Despite an encouraging start to 2026, £5 million-plus activity across London slowed over Q1 2026. This part of the market showed resilience in January, as sales were down by just -7% on last year. However, the conflict in the Middle East brought a renewed sense of caution to a part of the market which is typically more sensitive to economic and geopolitical uncertainty. As a result, transactions fell more sharply over the remainder of the quarter.

There were 68 transactions above £5 million in Q1 2026, -35% fewer than the same quarter last year and -33% less than Q1 2024. In the more discretionary market above £10 million, where buyers remain more cautious, there were just 16 transactions in the first three months of the year, down -54% on the same period in 2025.

The total amount spent on £5 million-plus homes also fell compared to previous years, a total of £645 million was spent across the capital during the first quarter. This is a -42% decrease on the £1.12 billion spent in the same quarter last year, representing the lowest spend at this part of the market since 2020.

Whilst geopolitical uncertainty provides some motivation for relocations to London, the underlying tax environment remains a barrier to stronger demand and price growth. However, we have seen some moves diverted to the super prime rental market, as the globally wealthy seek a short-term base in London without the commitment of buying.

Stability in London’s prime postcodes

Demand remains most prominent across London’s traditional prime central London postcodes. Over Q1 2026, 15% of all £5 million-plus sales took place in Belgravia, emphasising its ongoing appeal to buyers and resilience in the current market. This was followed by Kensington (12%) and Mayfair (10%), which both retained similar proportions to 2025.

Although there has been a slowdown in transactional activity over Q1, there remains evidence of demand, as buyers look to London for its relative stability. With a flurry of big ticket sales so far in Q2, the backdrop of market turbulence has not deterred buyers who are keen to take advantage of the value on offer. Furthermore, with ongoing stock shortages, best-in-class properties remain highly favoured and in demand to committed buyers.

OUTLOOK

Looking ahead, we expect overall demand to remain subdued as buyers continue to exercise caution, as a result of the ongoing conflict in the Middle East and renewed domestic political uncertainty. As such, the market is likely to remain price sensitive, but given where values currently sit we aren’t expecting any further severe price falls across prime central London.

Over the longer term, an improving economic outlook and continued global wealth generation mean we expect price growth to return from 2028 onwards. However, we are forecasting a gradual recovery in values, given the underlying tax environment.

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