Knight Frank has published its latest data on the prime London sales and lettings property markets and the firm reports that average prices in Prime Central London (PCL) have fallen by 23% since their last peak in mid-2015 due to a succession of tax increases and political uncertainty.
Average property prices in PCL fell 3.3% in the year to July 2026, which marked the 39th consecutive month of annual declines. Prices rose modestly over the two years to April 2023, but that followed a 59-month period of declines that ran from June 2016.
However, the cumulative inflation, using UK CPI (Consumer Price Index) data, amounts to 42% between mid-2015 and mid-2026, which means that a property bought in PCL in mid-2015 for £1m should now be worth £1.42m, but it is actually worth £770,000 today, so when adjusted for inflation, property prices are now almost 46% cheaper than they were 11 years ago.
Tom Bill, head of UK residential research at Knight Frank, said: “The prime London property market is having a better summer than it did in 2025, but that’s not a particularly high bar.
“The number of transactions was 14% higher across the capital in the three months to July, while the rise was 3% in prime central London (PCL). Activity was subdued last year after the introduction of Donald Trump’s trade tariffs, the ending of non dom status and speculation around property taxation in the autumn Budget. There is still speculation ahead of October’s Budget, but it has been more muted this year, particularly after new Prime Minister Andy Burnham ruled out a land value tax.
“The new government is still caught between a bond market that won’t permit a spending spree, Labour backbenchers who won’t sanction meaningful spending cuts, and a Labour manifesto that has ruled out income tax, VAT or national insurance rises.”
Bill added that compared to the five-year average, property exchanges are down 6% in London and 15% in PCL. However, that comparison is distorted by a series of stamp duty cliff edges during and after the pandemic as well as the sharp re-pricing of mortgage rates that began in 2022, which means that accurately gauging the current strength of the market is not straightforward.
Buyers are also adjusting their priorities, according to Stuart Bailey, head of prime central London sales at Knight Frank, who said that refurbishment projects are growing in popularity. “Exceptional properties are in short supply which means buyers who were previously unwilling to consider refurbishment projects are doing so to ensure they get what they want,” he said. “Many buyers at the top end of the market can spend one or two years looking for their ideal home, so even if doesn’t exist right now, the opportunity to create it does.”
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And everyday more are reduced, leasehold are plummeting well done Labour.