Analysts have observed a sharp decline in property prices over the past year. In some cases, property prices in prime London have fallen by up to 60%, a huge decline considering prime London’s reputation as an international investment hub, one undergirded by legal transparency, cultural prestige, and close proximity to the global economy. It has engendered concerns that prime London is failing to attract domestic and international investment.
Price Decline
Jefferies London, analysing sold price records from the Land Registry, has looked at six of London’s most contested locations for high-end property in order to assess performance. The data was clear: all six areas have seen significant reductions in property value.
The worst affected area was Mayfair, an area which saw a 60% decline in average property prices to £1.5m compared to the previous year. Mayfair has one of the highest concentrations of high-value properties across London, with 93% of new listings located in Mayfair between April and May being priced above £1m.
Other areas have followed similar trajectories in terms of property price decline compared to the previous year: Kensington by –21%, Hamstead by –23%, Westminster by –28%, Belgravia by –44%, and Chelsea by 47%.
Contextualising the data, Damien Jefferies, founder of Jefferies, said: ‘In a market that operates very much on a quality over quantity basis, a single transaction can dramatically change the picture. For example, as recently as 2023 we saw notable sales to the tune of £21.5m in Kensington Palace Gardens, £20.4m in Queen Anne’s Gate and £12m on Park Lane, all of which would have a significant impact on overall market values.’
Yet, since April 2025, the market has moved much more slowly than a year ago, with some estimates suggesting that property activity has declined by up to 44%. Even prior to April, the month when stamp duty thresholds were lowered, the volume of prime London property activity declined by 26.2% compared to April 2024. Prime London property prices have also declined to 2.9% over the same period.
As such, the data underscores that prime London has suffered from both quality and quantity issues. For while the new listings continue to wield top prices in prime London areas, there has been less market incentive to acquire these properties, which is reflected in the decline in both average property prices and volume of sales.
For these reasons, Jefferies concluded: ‘As it stands, we’re simply not seeing these big ticket purchases in the current market and, whilst properties are transacting, they are doing so at the lower tiers of the market.’
Causal Factors
Several factors can be highlighted in relation to the decline in prime London property prices. One immediate cause is the lowered stamp duty thresholds starting in April. For example, example, an overseas investor will pay 19% in stamp duty on a second property in the UK. For a property valued at £25m, correspondingly, an overseas investor is liable to pay £4.6m in stamp duty. This additional cost has significantly raised the expenditure for the average international investor.
Another pertinent factor is the reforms around non-dom laws, especially in relation to inheritance and tax regulation. With approximately 11,000 non-domiciled leaving the country over the past year, there has been less interest in acquiring property in prime London areas.
As the Adam Smith Institute warns, the mass exit of non-domiciled residents could cost the UK economy up to £111b by 2035. This will invariably drain further market activity and investment when it comes to non-domiciled residents participating in the prime London property market.
These two factors have deterred investment in prime London. Toby Downes, a buyer advisor for Haringtons, said: ‘That’s why we haven’t seen a flood of top-end homes hit the market. These aren’t fire sales — they’re strategic pauses. If the rules are softened, we could see those owners quietly re-enter the fold. Some departures may be permanent, but for many, the door is still open.’
Prime London Activity
At present, the overall picture of the prime London market is lacklustre. Market metrics have dipped across the board, yet the latter half of the year could see a noticeable uptick, particularly when observing the increased numbers of new listings valued over £1m.
Marc von Grundherr, director of Benham and Reeves, said: ‘The high-end London market may have been more muted of late with respect to the rate of property price appreciation being seen. As this year progresses and this initial activity translates into completed sales, we should see a far more stable outlook with respect to high-end London house price performance.’
Translating these new listings into sales is the crux to driving success in prime London; it is the goal to which prime London will be striding to achieve.
