London’s prime property market showed signs of recovery in Q2 of 2025, with prices increasing but buyer power remaining strong.
According to the latest data from Coutts, average prices rose by 7.4% compared to the previous quarter, marking a 2.3% increase year-on-year.
This put values just 4.1% below their 2014 peak, signalling a slow but steady rebound.
However, despite the rise in prices, overall sales activity declined.
Transaction volumes were down 15.5% compared to Q2 2024, indicating ongoing caution in the market.
Sellers appeared hesitant, with many adjusting their expectations to meet current buyer demands.
On average, properties sold at an 8.7% discount from their asking price, with 77% of homes selling below their original list price.
Additionally, more than a third of listed homes (38.3%) had already seen price reductions prior to sale.
Discounting varied widely across the capital. Central London areas, traditionally among the most prestigious, offered the deepest cuts.
In Mayfair and St James’s, the average discount reached 17.7%, while properties in Knightsbridge and Belgravia saw discounts of 12.5%.
In contrast, outer prime locations showed much greater price stability.
Battersea, Clapham, and Wandsworth averaged just a 2.1% discount, and Wimbledon, Richmond, Putney, and Barnes saw only 4.5%.
Price growth was strongest in these outer prime areas, particularly in Hammersmith, Chiswick, and the southwest corridor including Richmond and Putney.
These neighbourhoods benefited from rising wages, a resilient job market, and growing optimism around potential interest rate cuts.
While some central locations also posted gains – including Kensington, Notting Hill, and St John’s Wood – they remained far from their historic highs.
Knightsbridge and Belgravia were still over 20% below their peak values, while Chelsea was around 17% down.
