London Market Split: Billionaires Snap Up Mansions While Apartment Prices Fall

The London property market is currently exhibiting two opposing trends. At the top end, billionaires from the United States and the Gulf states have returned to purchasing mansions and apartments for tens and hundreds of millions of pounds. In the rest of the market, including a large portion of luxury properties, buyers are more cautious, transactions are taking longer, and sellers are being forced to offer price flexibility.

In the first half of 2026, 34 properties were sold in London at a price exceeding 15 million pounds, totaling 1.24 billion pounds in volume. This represents a 79% increase in transaction value and a 26% increase in volume. The average price per transaction rose from approximately 26 million pounds to 36.5 million pounds, driven largely by several mega-deals. Two prominent transactions illustrate this scale: a mansion in Chelsea sold for over 265 million pounds, and the 'De Holm' mansion near Regent's Park sold for approximately 195 million pounds. These two deals accounted for more than a third of the total turnover in the top segment.

One step below, the picture is different. In the first quarter, 68 transactions were carried out for more than 5 million pounds, a 35% decrease compared to the same period last year. Their total volume fell by 42% to 645 million pounds. For properties priced above 10 million pounds, only 16 transactions were recorded, a decrease of 54%. This gap stems from how different buyer groups perceive price. A billionaire purchasing a rare mansion views it as a tool for capital preservation, a family base, and a status symbol. Conversely, a buyer with a budget of 5 to 15 million pounds carefully scrutinizes purchase taxes, maintenance, financing costs, and alternatives in other cities.

Price Trends and Tax Hurdles

The average apartment price in London stood at approximately 545,000 pounds in May, an annual decrease of 3.7%. Across the UK as a whole, the average price was 271,000 pounds, reflecting a 2.7% increase. The primary weakness was recorded in inner London, where prices fell by 5.9%, compared to a 0.3% decline in outer neighborhoods.

In Kensington and Chelsea, the city's most expensive borough, the average price was approximately 1.26 million pounds. An average townhouse sold for about 2.37 million pounds, while detached homes averaged 4.49 million pounds. Luxury market indices indicate a 2.7% annual decrease, with prices currently about 13% below their peak. This weakness provides bargaining power, with the average discount relative to asking prices reaching 11.9%, and up to 15%-18% in some areas. Older properties, apartments with high management fees, and homes requiring deep renovation remain on the market longer.

Taxes add a significant hurdle. A foreign buyer who already owns an apartment may face a marginal purchase tax of up to 19%. When purchasing a property for 20 million pounds, the tax alone can amount to approximately 3.71 million pounds, even before accounting for legal expenses, brokerage, maintenance, and renovation costs.

The rental market continues to rise at a moderate pace. The average rent in London reached approximately 2,302 pounds per month, and about 3,596 pounds in Kensington and Chelsea. While yields in luxury areas remain relatively low, for wealthy buyers, the decision is often driven by property rarity, value retention, and access to one of the world's most important business hubs.