Prime London buyers negotiating prices down ahead of Budget – Knight Frank
Property transactions in prime areas of London were 6% higher in the three months to August than in 2025, according to estate agent Knight Frank.
The activity was also 2% higher than the five-year average.
Buyers are using economic and political uncertainty to get a discount on asking values.
Average prices in Prime Central London (PCL) fell by 3.3% in the year to August and are now 23% lower than 11 years ago.
The annual decline was 0.4% in Prime Outer London (POL) in August, with prices down by 7% over the last decade.
Stuart Bailey, head of PCL sales at Knight Frank, said: “The key difference this year is that buyers are using pre-Budget speculation and bond market jitters to negotiate the price down rather than walk away from the deal completely.
What mortgage and protection advisers should take from the FCA’s AI stance
Sponsored by Sesame Bankhall Group
“The underlying confidence among buyers is there and parts of PCL are extremely good value.”
Concerns among buyers in higher-value markets like central London include the scrapping of the non-dom tax regime, an increase in the second-home stamp duty surcharge and the possibility of future wealth taxes, according to Knight Frank.
The number of tenancies agreed in London in the three months to August was 8% lower than last year, which exactly matched the fall in new supply over the same period, Knight Frank’s data showed.
There were 8.7 new prospective tenants for every new listing in POL in August, which was the highest figure in five years. That compared to a ratio of 5.2 in PCL.
Activity is strong in the super-prime market above £5,000 per week, said Knight Frank, which has also been underpinned by weaker demand in the high-value sales.
Tom Smith, head of super-prime lettings at Knight Frank, said: “One of the most consistent themes we are seeing is prospective buyers continuing to defer purchasing decisions and opting to rent for a further 12-24 months.
“While concerns around non-dom reforms and wider tax policy remain relevant, many occupiers continue to adopt a wait-and-see approach.”
