London Luxury Property Market Report: Q1 2026 Outlook

The State of London's Luxury Property Market

The London luxury property market enters 2026 with cautious optimism. After several years of adjustment following the stamp duty changes, Brexit uncertainty, and pandemic disruption, prime central London is showing clear signs of renewed momentum. Transaction volumes in the £2 million-plus bracket increased through 2025, international buyer activity has strengthened on the back of a competitive pound, and new development launches are being met with genuine demand rather than polite indifference. Here is our assessment of where the market stands and where it is heading.

Price Trends Across Prime London

Prime central London prices have stabilised after the corrections of 2015-2020 and are now showing modest but consistent growth. Across the core prime postcodes — Mayfair, Belgravia, Knightsbridge, Chelsea, and Kensington — average values are approximately 15-20% below their 2014 peak in nominal terms and further below in real (inflation-adjusted) terms. This means there is still value to be found for buyers entering the market now, particularly compared to the frothy conditions of a decade ago.

The picture varies by sub-market. Super-prime properties above £10 million have been the strongest performers, driven by a small number of wealthy international buyers for whom London remains the preferred global base. The £2-5 million bracket has seen the most transaction activity, with domestic upsizers and international families competing for the best family homes and lateral apartments. The £1-2 million segment — the entry point for prime London — has been more price-sensitive, with buyers showing greater willingness to negotiate and longer decision timelines.

International Buyer Activity

International buyers are returning to London in significant numbers. The relative weakness of sterling against the dollar, dirham, and several Asian currencies has made London property 15-25% cheaper for many international purchasers compared to five years ago. Middle Eastern buyers remain the most active in the super-prime segment, particularly in Mayfair and Knightsbridge. Asian buyers — particularly from Singapore, Hong Kong, and mainland China — are active in the new build sector, especially in developments with strong amenity packages. American buyers have increased their activity notably, drawn by both the currency advantage and London's lifestyle appeal relative to other global cities.

New Build Developments

The new build pipeline in London remains robust, though developers are being more selective about launch timing and pricing. The oversupply concerns that characterised the 2018-2020 period have largely abated as slower-selling schemes have been absorbed and planning permissions for new projects have tightened. The best new launches — in locations like Chelsea, Battersea, and select parts of Nine Elms — are achieving strong sales rates, particularly for one and two-bedroom apartments aimed at the investor and pied-à-terre market.

Our Outlook for 2026

We expect 2026 to be a year of steady, unspectacular growth in prime London. Prices should increase by 3-5% across most prime postcodes, with stronger performance in areas benefiting from infrastructure improvements and weaker performance in segments with oversupply. The key risks are macroeconomic: a global recession would dampen international demand, and any significant increase in UK interest rates would affect the domestic buyer market. The key positive driver is sterling: if the pound remains competitive, international buyer demand will continue to support values across prime London.

For buyers, the message is encouraging. London luxury property is well below its peak in real terms, international demand is strengthening, and the market fundamentals — limited supply, strong rental demand, rule of law, global connectivity — remain firmly intact. This is a market that rewards patient, well-informed buyers. Explore our area guides for neighbourhood-specific data, and browse our current property listings to see what is available across prime London.

Frequently Asked Questions

Are London luxury property prices rising in 2026?

Yes, modestly. Prime central London prices are showing 3-5% annual growth after several years of adjustment. Super-prime properties above £10 million are performing strongest, while the £1-2 million entry-level prime segment remains more price-sensitive. Overall, the market is in a healthy recovery phase.

Is now a good time to buy luxury property in London?

Conditions are favourable for buyers. Prime London prices remain 15-20% below their 2014 peak in nominal terms, sterling is competitive for international buyers, and transaction volumes are increasing. For long-term purchasers with a 5-10 year horizon, current pricing represents good value relative to the market cycle.