![\"Skyline](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/04\/property-market.jpg\")
\t\tTownhouses in London’s Kensington Gardens, one of the UK’s most expensive areas.\t<\/p>\n\t\t\tThursday 16 April 2026 9:48 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tThursday 16 April 2026 10:17 am\n\t<\/p>\n
\t\tTownhouses in London’s Kensington Gardens, one of the UK’s most expensive areas.\t<\/p>\n
It\u2019s been almost three years since Emma first put her Kensington home on the market.<\/p>\n
With an initial asking price of just over \u00a34m, she turned down a number of early low-ball offers before accepting one only slightly below what she\u2019d wanted. But after months of dithering, the buyer pulled out at the last minute.<\/p>\n
Emma, who spoke to us using a pseudonym because the sale is private, then tried again and put the property back on the market at the beginning of the year.<\/p>\n
\u201cThe viewings were quite slow, very much dribs and drabs,\u201d she says.<\/p>\n
\u201cThen I happened to bump into our previous agent in the street. She said look, I\u2019m going to be honest with you. If you want to sell the house, you\u2019ve got to really move the price.<\/p>\n
\u201cThe market\u2019s so bad, if you want this to move, you have to reduce the price.\u201d<\/p>\n
After some umming and ahing, Emma capitulated and cut the offer price by more than \u00a3500,000, a drop of around an eighth. The property has still not sold, but interest has at least started to pick up since the discount.<\/p>\n
\u201cThe house has been described as \u2018always the bridesmaid and never the bride\u2019, because we\u2019ve had so many near misses,\u201d she says.<\/p>\n
\u201cWe\u2019ve had quite bad luck in that respect and it can be really soul-destroying. We love the house so much but we are really keen to just get on now.\u201d<\/p>\n
Emma\u2019s struggles are far from unique. London\u2019s luxury property market has taken the biggest hit in a decade as transactions and values fall.\u00a0<\/p>\n
![\"Kensington](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/04\/kensington_6c46ca.jpg\")
Biggest drop in luxury house sales<\/p>\n
The number of sales of prime properties in the capital fell by 37 per cent year-on-year \u2013 the biggest drop since 2015 \u2013 a City AM investigation has revealed.\u00a0<\/p>\n
The collapse<\/a> of Harrods\u2019 luxury property arm last week dragged London\u2019s prime property market to a new low, as experts say taxes, poor-quality supply and the flight of non-doms are combining to batter the capital\u2019s desirability for the world\u2019s elite.<\/p>\n Using Land Registry data, City AM has analysed more than 1,000 transactions from the past decade, spanning more than 100 of the capital\u2019s most-sought after residential streets.\u00a0<\/p>\n While London\u2019s prime property market reached a high point in 2021, with 156 sales across the streets surveyed, activity plummeted to only 84 transactions last year, the lowest since 2017.\u00a0<\/p>\n This marks the biggest decline in activity in the capital\u2019s luxury house market in a decade, nearly triple the size of the next-largest decline (13 per cent) coming in 2016.\u00a0<\/p>\n The value of these transactions has stagnated. The best year for sale values came in 2016, when the average price of the sales analysed by City AM stood at \u00a39.4m.\u00a0<\/p>\n The average price of transactions last year edged up slightly from the year before \u2013 up from \u00a38.6m to \u00a38.7m \u2013 but stayed far below the rate of inflation, which by now should have put the average transaction at over \u00a310m.<\/p>\n Stuart Bailey, head of prime central London sales at property experts Knight Frank, told City AM the luxury property market is suffering from a huge decline in top-quality stock.<\/p>\n \u201cIf it\u2019s not the best of the best, or it needs work, or it needs doing up a bit its [value is] going to get knocked so that type of property that it\u2019s in the middle is in no man\u2019s land,\u201d Bailey said.<\/p>\n While the best quality prime homes are still being sold for huge sums, \u201cit\u2019s the medium stuff that\u2019s dragging the market down,\u201d he said.<\/p>\n Mid-tier stock builds up and slows market<\/p>\n Following the collapse<\/a> of shadow lender MFS, the London market is set to be flooded with hundreds of luxury properties in prime locations like Kensington and Mayfair.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tHouse prices rise as property market builds momentum<\/a><\/p>\n But prime property experts told<\/a> City AM last month that these properties \u2013 unless they are of top quality \u2013 could \u201cadd to the pile\u201d of undesirable stock and further slow the market.<\/p>\n The market\u2019s \u201cflight to quality,\u201d Bailey said, has been caused by \u201cnegativity around successive governments\u2019 approaches to self-generated and entrepreneurial wealth\u201d.<\/p>\n While some buyers are opting to move to different markets to find better-quality prime stock, potential sellers can afford to rent out their homes while they wait for more favourable selling conditions.<\/p>\n City AM\u2019s analysis revealed that a number of prime properties were sold for discounts last year, suggesting that some sellers are opting to take losses rather than keep their houses on the market for longer.<\/p>\n One house on Princess Road, Camden, sold for \u00a33.5m last year having been bought for \u00a33.4m in 2019, marking only a \u00a3100k profit over six years, meaning the seller made a significant loss if adjusting for inflation.<\/p>\n Tor Gardens, in leafy Kensington and Chelsea, features a house which was bought for \u00a317.5m in 2021 and sold for the same amount early last year, again marking a significant inflation-adjusted loss.<\/p>\n The trend of transactions throughout 2025 reveals a stark drop off towards the end of the year, when sales stalled from a May peak to reach zero in December.\u00a0<\/p>\n Months of speculation around the November Budget last year had a devastating effect on the UK\u2019s property market, as sellers and buyers were spooked out of transactions by rumours of radical reforms to property tax.<\/p>\n The intense speculation weighed particularly heavily on London\u2019s property market, with house prices in the capital falling<\/a> by two per cent year-on-year in December.<\/p>\n Budget speculation slowed sales<\/p>\n City AM\u2019s findings indicate that transactions slowed well in advance of the Budget, falling by more than half between July and August, before failing to recover for the rest of the year.<\/p>\n Sean Williams, associate director of Hamptons estate agents\u2019 Pimlico branch, told City AM\u00a0 London\u2019s prime property market has faced growing pressures since 2015.<\/p>\n Reacting to City AM\u2019s findings he said: \u201cBrexit triggered a significant withdrawal of European buyers from the capital, and subsequent shocks \u2013 including the pandemic, rising inflation and the sharp increase in interest rates from 2022 onwards \u2014 have further weighed on confidence.\u201d<\/p>\n Property experts have also pointed to the end of the non-dom tax regime as a factor in the falling demand for luxury housing in London.\u00a0<\/p>\n The non-dom tax status had allowed UK residents whose primary home was outside of the country to only pay tax on money made within the UK, but was scrapped at the 2024 Budget.<\/p>\n Last week, estate agents at upmarket property advisors Property Vision told City AM the end to the tax regime likely played<\/a> a \u201cmajor part\u201d in the collapse of Harrods Estates, the property arm of London\u2019s best-known department store.<\/p>\n