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August 09.2025

2 Minutes Read

Luxury House Prices in London Surge: What This Means for Investors

Elegant Georgian houses on a London street, reflecting luxury house prices in London.

London's Million-Pound Homes Experience a Market Surge

In the latest analysis from Coutts Real Estate, prices for million-pound-plus homes in London surged by 7.4% in the past quarter, showing a year-over-year increase of 2.3%. This recent growth indicates that values are now just 4.1% below their peak levels, representing a robust recovery in the prime property market.

Where Growth is Happening

The rise in values is predominantly seen in outer prime regions like Hammersmith, Chiswick, Wimbledon, Richmond, and Putney. Factors contributing to this growth include stable employment rates and rising wages, combined with a climate of optimism as interest rates are expected to decline soon.

Inner Prime vs. Central Areas

While areas such as Kensington and Notting Hill have reported increasing prices, some central postcodes continue to struggle, with areas like Knightsbridge and Belgravia lagging 20% behind their peak prices. This contrast highlights a significant disparity in market performance across different London neighborhoods.

The Reality of Discounts

Despite the price increases, many buyers are still negotiating reduced rates, with 38.3% of properties in the million-pound-plus segment experiencing price cuts. The average discount stands at 8.7%, escalating to a staggering 19.5% for super prime properties valued at over £10 million. Deals in central areas often reflect deeper cuts, ranging from an average of 17.7% in Mayfair to 12.5% in Knightsbridge.

Market Dynamics and Future Trends

Selling activity showed a decline, with transactions dropping 15.5% year-on-year – the lowest since 2021. In contrast, new listings have increased significantly, 40% higher than the 10-year average, suggesting a potential shift in the market as demand changes. Nevertheless, the luxury segment remains resilient with super prime sales 10% above average, particularly in sought-after locations like Knightsbridge.

Insight and Conclusion

The current landscape indicates a mixed picture in London's luxury property market. Outer prime areas present significant growth opportunities, while central locations offer varying levels of value. Investors and buyers should stay informed, as the evolving market dynamics may influence financial decisions and investment strategies moving forward.

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Luxury House Prices in London Surge: What This Means for Investors

London's Million-Pound Homes Experience a Market Surge

Where Growth is Happening

Inner Prime vs. Central Areas

The Reality of Discounts

Market Dynamics and Future Trends

Insight and Conclusion

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