Coutts London Prime Property Index reveals long-term value in central postcodes

Prime London’s property market closed 2025 in a state of muted price movements, subdued activity, and tightening supply. Buyer sentiment remained cautious in the run‑up to the Autumn Statement, stalling decision‑making and contributing to one of the quietest year‑ends in recent times. Prices now sit broadly in line with levels last seen in Q2 2013, underscoring a decade of stagnation across many prime sub‑markets.

While discounts intensified sharply through Q4—giving buyers greater negotiating power—this dynamic may not persist into 2026.

Prime London prices edged up 0.1% in Q4, leaving values down 2.3% over the year and 10.3% below their peak of Q2 2014. Prices are effectively unchanged from twelve years ago, highlighting the long‑term underperformance of several prime areas.

Some outer-prime markets continued to outperform.

• For example King’s Cross & Islington saw positive annual price growth, supported by stronger domestic demand.

In contrast, deep value remains evident in Prime Central London:

• Knightsbridge & Belgravia prices sit 29.5% below peak.
• Chelsea remains 20.5% below peak, presenting compelling long‑term value for buyers.

Discounting reached its highest level in more than five years driven by the uncertainty in the run up to the Autumn Statement.

• The average discount achieved in Q4 rose to 10.3%.
• 45.3% of listings underwent a published price reduction.
• 82% of transactions completed below asking price.

Prime Central London continues to absorb the largest discounts:

• Mayfair & St James’s: 17.1% average discount
• Knightsbridge & Belgravia: 14.7%

By contrast, competition in outer prime markets is significantly narrowing discounts:

• King’s Cross & Islington: 2.9%
• Battersea, Clapham & Wandsworth: 4.6%

Across London, the £5 million – £10 million segment recorded the steepest average reductions, suggesting motivated sellers at the upper end of the market.

The delayed Autumn Budget created a prolonged period of ‘wait‑and‑see’ behaviour among both buyers and sellers. Against uncertainty over tax policy and potential housing‑related announcements, many prospective movers opted to delay decisions.

As a result:

• Sales volumes in Q4 were 11.8% lower than a year earlier.
• Central London was especially affected, including Pimlico, Westminster & Victoria and Marylebone, Fitzrovia & Soho, areas that rely heavily on confidence‑driven discretionary buyers.

The super prime (£10 million+) transaction volumes slowed sharply.

• Transactions in Q4 were 36% lower than in the prior year.

Despite this, pockets of activity persisted:

• St John’s Wood, Regent’s Park & Primrose Hill was the most active super prime area, followed by:
• Kensington, Notting Hill & Holland Park, Mayfair & St James’s, and Chelsea.

Supply contracted meaningfully in Q4, marking one of the steepest year‑end slowdowns since the pandemic.

• New listings fell 35% quarter‑on‑quarter and 10% year‑on‑year.
• New instruction volumes were 18% below the 10‑year average.
• The number of properties available on the open market declined 15% in Q4.

This tightening of supply will challenge buyers through spring 2026 and may influence pricing dynamics should supply remain constrained.

Prime London enters 2026 with an unusual combination of:

• Weak transaction activity
• Persistent softness in central‑London prices
• A sharp contraction in supply.

While long‑term value is still pronounced in prime central locations – offering attractive opportunities for strategic buyers – outer-prime markets continue to show greater resilience, buoyed by stronger domestic competition.

The supply shortage is likely to be the defining feature of early 2026. Should listings remain constrained, sellers may regain some pricing power, potentially placing upward pressure on values later in the year despite 2025’s subdued performance. For buyers looking to access properties off-market and/or advice on pricing, Coutts could help though our network for specialist buying agents.

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As fiscal clarity emerges post‑budget and confidence stabilises, we expect latent demand – particularly from high‑net‑worth and internationally mobile buyers – to re‑enter the market, paving the way for a more active year.

Our real estate team and bespoke mortgage service could help you find and buy your perfect property – even before it’s on the market. Our service also includes helping you negotiate a good deal.

Speak to your private banker to find out more.

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