Prime central London values are now about 26% below their 2014 peak in nominal terms, according to Savills, after falling another 2.5% during 2026 through its September assessment. Once the rise in consumer prices over the same period is taken into account, the loss in purchasing-power terms is close to half.
The real-terms calculation exposes a much steeper erosion than headline property prices suggest. A home worth £1 million at the 2014 peak would be worth roughly £740,000 at today’s nominal market level on the Savills measure, while the original £1 million would need to have risen substantially merely to keep pace with inflation.
Separate data from Knight Frank point to the same prolonged correction. Its prime central London index shows average prices 22% below their August 2015 peak. September nevertheless produced a 0.3% quarterly increase, the first quarterly rise in four years, suggesting that the market may be finding some support after repeated declines.
The improvement has not erased the sharp repricing facing owners. Knight Frank counted 121 transactions above £10 million in the year to September, unchanged from the previous 12 months, while spending on such properties rose 14% to £2.4 billion. The figures indicate that buyers remain willing to commit to exceptional homes when pricing meets their expectations.
Savills has similarly found a widening divide by property type and neighbourhood. Houses have proved more resilient than flats, while family-house markets such as Notting Hill have recorded smaller annual falls than areas including Earl’s Court, Pimlico and Westminster, where values have dropped by more than 6%.
The downturn dates from a series of changes that increased the cost of owning and trading expensive residential property. Britain restructured stamp duty in December 2014, setting rates of 10% on the portion of residential purchases between £925,000 and £1.5 million and 12% above £1.5 million. Higher charges on additional properties and non-resident purchases subsequently increased transaction costs further.
Tax treatment of internationally mobile wealthy residents has also changed. The remittance-basis system for people previously classed as non-domiciled ended on April 6, 2025, and was replaced by a residence-based regime. Qualifying new arrivals can receive relief on foreign income and gains for their first four years, but longer-term residents generally face UK tax on worldwide income and gains.
That shift matters disproportionately to prime central London, where international wealth has traditionally formed an important part of demand. Savills said nearly half of its agents had reported reduced overseas-buyer demand in London during the second quarter, alongside geopolitical uncertainty, higher borrowing costs and continued sensitivity to taxation.
Another source of caution is the planned High Value Council Tax Surcharge. The government began consulting in May on the measure, announced in the 2025 Budget and aimed at the top 1% of England’s most valuable homes. Savills has said the direct charges are unlikely to be large enough by themselves to have a major effect on prime central London values.
The broader housing market is also subdued. Nationwide said average UK house prices fell 0.2% in September, the fourth monthly decline in five months, leaving annual growth at 0.8%. Higher mortgage rates and economic uncertainty have weakened demand, with London and southern England among the softer regional markets.
Prime London, however, remains highly segmented. Sales above £10 million increased 24% year on year during the second quarter on Savills figures, even as average central London values continued falling. That combination reflects buyers concentrating on scarce, high-quality properties while demanding discounts elsewhere.
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