Sales of luxury London apartments worth more than £5m have plunged 80% since 2023, with new-build transactions suffering an even sharper decline, according to new research.
A study by Beauchamp Estates reveals a significant contraction in prime central London’s high-end apartment market. Sales of newly built flats and penthouses have fallen 87% over the same period.
The agency attributes the downturn to weaker demand, higher construction costs and planning restrictions. Tax changes and the departure of wealthy non-domiciled residents have also affected the market, it says.
Its Luxury Apartment Sales in London report examined transactions above £5m between January 2022 and September 2026.
In 2023, buyers purchased 369 luxury apartments worth a combined £3.8bn. By 2025, transactions had fallen to 204, with a total value of £1.8bn.
During the first nine months of 2026, just 72 apartments changed hands, generating £692.9m.
However, the latest figures cover only three quarters of the year, rather than a full 12 months.
New-build apartment sales hit hardest
New-build transactions have experienced the sharpest decline.
In 2023, buyers purchased 208 newly built apartments worth £2.56bn. That fell to 86 sales in 2025, worth £968.8m.
During the first nine months of 2026, just 28 new-build apartments sold for a combined £322m.
Beauchamp Estates argues that planning constraints, reduced development finance and rising construction costs have restricted supply.
The agency points to an 84% decline in private-sector housing starts across London since 2015.
Construction began on 5,547 private-sector homes last year, compared with 33,782 in 2015.
Meanwhile, the agency says wealthy buyers have increasingly favoured houses over apartments.
During the first half of 2026, buyers completed 24 house purchases above £15m, compared with eight apartment transactions at that price level.
The preference for freehold ownership, private gardens and lower running costs has also affected demand.
Service charges in ultra-prime apartment buildings now average between £18 and £22 per sq ft annually, according to the research.
Prices remain flat despite reduced supply
Despite the sharp decline in transactions, luxury apartment values have shown little movement.
The average achieved price between 2022 and 2026 was £3,038 per sq ft. Meanwhile, the average transaction value remained just below £10m.
Second-hand apartments typically achieved between £2,000 and £2,500 per sq ft.
However, refurbished properties in Mayfair reached £3,600 per sq ft.
At the top end, branded residences and apartments in developments such as One Hyde Park command considerably higher prices.
Properties in buildings associated with luxury hotel operators have achieved between £5,000 and £7,500 per sq ft.
These include The OWO Residences by Raffles and 20 Grosvenor Square, associated with Four Seasons.
Beauchamp Estates says buyers have paid premiums of up to 150% for properties offering extensive facilities, security and hotel-style services.
Mayfair tops luxury apartment rankings
Grosvenor Square in Mayfair recorded the highest total value of luxury apartment transactions among individual London addresses.
Between 2022 and September 2026, the square generated £1.26bn across 97 sales.
The average transaction reached £12.98m, while the highest recorded sale achieved £75m.
Knightsbridge followed with £609.1m across 40 transactions.
Meanwhile, Queensway in Bayswater has emerged as another major luxury apartment market.
The street recorded £531.2m in sales across 52 transactions, supported by developments including The Whiteley and Park Modern.
A penthouse at Park Modern achieved £57m, according to the report.
Across London’s wider neighbourhoods, Kensington recorded the highest number of luxury apartment transactions.
The district registered 257 sales, averaging £7.14m each.
Marylebone and Fitzrovia followed with 239 transactions, while Mayfair recorded 198.
However, Mayfair remained the most expensive district by average price per square foot, at £4,180.
Agency calls for action on development
Jeremy Gee, managing director of Beauchamp Estates, said the shortage of new luxury apartments was affecting both transaction volumes and the wider development market.
He said: “Planning constraints, reduced funding and rising construction costs have hampered viability and led to an 84% drop in supply with new apartment sales falling 87%.”
Gee argued that new developments could also encourage investment in surrounding neighbourhoods.
He cited Chelsea Barracks, Queensway and Grosvenor Square as examples of areas where major residential schemes had attracted further development.
However, the agency’s figures suggest that new supply alone will not resolve the downturn.
Demand has also weakened, while buyers continue to favour houses and remain cautious about the costs associated with luxury leasehold apartments.
Across the full survey period, Beauchamp Estates recorded 1,263 apartment transactions above £5m, worth a combined £12.5bn.
Of those, 714 involved newly built properties, generating £7.4bn. The remaining 549 transactions involved second-hand apartments worth £5.1bn.
