Home sellers in central London are facing a tough reality: many properties may now be worth less than their original purchase price. Despite ongoing optimistic claims from some estate agents, the data paints a different picture for prime London property.
In fact, several boroughs in central London have experienced price drops exceeding 20% over the past four years. One borough, in particular, has seen house prices fall by as much as 25% in just two years.
According to the latest figures from TwentyCi, eight of the ten most difficult postcodes to sell a home in the UK are located in London. This data takes into account factors such as the final sale price compared to the initial asking price, how quickly properties sell, the likelihood of sales falling through, and whether asking prices are reduced.
At present, homes in central London are selling for an average of 96.1% of their original asking price. This is slightly below the national average, which stands at 97%.
For a property initially listed at £1 million, the average sale price in inner London is around £961,000. This shows a noticeable gap between asking prices and what buyers are actually paying.
Properties in inner London are also less likely to complete a sale. Only 37% of listed homes successfully sell, compared with a 55% completion rate across the UK.
Data from TwentyCi reveals that 39% of homes in the region have their prices reduced at least once, which is slightly higher than the UK average of 37%. Meanwhile, the rate of sales falling through is 25.5%, above the national average of 24%.
On average, properties in London take 89 days to sell, which is slower than the UK average of 84 days.
Where in the capital are prices crashing?
The situation in some central London postcodes is even more concerning, with signs of a significant market downturn in certain areas. For example, properties in Marylebone are currently selling for an average of just 88.1% of their original asking price.
To put this into perspective, a home initially listed at £1 million would typically sell for around £881,000. Additionally, Marylebone sees a high rate of sales falling through, with 35.5% of properties under offer failing to complete—well above the national average of 24%.
In areas like Belgravia, Knightsbridge, and Chelsea, the average time to sell a property has stretched to 201 days. This is nearly two and a half times longer than the UK average, highlighting how sluggish the market has become in these prime locations.
Price reductions are also widespread. Nearly half of all homes listed in Pimlico undergo at least one price cut, compared with 37% across the UK, according to data from TwentyCi.
Unsurprisingly, house prices in these areas have dropped significantly, and in some cases sharply. In the City of Westminster, average prices have fallen by 25% since peaking in January 2023, and they remain below levels seen in 2014. The average home now sells for around £920,000, down from a peak of £1,225,000.
Similarly, Kensington and Chelsea have experienced a 28.5% drop in average house prices since their highest point in October 2021. Prices here also remain below those recorded in 2014. The average property sells for £1,183,000, reduced from a previous high of £1,653,000.
Why are central London property prices falling?
There are several reasons why property prices in London might be falling. Higher interest rates, Brexit, stamp duty charges, and changes to non-dom tax rules have led many wealthy individuals to leave the UK.
Data from Countrywide estate agents shows that the number of overseas buyers registering to purchase homes in the UK dropped to its lowest level on record in the first quarter of 2025.
Jonathan Hopper, chief executive of buying agent Garrington Property Finders, explains that many of the capital’s super-rich are moving abroad. This trend is putting downward pressure on prices. He says, “Rising taxes and political uncertainty have caused many wealthy UK residents to reconsider their presence here, triggering a swift adjustment in London’s prime property market.”
Hopper adds that while some are selling their London homes, others are holding onto their properties but shifting focus to the lettings market, which is becoming more appealing.
David Johnson, managing director of property consultancy INHOUS, agrees that many wealthy investors are selling and relocating their funds elsewhere. He also points out that sellers and estate agents are often setting prices too high.
Johnson notes, “Certain areas in central London have seen an increase in properties listed for sale as wealthy investors respond to new tax laws and global economic and political changes. It’s common for homes to be priced around 20% above their true value, driven by vendors’ expectations and agents telling them what they want to hear to secure the listing.”
Stamp duty is a major challenge for the London market. Johnson explains that buying a £1 million home now incurs stamp duty of £43,750. For a second property, whether for investment or as a pied-à-terre, this rises to £93,750, and overseas buyers face £113,750.
He adds, “Many buyers are avoiding smaller homes in these areas as it doesn’t make financial sense if they plan to sell within a few years. Instead, they are opting for larger properties further out that they can keep for five years or more.”
Buying agent Henry Pryor believes the issue is simpler than taxes or politics. He suggests there are just too many homes on the market and not enough buyers.
Pryor’s point is backed by LonRes data showing that homes priced over £5 million listed in February rose by 30% compared to the previous year.
He says, “This isn’t about Brexit, Liz Truss, non-doms leaving, interest rates, or international politics. It’s because buyers won’t pay whatever price is asked. The number of available properties has increased, but many buyers are hesitant and waiting rather than rushing to purchase.”
Pryor notes that while well-priced homes are still selling through ‘best and final offers,’ the number of bidders is much lower than before. “Gone are the days when 15 buyers would compete for a property at an open house. Now, there are often only two or three bidders,” he explains.
Despite the current slump in Central London prices, Pryor believes this could be a chance for those willing to buy during the downturn.
He says, “Summer is coming, and although the market is likely to stay cool, it could be the right time to buy that million-pound home you’ve always wanted—not because it’s cheap, but because fewer people want it right now.”
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