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Luxury market update from Carter Jonas
The last 12 months have seen a period of significant recalibration across the prime luxury residential market in both London and the wider English regions. Following a robust 2024, transaction volumes and total investment have seen a marked contraction. In Prime Central London, property values softened by approximately 3% to 6% while
transaction levels dipped
The lead-up to the Autumn Budget in November 2025 brought with it a significant ‘wait and see’ approach by many would-be buyers. Concerns over possible changes to capital gains tax created a very sensitive environment over that uncertain period, causing transactions to dip below where we would normally expect them to have been. With the Budget’s impact proving less disruptive than many had feared, this hesitation quickly faded, and 2026 opened with renewed optimism.
Looking further ahead, perhaps the most significant looming change to the market is the High-Value Council Tax Surcharge, targeting properties valued at over £2 million. While the change isn’t due to come into force until April 2028, the Valuation Office Agency will begin assessments in 2026. This has already begun to influence market sentiment as potential buyers factor these recurring annual costs (estimated to be between £2,500 and £7,500 per annum), into their long-term calculations.
"…the Budget’s impact [has been] less disruptive than many had feared…”
London
London’s prime luxury market saw a significant contraction in 2025, with transaction volumes falling approximately 65% compared to 2024. Total investment followed a similar downward trend, dropping from £7.8 billion in 2024 to roughly £2.2 billion last year. Specifically, sales of properties valued over £5 million fell from 750 in 2024 to just over 200 in 2025. While this decline is largely due to market conditions, it is important to note that these figures do not yet represent the full year. Due to a two- to four-month lag in Land Registry filings, we expect these numbers to adjust upward as more data becomes available.
The luxury market across the rest of England (properties valued over £1.5 million) mirrored the slowdown seen in London. Transaction volumes fell by 55%, dropping from just over 4,300 in 2024 to 1,900 in 2025. Total investment for this sector reached approximately £4.1 billion last year, a sharp decline from the nearly £10 billion recorded in 2024. As with the London data, these 2025 figures will likely be revised upward in the coming months as more sales are registered.
Samuel Richardson, Head of Sales, Mayfair comments:
"London’s luxury property market enters 2026 with renewed confidence after several years of subdued activity. Prime Central London is forecast to regain momentum as buyer sentiment improves, supported by easing mortgage rates, rising wage growth and softened pricing compared with the post‑pandemic peak. International buyers remain a major force, attracted by London’s global appeal and the relative value on offer. Overall, 2026 is shaping up to be a steadier, more optimistic year for the capital’s high‑end market.”
For more insight and professional advice on the luxury property market, the Luxury Property Team at Carter Jonas team are here to support you.
