Residential property prices in prime central London declined 3.7% y-o-y in 2Q2025 as price sensitivity among buyers takes root. The latest quarterly price movement follows a 1.5% q-o-q decrease in the first three months of this year, according to a market report published by Savills on July 2.
As a result, residential prices in prime central London as of 2Q2025 are down 22.4% from their 2014 peak.
While there has not been a flood of new housing stock coming into central London, most properties that are still on the market have remained unsold for longer than usual as buyers bide their time, says Alex Christian, director and co-head of Savills Private Office.
However, some affluent areas in south-west London appear to defy the ongoing price trend, with resilient neighbourhoods such as Clapham, Putney and Wimbledon maintaining stable property values due to a steady mortgage market and stronger holding power.
With families less inclined to move out of the capital city, average prime property values in outer London fell by a marginal 0.5% q-o-q in 2Q2025.
Housing demand is more focused on London’s suburban markets. This, combined with greater economic uncertainty and concern over tax among discretionary buyers, has created a classic buyers’ market, with more stock available to choose from and less competition, says Lucian Cook, head of residential research at Savills.
Price sensitivity among buyers has also extended to prime regional property markets outside London. These markets saw dramatic value increases following the easing of lockdown restrictions during the Covid-19 pandemic, but values have since declined as interest rates have risen. For instance, in the traditional Country House submarket, where properties typically command more than GBP3 million ($5.2 million), average values were down 6.2% on a yearly basis in 2Q2025.
According to Savills, these prime regional markets declined 1.9% q-o-q in 2Q2025 and recorded a yearly decline of 2.7%.
“Recent buyers have been able to secure a prime family house in the South of England with up to six bedrooms for an average of GBP2.4 million. That is on average GBP280,000 less than they could at the market peak in September 2022,” says Cook.
