Activity has held up better than sentiment might suggest, however.

Confidence has weakened, but deals are still being done

Our latest survey of Savills agents shows the extent to which sentiment has softened. In London, 88% of agents said sellers felt less confident, while 82% reported reduced buyer confidence. In the country market, those figures were 94% and 72% respectively.

That said, there is still momentum among prime home movers. Data from TwentyCI shows that across Q2, net agreed sales were within 95% of last year’s levels for the whole market. For homes above £1 million, activity was at 94% of last year’s level, while the £2 million-plus market was at 91%.

That points to a market where buyers are still engaged, but only where sellers are aligned on realistic pricing. 

Prime central London remains under pressure

Prime central London has been particularly exposed to increased uncertainty. A quarterly fall of 1.7% (Q2 2026) mirrors the pace of adjustment seen in the run-up to last year’s Budget, with values now more than a quarter below their 2014 peak.

The tax environment also continues to weigh on international demand, with nearly half of Savills agents reporting that overseas buyer demand in London has reduced.

However, performance varies by location and property type.

In needs-based family house markets such as Notting Hill, annual price falls have remained below 4%, compared with falls of around 7% in more fringe, central London neighbourhoods such as Westminster and Pimlico.

Domestic London markets are proving more resilient

Outer prime London has continued to outperform. Here, prices fell by 1.1% overall in the quarter, while houses were slightly more resilient, recording a fall of only 0.7% compared with a weaker performance for flats.

Values across the west and south-west of London have held up more strongly over the past year, with values down by just 1.2% and 1.5% respectively. Best-in-class properties in areas such as Barnes, Clapham, Hackney and Victoria Park still command a premium, particularly where homes rarely come to market.

Urban regional markets are holding up best

Across the prime regional markets, values fell by 1.7% in Q2 and by 3.8% year on year, with debt-driven commuter belt markets and the top end of the country house market among the most affected.

Prime country houses recorded a 2.7% fall over the past three months, following two quarters of relative stability.

By contrast, needs-based urban markets have generally held up better than their rural surrounds. Cities and towns with strong connectivity, good schools and established local demand – including Edinburgh and Cheltenham – have been among the more resilient performers, supported by lifestyle, schooling and transport needs rather than discretionary moves.

But, transactions are taking longer. Savills agents report that deals are taking more time to progress, with a particular delay between offer accepted and exchange.

This lack of urgency is the polar opposite of the pandemic-era mini boom, when strong competition drove rapid decision-making. Today’s buyers are more selective, more price sensitive and more willing to wait. Demand remains, but buyers are taking a more considered approach.

What next for the prime markets?

Domestic political uncertainty is likely to remain a constraint. Until buyers have greater clarity on the policy and tax environment, caution is likely to persist.

As a result, the prime market is expected to remain price sensitive over the remainder of the year, with recovery likely to be selective rather than uniform.

For now, the strongest markets are likely to be those underpinned by needs-based demand, scarcity of stock and realistic pricing. In other words, even in a strong buyer’s market, the fundamentals still matter.

Further information

Contact Frances McDonald