Eight in 10 properties sold in London’s most exclusive neighbourhoods are changing hands for less than their asking price, according to research by private bank Coutts. Buyers in prime central London, which includes Mayfair, Belgravia and Knightsbridge, are securing an average discount of 10% as the wider UK housing slowdown reaches the capital’s wealthiest areas.
Prices across the city’s most expensive postcodes fell 5% in the third quarter of 2026, the bank found. The decline leaves some wealthy homeowners facing reductions of hundreds of thousands of pounds in the value of their properties, with losses potentially running into millions.
At the top end of London’s housing market, prices are now 14% below their 2014 peak. Brexit, the Covid pandemic, increased property taxes and rising borrowing costs have all weighed on values. Buying and selling agents have also reported weaker interest from foreign-born purchasers following the abolition of the non-dom tax regime.
The falls have been particularly pronounced in some of the capital’s best-known luxury districts. Coutts identified Knightsbridge and Belgravia, where prices stand 30.8% below their peak, and South Kensington, where values are 26.9% below their high, as the areas hardest hit.
Alex Webster, the bank’s head of lending, said both buyers and sellers had become more cautious even before chancellor John Healey’s first budget in the week of 31 October. Sellers would be looking for signs that the budget could bring back postponed activity, she said, while financing conditions and the broader economy would continue to shape the market.
Borrowing conditions remain a factor despite the Bank of England leaving its base rate unchanged since December. Bond market volatility has pushed up swap rates, which influence fixed-rate mortgage pricing. The central bank’s key rate remains at 3.75%, but expectations are growing that its monetary policy committee will raise it to 4% the following week, marking the first increase in three years.
Fewer sellers are entering the prime central London market. New listings dropped 14% from the previous quarter, while available stock was 6% lower than a year earlier. Transactions fell 9.1% in the third quarter, with the sharpest slowdown among homes priced between £2m and £5m, where sales declined 22.3%.
Separate findings from estate agent Savills showed that purchasers at the very highest price levels were driving activity. There were 26 transactions above £10m in the third quarter, bringing the total over the past year to 127. Those sales had a combined value of £2.88bn.
