Eight out of ۱۰ properties in London’s most exclusive neighbourhoods – such as Mayfair, Belgravia and Knightsbridge – now sell below asking price, according to research by Coutts, which provides private banking services to wealthy clients.
Property prices in “prime central London”, which covers the city’s most expensive postcodes, have dropped ۵% in the third quarter of ۲۰۲۶, as the slowdown in the UK’s property market hits its wealthiest residents.
It means some affluent people are facing hundreds of thousands, if not millions, of pounds in losses to the value of their homes, with properties selling at an average ۱۰% discount to their asking price, Coutts found.
Prices in the highest end of London’s property market are now ۱۴% below their peak in ۲۰۱۴, having been hit hard by Brexit, the Covid pandemic, higher property taxes and a surge in borrowing costs. Buying and selling agents in the capital have also reported a slowdown in interest from foreign-born buyers after the abolition of the non-dom tax regime.
Exclusive areas such as Knightsbridge and Belgravia, and South Kensington have been hit the hardest, Coutts said, with prices ۳۰.۸% and ۲۶.۹% below their peaks respectively.
Alex Webster, head of lending at the bank, said buyers and sellers at the top end of the market were taking a more cautious approach, even before the chancellor, John Healey’s, first budget this week.
Sellers will now be watching to see if the budget “encourages some of that delayed activity to return”, she said. “But financing conditions and the wider economic environment will continue to influence the market.”
There has been no change in the Bank of England base rate since last December but volatility in the bond market has driven up the swap rates that influence the pricing of fixed-rate mortgages.
While the Bank of England has kept its key interest rate on hold at ۳.۷۵%, expectations are growing that next week its monetary policy committee will vote to increase the rate for the first time in three years to ۴%.
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In the meantime, sellers in prime central London are increasingly shying away, Coutts found, with new listings down ۱۴% compared with the previous quarter and available stock down by ۶% year-on-year.
Transactions were ۹.۱% lower in the third quarter of this year, it said, with the biggest slowdown in the £۲m-£۵m band, where transactions were down ۲۲.۳%.
However, separate research from the estate agent Savills found that buyers at the very top end of the market are driving activity, with ۲۶ transactions above £۱۰m in the third quarter of this year, taking the total to ۱۲۷ over the past year. Together, these sales were worth £۲.۸۸bn, it found.
