Central London property prices have crashed and 'nobody wants to talk about it' warns buying agent

Home sellers in central London are facing a reality check that few of them want to accept - their properties may well be worth less than what they paid for them.

While many estate agents continue to talk the market up, data suggests prime London property is struggling.

Several central London boroughs have seen prices fall by more than 20 per cent within the last four years, with one borough seeing its house prices plummet 25 per cent in just two years.

Of the top 10 most challenging postcodes to sell a home in across the country, eight are located within the capital, according to the latest data from TwentyCi.

Its data analysis factored in sold prices compared to original asking prices, how fast homes are selling, how likely a sale is to fall through and how likely a home is to have its asking price reduced.

Currently, central London homes are achieving 96.1 per cent of their original asking price on average which is below the national average of 97 per cent.

That means on a £1million initial asking price, the typical inner London property is selling for £961,000.

Inner London homes are also less likely to sell at all, with only 37 per cent of listed homes going on to complete, compared with 55 per cent nationally.

TwentyCi also found that 39 per cent of listings in the region undergo at least one price reduction compared to 37 per cent across the UK, and the fall-through rate stands at 25.5 per cent, above the national average of 24 per cent.

Each property is taking on average 89 days to sell in London, which is slower than the national average of 84 days.

The situation in certain postcodes paints an even bleaker picture - and in some cases, there appears to be a full blown market crash playing out.

Properties in Marylebone are achieving an average of 88.1 per cent of their original asking price.

This would mean someone first listing for £1 million is typically selling for £881,000.

In Marylebone, 35.5 per cent of homes that go under offer also fall through, according to TwentyCi - far above the UK average of 24 per cent.

In parts of Belgravia, Knightsbridge and Chelsea, it's taking 201 days to sell a home on average - almost two and half times longer than the national average.

Meanwhile, close to half all homes listed in Pimlico undergo at least one price reduction, according to TwentyCi. That compares to 37 per cent of homes across the UK.

It may not come as a surprise that house prices in these areas are also falling, and in some cases plummeting.

In the City of Westminster, average house prices have fallen 25 per cent since they peaked in January 2023 and are still below 2014 prices.

The average home is selling for £920,000, based on latest Land Registry data, down from a high of £1,225,000.

In Kensington and Chelsea, average house prices are down 28.5 per cent since they peaked in October 2021 and still remain below 2014 levels.

The average home is selling for £1,183,000, down from a high £1,653,000.

'There's something strange happening to the top end of the London market but nobody wants to talk about it,' says Henry Pryor, a professional buying agent.

'Some estate agents worry that if they voice it, then it will make it true, but ignoring it just prolongs the agony.

'However, if you're buying or selling you need to hear this. The market isn't as strong as it was.

'What most people aren't being told is that while sellers of £1million plus homes think that it's 2021, but most buyers think it's 2015.

'The froth has come off the market and privately most estate agents will admit it's a buyers market.'

There could be all manner of factors causing prices to fall. Higher interest rates, Brexit, stamp duty and changes to non-dom tax rules causing millionaires to leave the UK.

The proportion of overseas buyers registering with Countrywide group estate agents to buy a home in the UK fell in the first three months of 2025 to the lowest level on record.

Many of the capital's super-rich are looking to get out, according to Jonathan Hopper, chief executive of buying agent, Garrington Property Finders. This is pushing prices down sharply.

'Rising taxation and political uncertainty have led many wealthy UK residents to reassess their presence here, and a rapid recalibration of London's prime property market is underway,' said Hopper.

'Some of those leaving Britain have chosen to sell their London homes, but we're starting to see a strategic shift as others retain their UK property assets and turn to the increasingly attractive lettings market instead.'

David Johnson, managing director of property consultancy INHOUS also says wealthy investors are looking to sell up and move their money elsewhere.

He also thinks that many sellers and estate agents are guilty of putting homes on the market at too high a price.

'Some areas within central London have recently seen an uplift in the number of properties being put up for sale as a number of wealthy investors decided to move on amid new tax regulations and global political as well as economic developments,' says Johnson.

'It is also not uncommon to see properties come onto the market 20 per cent overvalued. This is a combination of vendor expectations and an agent telling the vendor what they want to hear in order to gain control of that property.'

One major issue for the London market is stamp duty, according to Johnson. A home mover buying a £1million property now faces stamp duty costs of £43,750.

For someone buying a second property in London worth £1million, either as a pied-à-terre or investment, they will pay £93,750 in stamp duty, while an overseas buyer will see that rise to £113,750.

'A lot of buyers are no longer purchasing smaller properties in any of these locations as it doesn't make sense to buy a property if they plan on selling within two or three years' time,' adds Johnson.

'Instead, these buyers are choosing larger properties further out that they can stay in for five years or longer.'

Buying agent Henry Pryor thinks it's more simple than just tax and politics. He suggests it is just a case of too many homes for sale and not enough buyers.

Pryor may have a point. The number of homes priced at over £5million coming onto the market in February was up 30 per cent compared to the same month last year, according to the latest data from LonRes.

'It's not because of Liz Truss or Brexit or non-doms fleeing the country,' says Pryor.

'It's not because of interest rates, Ukraine or what's happening in The White House. It's because people will no longer pay whatever it takes.

'Overall stock is up. If you want to buy a big house or flat you have some great homes to choose from, but many buyers are just not sure if they want to pay the ticket price and many are waiting and watching rather than piling in.

'There are exceptions, of course but the days of joining 15 other eager buyers for an open house on a Saturday morning are a memory.

'Well priced properties are still being tied up via 'best and final offers' but I'm finding that many only have two or three bidders rather than 10.'

While prices in Central London appear to be in the doldrums, this could present a window of opportunity for those prepared to be brave and buy the dip, according to Pryor.

'Summer is coming, it will get hotter but the housing market looks like it will remain cool for the time being,' he adds.

'This may be the time to buy the million pound home you've always wanted but not because it's going cheap. It's just that not many other people want it just now.'

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