Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

Prime Central London Property Prices Down 23% Since 2015 Peak

Knight Frank has reported that average property prices in Prime Central London (PCL) have fallen by 23% since their last peak in mid-2015. The firm attributes this decline to a succession of tax increases and political uncertainty.

In the year to July 2026, average property prices in PCL fell by 3.3%, marking the 39th consecutive month of annual declines. While there was a modest rise in prices over the two years to April 2023, this followed a 59-month period of declines starting from June 2016.

According to Knight Frank, cumulative inflation using UK Consumer Price Index (CPI) data amounted to 42% between mid-2015 and mid-2026. The report notes that a property bought in PCL in mid-2015 for £1 million should now be worth £1.42 million if it had kept pace with inflation, but is actually worth £770,000 today. This means that, when adjusted for inflation, property prices are now almost 46% cheaper than they were 11 years ago.

Knight Frank also reported that the number of transactions across London was 14% higher in the three months to July compared to the previous year, with a 3% rise in PCL. However, compared to the five-year average, property exchanges are down 6% in London and 15% in PCL. The report notes that this comparison is affected by stamp duty changes during and after the pandemic, as well as mortgage rate adjustments that began in 2022.

For letting agents and inventory clerks, these ongoing price declines and market shifts may impact rental yields, tenant demand, and the types of properties coming to market. The report also highlights a growing interest in refurbishment projects among buyers, as exceptional properties are in short supply.