Buyer demand for prime London homes resilient

Fiona Lam

/ EdgeProp Singapore

January 6, 2026 3:37 PM SGT

fiona.lam@edgeprop.sg

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Interest in high-value residences in London appears to hold firm, with the strongest performance coming from lifestyle-led neighbourhoods. (Photo: Shutterstock)

Ahead of a looming “mansion tax” on high-value homes in the UK, buyer demand for properties in London’s most prestigious neighbourhoods during 4Q2025 inched up in the prime segment while falling marginally in the super-prime segment.

Much of the quarter’s market activity was driven by areas including Chiswick, Islington, Putney and Highgate, according to the Prime London Demand Index by Benham and Reeves, a London-based letting and sales agency.

Taking effect in 2028, the new High Value Council Tax Surcharge, dubbed the “mansion tax”, will apply to England properties valued at GBP2 million ($3.47 million) and above. Owners of prime London residences will thus face a larger recurring property tax bill, having to pay the existing council tax and the new annual surcharge once it is rolled out.

That said, buyers in London’s prime market remain “prepared to act on the right property at the right price” and interest appears to be holding firm despite the upcoming “mansion tax”, notes Marc von Grundherr, director, Benham and Reeves.

In the prime market, defined as properties valued at GBP2 million to GBP10 million, some 13.2% of all homes listed for sale were sold, subject to contract, in the final quarter of 2025, according to Benham and Reeves data.

This is up by 1.2% from 3Q2025, though down by 1.3% as compared to 4Q2024.

The Chiswick neighbourhood saw the highest demand for prime London properties, with 43.3% of all homes listed between GBP2 million and GBP10 million securing a buyer, followed by Islington (42.4%), Putney (42.2%), Wandsworth (39.6%) and Barnes (36.6%).

In terms of quarterly momentum, Chiswick also recorded the biggest growth in prime homebuyer demand, with an 11.4% increase. Other areas posting improvements included Regent’s Park (+11.0%) and Islington (+6.6%).

On the other hand, the sharpest quarterly declines in sales activity of prime homes were seen in Battersea (-7.6%), Clapham (-5.3%) and Canary Wharf (-4.2%).

As for the super-prime market, defined as properties priced at GBP10 million or above, demand softened slightly, with just 3.3% of listed homes sold during the quarter. This is down 0.7% from 3Q2025 and also down 0.9% y-o-y.

Highgate was the most in-demand area for super-prime homes in London, with 16.7% of such properties securing a buyer, followed by Marylebone (8.7%), Regent’s Park (8.3%), Hampstead (6.3%) and Kensington (4.8%).

Benham and Reeves’ von Grundherr says that the strongest performance continued to come from lifestyle-led neighbourhoods, particularly in southwest London, where buyers can secure more space without compromising on connectivity, schooling or amenities. “This is helping to keep activity moving even while headline policy risk remains,” he adds.

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Buyer demand for prime London homes resilient

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