Prime house prices ease as sales activity remains steady

Major asset price movements till the end of March 2026

Source: Savills Prime Sales Index, Q1 2026

“At the start of this year, the outlook for the spring market was promising. Inflation was falling, a rate cut seemed almost certain, and the wealth tax debate was over,” commented Francis McDonald, research director at Savills.

“Despite the events of the last month, activity levels still look strong, supported by more motivated buyers, albeit fewer in number, and who are looking to get stuck into mortgage offers and agree deals in anticipation of a further rise in rates. However, this has given buyers yet another reason to approach the move with caution.

“As a result, key values ​​are continuing to decline, albeit at a slow pace, at a time when we might conservatively expect them to go down, if not go up.

“For those buyers who can understand the current disruption and take a medium-term view, the value of properties at the top end remains good, with prices not far off where they were before the pandemic in many cases. But, with so much uncertainty about where things go from here and financial markets being so reactive, sellers will need to be realistic on pricing this spring.”

There is a widespread trend in the South West and West London

In London, the South West and West prime housing markets proved the most resilient, and remained stable during the quarter. Areas including Teddington, Wimbledon and Fulham saw prices rise at the start of the year, bucking the wider trend.

But overall, the value of prime properties in London’s more domestic markets fell 0.5%, according to Savills. Price sensitivity is likely to persist in the coming months, particularly given this market’s exposure to higher mortgage costs.

The Savills survey of agents already points to a clear shift in sentiment, with both buyers and sellers significantly less confident than at the end of Q4, when while markets were exposed to potential Budget tax changes, they experienced some degree of relief.

“Recent developments are likely to strengthen the UK’s position as a safe haven, particularly in the attractively priced prime central London market, where values ​​are 25% lower than the 2014 market peak. However, this must be viewed in the context of the changing tax environment,” McDonald said.

“As a result, demand is more likely to come from overseas buyers looking for a London bolthole, rather than a widespread return of non-domiciled residents. At the same time, higher stamp duty costs are expected to reduce any upward pressure on prices, with early signs suggesting some of this demand is being shifted to the capital’s prime rental sector.”

Regional £2million-plus market reacts to budget ‘better than feared’

Savills says the key markets of the Midlands, northern England and Scotland saw prices rise in the first quarter, reflecting the fact that they are less reliant on mortgage lending than elsewhere.

Across all major regional markets, values ​​declined 0.2% in the quarter and 3.9% on the year.

In particular, there was reduced pressure at the top end of the key regional market (over £2m) due to fears of changes in the tax environment for the better. While values ​​have fallen 6.9% over the year, they have fallen only 0.6% in the quarter, as the market has begun to bottom out.

McDonald added, “The improved sentiment in regional markets risks being short-lived as mortgage rates rise in response to economic disruption. But the overall impact will ultimately depend on the length of the conflict.”

“In the short term, a small group of committed buyers will take advantage of the reduced competition and value on offer. Nevertheless, sellers will need to remain realistic on pricing this spring and summer. Current evidence suggests that the long-anticipated recovery in the prime market will take longer than expected to gain momentum.”