Eight out of ten properties in prime central London now sell below asking price, with prices in the capital’s most expensive postcodes falling 5% in the third quarter of 2026, according to research by Coutts, the private banking service.
Properties in areas including Mayfair, Belgravia and Knightsbridge are selling at an average 10% discount to their asking price, with some owners facing losses of hundreds of thousands or millions of pounds. Prices in the highest end of London’s property market are now 14% below their 2014 peak.
Regional variations in price declines
Knightsbridge and Belgravia have experienced the steepest declines, with prices 30.8% below peak levels, whilst South Kensington has seen values fall 26.9% from their highest point. The falls have been attributed to Brexit, the Covid pandemic, increased property taxes and higher borrowing costs.
Alex Webster, head of lending at Coutts, said buyers and sellers at the top end of the market were taking a more cautious approach, even before the chancellor’s first budget this week. She noted that financing conditions and the wider economic environment would continue to influence the market.
Transaction volumes decline
New listings in prime central London fell 14% compared with the previous quarter, with available stock down 6% year-on-year. Transactions were 9.1% lower in the third quarter, with the biggest slowdown in the £2 million to £5 million band, where transactions dropped 22.3%.
Buying and selling agents have reported reduced interest from foreign-born buyers following the abolition of the non-dom tax regime. The UK property market shows resilience despite negative sentiment in some segments, though prime central London appears particularly affected.
Whilst the Bank of England has maintained its base rate at 3.75%, volatility in the bond market has driven up swap rates that influence fixed-rate mortgage pricing. Market expectations suggest the monetary policy committee may vote to increase the rate to 4% next week for the first time in three years, which could impact UK house price growth as mortgage rates climb further.
Ultra-high-end market remains active
Separate research from estate agent Savills found that buyers at the very top end of the market continue to drive activity, with 26 transactions above £10 million in the third quarter. Over the past year, 127 transactions above this threshold have completed, with a combined value of £2.88 billion.
The divergence between the mid-to-upper prime market and ultra-high-end transactions suggests that whilst the broader prime central London market faces headwinds, the very top tier remains relatively insulated from pricing pressures affecting properties below the £10 million threshold.
