For the ultra-prime segment of London – what the industry terms “Prime Central London” (areas such as Kensington, Chelsea, St John’s Wood, Regents Park) – the outlook remains cautious but gradually improving.
Research by Savills shows that although this segment has under-performed compared with some regional UK markets, there is a modest revival on the horizon. For example, one report predicts price growth of around 1% in 2026, 3.5% in 2027 and 5% in 2028 for prime central London.
Key data points worth noting:
In Q2 2025 the sales volumes in prime central London fell but average prices were slightly higher than the previous quarter.
Structural headwinds remain: affordability constraints, high price-to-earnings ratios, and changes in the tax regime for overseas buyers and second homes.
At the same time, improved mortgage rate expectations and the return of international buyers (especially once travel restrictions ease) may help boost demand.
What this means for you
If you’re investing in prime central London, plan for steady but modest returns, not rapid growth.
Focus on properties that have strong appeal (location, building quality, unique features) rather than speculating purely on capital uplift.
Consider rental yield and holding period – with slower capital growth, the rental side may become relatively more important.
Monitor tax and regulatory changes carefully: these can shift buyer behaviour and impact pricing dynamics.
Final Thought
The prime central London market is entering a more mature phase. The days of double-digit annual growth are behind us, but for long-term minded buyers there remains value—especially if one takes a selective approach and focuses on asset quality and location.