Coutts London prime property index q2 2025 – opportunities alongside challenges in the capital

As we move into the second half of 2025, London’s prime property market is presenting both opportunities and challenges. Below we examine these latest developments based on our Q2 data, providing insights into pricing, buyer behaviour, discounts, and market dynamics.

In Q2 2025, Prime London property prices increased by 7.4%, resulting in an average price that is now 2.3% higher than the same period last year and just 4.1% below the market peak.

Much of this growth has been driven by outer prime markets, including Hammersmith & Chiswick, and Wimbledon, Richmond, Putney & Barnes, which have shown strong price increases over the last quarter. Job market stability, rising wages and the expectation that interest rates will come down have contributed to the resilience in the market, particularly in the outer prime market. Additionally, areas such as Kensington, Notting Hill & Holland Park, and St John’s Wood, Regent’s Park & Primrose Hill have also recorded meaningful uplifts in average values.

In contrast, significant value for buyers remains in prime central London locations. Prices in Knightsbridge & Belgravia are still more than 20% below their market peak, while prices in Chelsea are 17.2% below their peak.

Despite the upward trend in prices, buyers are still negotiating considerable discounts on prime and super prime real estate. The average discount on prime London property is now 8.7% —a slight decrease from the previous quarter but indicative of the consistent gap between buyer and seller price expectations.

In the latest quarter, 38.3% of sales had seen their published asking price reduced, and 77% of sales were completed at a discount to the asking price. While these figures indicate a modest decline from the previous quarter, they do suggest the gap between buyer and seller expectations may be starting to close.

Central London postcodes, such as Mayfair & St James's, are witnessing the largest average discounts at 17.7%, followed by Knightsbridge & Belgravia at 12.5%. Conversely, competition in outer prime markets is dampening discounts, with average discounts of just 2.1% in Battersea, Clapham & Wandsworth, and 4.5% in Wimbledon, Richmond, Putney & Barnes. Notably, our data reveals that larger discounts are more frequently achieved in higher price brackets.

Sales activity

Transaction volumes continue to be sluggish, with a year-on-year decline of 15.5% and a 9.7% dip compared to the 10-year average. At the end of Q2, there were 826 transactions under offer across London. This figure, which typically represents the end of the spring market’s peak activity, is at its lowest since 2021, further underscoring a market lacking urgency.

With stamp duty currently maxing out at 19% for some buyers, many short and medium-term investors are turning to renting instead. However, those buying in higher price brackets generally tend to have a longer-term view on their property investments, typically at least 10 years.

Super prime market

Despite fiscal challenges affecting the top of the market, super prime sales (£10m+) remain 10% higher than the 10-year average. However, buyers in this segment are negotiating substantial discounts, with the average discount on super prime properties reaching 19.5%. 

Knightsbridge & Belgravia and Mayfair & St James's recorded the highest number of super prime sales in the last quarter.

Market supply

The beginning of 2025 has seen a marked increase in the supply of properties available for sale. The number of properties on the open market has risen by 11% year on year, with new listings in Q2 up 40% compared to the 10-year average. This influx raises questions about the market's ability to absorb this additional supply and its potential impact on pricing moving forward.

Market supply has increased across the UK, not just in London. There are several potential reasons for this, including landlords trying to sell due to upcoming legislative changes such as the Renters’ Rights Bill, higher council tax on second homes and the fact that selling plans were delayed for many due to last year’s election and budget.

Conclusion

There is a nervousness in the market which has had a meaningful impact on transaction volumes across most areas. The disparity between buyer and seller expectations on price has meant the market has fallen into stalemate. Although prices have increased in the second quarter of the year, there is now a significant increase of supply in the second-hand market (non-new builds).

Navigating this, and its potential impact on how best to gauge prices going forward, will be one of the biggest challenges for buyers and sellers in the market throughout the remainder of the year.

Take a look at our postcode selector tool for a detailed look at the London prime property market area-by-area. 

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