New research from Savills suggests that the prime property market in London continues to face significant challenges, with values in Prime Central London (PCL) now sitting more than 25% below their 2014 peak.
The latest market update shows that house prices across many of London’s most desirable neighbourhoods have continued to decline as economic uncertainty, political developments and global events weigh heavily on buyer confidence.
According to Savills, prices across Prime Central London fell by 1.7% during the second quarter of 2026, matching the pace of declines seen before last year’s Autumn Budget. Overall, values have now dropped 26.3% from their highest point more than a decade ago.
The agency believes the market has been affected by a combination of domestic political uncertainty and ongoing geopolitical tensions, both of which have encouraged buyers to adopt a more cautious approach.
Frances McDonald, Director of Residential Research at Savills, said confidence among both buyers and sellers has continued to soften. Although the market snapshot was compiled before recent political developments, wider uncertainty both in the UK and internationally had already begun influencing purchasing decisions.
As buyers became more cautious with their budgets, sellers also started adjusting their asking prices to reflect changing market conditions. Savills believes this growing alignment between buyer expectations and seller pricing has helped maintain transaction levels, despite demand becoming more limited.
The agency also highlighted the continuing impact of the UK’s tax environment, particularly on overseas purchasers. Almost half of the agents surveyed reported that international demand in London had weakened over recent months.
Not all areas of Prime Central London have performed equally. Some neighbourhoods have proved more resilient than others, particularly locations where demand is supported by families looking to live close to schools and transport links.
For example, Notting Hill has experienced smaller annual price reductions of less than 4%, reflecting continued demand for larger family homes.
By comparison, areas such as Westminster and Pimlico, which Savills describes as fringe Prime Central London locations, have seen much steeper annual price falls of around 7%.
Conditions have been slightly more stable outside the very centre of London. Across the wider prime London market, prices fell by 1.1% during the second quarter, with detached and family houses performing better than flats.
Savills noted that areas in West London and South West London have remained relatively resilient over the past year, despite recording modest annual price declines.
Beyond the capital, prime regional housing markets have also experienced weaker conditions. Average values across these locations fell 1.7% during the second quarter and were 3.8% lower than a year earlier.
The largest declines have been recorded in commuter towns and high-value country house markets, where buyers often have greater flexibility over whether and when to move.
In contrast, prime urban locations outside London have generally held up better, supported by buyers purchasing out of necessity rather than choice. Access to employment, transport connections and high-performing schools continues to underpin demand in these areas.
Savills also found that property transactions are taking noticeably longer to complete. Almost every agent surveyed reported extended timescales between an offer being accepted and contracts being exchanged.
The agency believes this reflects the more cautious mood currently dominating the market. Unlike the fast-moving conditions seen during the housing boom a few years ago, buyers are now taking considerably more time before committing to a purchase.
Looking ahead, Savills expects the prime housing market to remain highly price-sensitive for the rest of the year. While easing mortgage rates and improving geopolitical conditions could provide some support, ongoing political uncertainty in the UK is likely to continue influencing buyer confidence and pricing across the premium property sector.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property