"Whilst prices are high and discounts are low in outer prime markets, the inverse is true for central prime areas, with discounts to be had in some of the capital’s most exclusive areas"
- Katherine O’Shea - Coutts Real Estate
The average price of million-pound homes in London rose by 7.4% in Q2 2025, bringing values 2.3% higher than the same period last year and narrowing the gap to just 4.1% below the market peak.
This growth was most evident in outer prime areas, including Hammersmith & Chiswick and Wimbledon, Richmond, Putney & Barnes. Stability in the job market, wage growth, and expectations of falling interest rates all contributed to the increase. House prices also rose in locations such as Kensington, Notting Hill & Holland Park, and St John’s Wood, Regent’s Park & Primrose Hill.
However, central prime neighbourhoods continued to lag. Property prices in Knightsbridge & Belgravia remain more than 20% below peak levels, while homes in Chelsea are still 17.2% below their previous highs.
Discounts remain widespread despite price growth
Although prices climbed in several parts of the market, discounts remain a common feature of luxury home sales. More than a third of transactions (38.3%) saw the asking price reduced before completion, while 77% of all sales closed at a discount.
The average discount on prime properties now stands at 8.7%. For super prime properties, those priced over £10 million, the average reduction is even steeper at 19.5%.
Central London continues to see the largest price reductions. Mayfair & St James's recorded average discounts of 17.7%, followed by 12.5% in Knightsbridge & Belgravia. Outer prime areas, on the other hand, saw far smaller reductions, 2.1% in Battersea, Clapham & Wandsworth, and 4.5% in Wimbledon, Richmond, Putney & Barnes.
Sales activity remains subdued
Sales volumes were down once again. Transactions declined 15.5% compared to the same period in 2024 and were 9.7% below the 10-year average. By the end of Q2, there were 826 homes under offer across the capital, the lowest figure recorded since 2021, pointing to an ongoing lack of urgency in the market.
The supply of homes for sale, however, has expanded. The number of properties listed on the open market rose 11% year on year, while new instructions in Q2 were 40% above the 10-year average.
Despite broader slowdown trends, super prime sales remained resilient. Transactions in this segment were 10% higher than the 10-year average. Knightsbridge & Belgravia and Mayfair & St James's recorded the most super prime activity during the quarter.
“The market this quarter has once again been a mixed picture,” said Katherine O’Shea, director, Coutts Real Estate. “Whilst prices are high and discounts are low in outer prime markets, the inverse is true for central prime areas, with discounts to be had in some of the capital’s most exclusive areas.
“Navigating this state-of-play, and understanding how best to gauge prices going forward, will be one of the biggest challenges for buyers and sellers in the market throughout the remainder of the year.”
