Eight out of ten properties in London's most exclusive neighbourhoods are now selling below asking price, according to research by Coutts, the private bank serving wealthy clients. Sellers in prime central London, which covers the city's most expensive postcodes, are facing hundreds of thousands, if not millions, of pounds in losses to home values, with properties selling at an average 10% discount to their asking price.
Property prices in prime central London dropped 5% in the third quarter of 2026, as the wider slowdown in the UK property market affects its wealthiest residents. The highest end of London's property market is now 14% below its peak in 2014. Exclusive areas have been hit particularly hard: Belgravia and Knightsbridge are 30.8% below their peaks, whilst South Kensington is 26.9% below, Coutts said. The decline has been driven by Brexit, the Covid pandemic, higher property taxes, a surge in borrowing costs and a slowdown in interest from foreign-born buyers following the abolition of the non-dom tax regime, agents reported.
Activity in the market has slowed significantly. New listings in prime central London are down 14% compared with the previous quarter and available stock is down 6% year-on-year, Coutts found. Transactions were 9.1% lower in the third quarter, with the biggest slowdown in the £2m-£5m band, where transactions fell 22.3%. Alex Webster, head of lending at Coutts, said buyers and sellers at the top end were taking a more cautious approach. She added that sellers would be watching to see if the chancellor's recent budget "encourages some of that delayed activity to return", though "financing conditions and the wider economic environment will continue to influence the market".
However, the very top of the market shows signs of resilience. Savills found that 26 transactions above £10m occurred in the third quarter, bringing the total to 127 over the past year, worth £2.88bn combined. The Bank of England has held its base rate at 3.75% since December, though expectations are growing that its monetary policy committee will vote to increase the rate for the first time in three years to 4% next week. Volatility in the bond market has driven up swap rates affecting fixed-rate mortgage pricing.
For wealthy homeowners and investors in London's prime postcodes, property values have fallen sharply and the market has become less active, meaning those selling face significant discounts and delays in completing transactions.