London’s property market shows widening divide as prime central prices fall and suburban demand strengthens

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1. https://www.standard.co.uk/business/money/zoopla-south-wales-london-north-west-england-bolton-b1238588.html - Please view link - unable to able to access data
2. https://www.ft.com/content/076c40fa-f090-4063-b6d7-550dbb4b40cb - UK families are capitalising on falling prices in London’s luxury housing market as international demand wanes due to new tax policies targeting non-domiciled residents. These changes, including a cap on tax relief for overseas income and the introduction of inheritance tax on worldwide assets, have driven many wealthy international buyers away. Traditionally dominant in the market for £5 million-plus homes, these absent buyers have reduced competition and opened up opportunities in exclusive areas like Belgravia, Kensington, and Knightsbridge. Estate agents report that domestic families from outer London, previously priced out, are now purchasing prime properties at significantly reduced rates—sometimes below £2,000 per square foot. Price cuts averaging 5% and properties lingering 50% longer on the market have further empowered local buyers. Data from Knight Frank shows a 7% drop in prime property sales and a 13% decrease in new buyer registrations compared to the previous year. Overall, this shift marks a significant rebalancing in London’s prime housing market, with domestic buyers seizing the chance to move into prestigious postcodes that were once out of reach.
3. https://www.benhams.com/press-release/london-property-market/prime-london-buyer-demand-falls-in-q1/ - The latest Prime London Demand Index by London lettings and estate agent, Benham and Reeves, reveals that buyer demand for prime property across London’s most prestigious neighbourhoods fell by -3.9% during the first three months of the year when compared to Q4 2024. The Prime London Demand Index monitors demand for London’s most expensive properties based on the level of market activity seen between the £2m to £10m threshold and the super prime market of £10m+. Demand is based on the proportion of all homes listed for sale across the prime market that have already been sold subject to contract. In the prime market (£2m to £10m), demand sat at 15.8%, marking a -3.9% reduction on the previous quarter. Richmond was the most in demand area of the prime London market in Q1 where 38.9% of all homes priced at £2m or above had found a buyer. Chiswick saw the largest increase in demand on a quarterly basis, up 5.1% versus Q4 2024. Clapham saw the largest quarterly decline at 45.8%. Across London’s super prime market (£10m+), demand for London’s most luxury homes sat at just 3.1% in Q1 2025, having declined by -1.1% versus Q4 2024. Wimbledon proved to be the most in demand area of the super prime market, where 33.3% of all homes listed at £10m or above had secured a buyer. Victoria saw the largest quarterly uplift in buyer demand for super prime London properties, up 5.6% versus Q4 2024, with Chelsea also seeing a strong increase of 3.2%.
4. https://www.ft.com/content/4ca6e9c1-f58a-4bb6-b031-b28d6a5fff96 - In recent times, London's super-prime property market has seen significant price reductions due to various market pressures. Buyers have gained substantial power in negotiations, reminiscent of the conditions post-2008 financial crisis. High borrowing costs and an inflationary budget have contributed to this shift. Additionally, the new Labour government's removal of tax perks for non-domiciled residents has further shrunk the potential buyer pool, causing some wealthy homeowners to sell their prime properties. High borrowing costs exacerbated by global economic policies are predicted to persist, leading sellers to cut prices to close deals. Despite this, luxury property sales remain dynamic, with many wealthy buyers still investing, particularly those from the US and Middle East who are not affected by non-dom rules. The current supply of unsold new homes in central London is also high, further encouraging price reductions. Some affluent individuals are opting to relocate or reconsider purchases, whilst others remain confident in their investments.
5. https://www.chestertons.co.uk/en-gb/news/london-market-insight/buyer-confidence-growing - Growing confidence in the property market and lower mortgage costs led to a 21% increase in the number of house hunters submitting offers for properties, according to our January data. 17% more properties were put onto the market for sale and 7% more owners have requested market appraisals, signalling that more people are now ready to start or resume their plans to move home. Head of Sales, Matt Thompson, says: “The boost in buyer activity is exactly what many sellers have been waiting for. Buyers have become increasingly confident since December, when interest rates were held at 5.25% and mortgage rates started to come down. This sentiment carried through to January and with more properties now on the market, we expect to see increasing numbers of buyers, additionally driven by pent-up demand from those that did not feel comfortable moving forward with their search last year. “We are seeing all types of buyers now entering the market, including first-time buyers, young couples joining forces to achieve a joint upgrade and people that live outside of the capital and require a pied-à-terre to avoid lengthy daily commutes.”
6. https://www.ft.com/content/82ae9a48-3a84-433f-97ac-056bc8f09426 - Mayfair, London's iconic district known from the Netflix series "Bridgerton," is undergoing extensive revitalisation. Originally developed in the 18th century, it faced a decline in the post-war era. However, the past decade has seen a resurgence, with luxury residential developments like No 1 Grosvenor Square and No 20 Grosvenor Square completed recently. The American Embassy's relocation and the upcoming renovation of Grosvenor Square gardens by 2027 are key milestones. Mount Street is now a hub for luxury brands and fine dining, while the Reuben Brothers are redeveloping the Piccadilly Estate, including a new hotel at Cambridge House. The area offers ultra-prime properties and caters to wealthy international buyers, maintaining high demand despite limited supply. Future developments include significant projects like 1 Mayfair, expected to fuel further price growth.
7. https://www.knightfrank.co.uk/research/article/2025/6/prime-central-london-sellers-cut-prices-to-attract-buyers - The new rules explain why the number of sales in prime London property markets in the six months to May fell 7% versus the previous year. The number of new prospective buyers registering fell by 13% over the same period, Knight Frank data also shows. Average prices in prime central London declined 2.2% in the year to May, which was the steepest annual drop since last August. A quarterly price fall of 1.4% was the widest in almost five years. In prime outer London, where a higher proportion of demand is driven by needs-based and domestic buyers, average prices rose by 1.1% in the 12 months to May. A stamp duty hike in April has kept demand even further in check over the last two months. The second home surcharge rose to 5% from 3%, which will take some time to digest, as we analyse here. Against this tougher backdrop, which meant we recently revised down our 2025 price forecast for PCL, sellers are responding by cutting asking prices. “The bigger picture looms large,” said Stuart Bailey, head of prime central London sales at Knight Frank. “Serious sellers, looking to sell in the next year, are cutting their asking prices to attract buyers, whose confidence lies just below the surface. Where a property has been listed for six to 12 months, double-digit reductions mean they are selling ... Smart buyers have spotted there is value now while the competition is less intense, and the next Budget is still some months away.