A stunning Georgian exterior, an expansive balcony, and a prestigious location in South Kensington, just a short walk from the Natural History Museum and the Victoria and Albert Museum, highlight a west London apartment at Queen’s Gate Gardens. However, its asking price has seen a significant decline of nearly £1 million over the last year, now listed at £4.4 million.
This trend is not unique. A nearby residence that was initially priced at £20 million has been reduced to £14 million this year, according to a local real estate expert. In Notting Hill, a property with a stucco facade that entered the market two years ago at £16 million is now available for under £14 million.
The high-end property market in London is experiencing a downturn. While rising borrowing costs and affordability challenges impact typical buyers, even the wealthiest individuals are slashing the prices of their multimillion-pound residences.
This situation starkly contrasts with the broader UK property market, where, as of September, the average house price stood at just below £275,000, based on Nationwide data. Affluent neighborhoods exhibit a stark difference from much of London, where many residents struggle to enter the housing market, face increasing rents, and deal with a lack of affordable options. Estate agents have described the flat market as “inactive.”
Areas like Knightsbridge, adjacent to Hyde Park and home to Harrods, are also feeling the effects, as noted by Harry Dawes, a buying agent in Belgravia. He cited a flat on Pont Street, a mere five-minute walk from Harrods, that was sold for £4.4 million in 2014, then for £3.5 million, and is now available for £2.5 million.
For many years, property prices in London surged ahead of the national average. However, that gap has been gradually closing: while UK home prices rose by approximately 2% in the year ending June, prices in central London decreased by 8.3%, according to the Office for National Statistics.
The decline has been particularly severe in Westminster, which includes prestigious areas like Marylebone, Belgravia, and Mayfair, where prices have dropped by 25.4% year-on-year. In the City, prices fell by 20.4%, and in Kensington and Chelsea, they decreased by 14.7%.
Properties in the capital became overpriced in the mid-2010s following a period of rapid appreciation, as explained by Anthony Payne, chief executive of the data analytics firm LonRes. The market subsequently faced challenges from Brexit, the COVID-19 pandemic, increased property taxes, and rising borrowing rates.
Current owners who purchased at the peak of the market are now confronted with potential losses of up to 25% if they decide to sell, according to estimates from the estate agency Savills.
“London attracted substantial international investment, with buyers viewing property as a safe investment and a means of generating wealth,” Payne noted. “These buyers drove up the market, but an increasing number are now leaving.”
Jeremy Gee, managing director of luxury estate agency Beauchamp Estates, which manages a £42 million sub-penthouse with views over Hyde Park, mentioned that the decline is partly due to the exit of ultra-wealthy individuals from the UK, particularly following the elimination of the non-domicile tax status.
“A segment of the population has recently departed the UK for various reasons, mainly related to taxation,” he stated. “With fewer buyers and an abundance of properties, prices are inevitably softening. Many of our clients have opted to sell their properties and move on.”
Tax reforms have also created unease among sellers. Former Chancellor Rachel Reeves announced plans for a “mansion tax” targeting homes valued over £2 million last year.
This uncertainty has contributed to a slowdown in the upper tiers of London’s property market, with prime properties remaining on the market for an average of 186 days in the first half of 2026, compared to 178 days during the same period in 2025, as reported by LonRes. Additionally, the average discount from asking prices increased from 8.3% to 10.4%, indicating that sellers are more willing to accept lower offers.
Sellers who typically hold onto these properties for a decade are reluctantly accepting the situation, according to Dawes. “Older sellers must adopt a long-term perspective and realize that their latest sale may not yield favorable returns,” he remarked.
“We purchased three flats for a client’s children last year—two in Chelsea and one in Notting Hill—and every seller was taking a loss.”
Despite substantial reductions in multimillion-pound properties, Stuart Bailey, head of super-prime sales at Knight Frank, emphasized that there remains a segment of buyers willing to pay above asking prices for “top-tier” properties.
“Exceptional locations, stunning views, impeccable style, and recent renovations are still in demand,” he explained. “It’s a matter of premium versus discounted properties, and the latter is dragging down the market.”
Sellers are increasingly adjusting their expectations, he added. “They don’t foresee significant price growth in the near future.”
Concerns about potential wealth taxes under a Labour government also linger, Bailey noted. “However, many affluent individuals accept the reality of taxation and the high cost of living in London.”
Camilla Dell, a buying agent, reported that demand remains robust among diverse international buyers, including those from the United States, Singapore, and Nigeria. She mentioned that political issues rarely come up in discussions. “Most buyers understand that the UK may not have the most stable political climate, yet they desire to reside here,” she stated. “The recent assurance from Andy Burnham against changes to property taxes in the upcoming budget has also helped.”
The sluggish price trends in London sharply contrast with markets in cities like San Francisco.
