelsea experienced increases in available prime listings during the same period, demonstrating divergent trends within the sector.
Marc von Grundherr, Director at Benham and Reeves, said: “The third quarter has highlighted the varied nature of London’s prime property market, with available stock falling overall, but individual locations moving in very different directions. This reinforces the importance of looking at local market conditions rather than treating prime London as a single, uniform market.”
Market implications
The data suggests that speculation around potential tax changes can impact seller behaviour in the high-value property market, even before policies are confirmed or implemented. The 3.4% quarterly decline represents a notable shift in a market segment that typically sees more stable inventory levels.
The contrast between different prime London locations also indicates that buyer and seller activity patterns vary considerably depending on specific neighbourhoods, with factors beyond tax policy likely influencing individual area performance.
With the Mansion Tax proposal now reportedly shelved, market observers will be monitoring whether the fourth quarter sees a reversal of the inventory decline recorded in Q3.
