Buyer demand in London’s most expensive neighbourhoods increased in the final quarter of 2025, despite renewed political debate over a potential mansion tax on high-value homes, according to the latest Prime London Demand Index from Benham and Reeves.
The index, which tracks the proportion of homes already sold subject to contract across the £2m–£10m market and the £10m-plus “super-prime” sector, shows overall demand across prime London rose by 1.2% in Q4 compared with the previous quarter. Prime demand stood at 13.2%, still 1.3% down on the year.
Activity was strongest in lifestyle-driven areas of west and south-west London. Chiswick topped the prime rankings, with 43.3% of homes between £2m and £10m under offer.
Islington, Putney, Wandsworth and Barnes also recorded high levels of absorption, with Regent’s Park, Fitzrovia, Richmond and Maida Vale among the areas showing the sharpest quarterly momentum.
QUARTERLY FALLS
By contrast, Battersea, Clapham and Canary Wharf posted the steepest quarterly falls in demand, alongside softer conditions in Notting Hill and Holland Park.
In the super-prime £10m-plus bracket, demand slipped marginally to 3.3% in Q4, down 0.7% on the quarter and 0.9% year on year. Highgate was the most in-demand super-prime location, followed by Marylebone, Regent’s Park, Hampstead and Kensington. Marylebone and Regent’s Park also saw the strongest quarter-on-quarter upticks in activity.
Despite the mixed picture at the very top end, agents report that buyers remain engaged and selective, with pricing discipline and quality of stock proving decisive as the market enters 2026.
LIFESTYLE-LED NEIGHBOURHOODS
Marc von Grundherr (main picture, inset), Director of Benham and Reeves, says: “Despite the renewed noise around further taxation on higher value homes, prime London demand strengthened as we moved through the final quarter of the year, with buyers clearly prepared to act on the right property at the right price.
“The strongest performance continued to come from lifestyle-led neighbourhoods, particularly across South West London, where buyers can secure more space without compromising on connectivity, schooling or amenities, and this is helping to keep activity moving even while headline policy risk remains.”
MANSION TAX
And he adds: “While a Mansion Tax may still be some way off in practical terms, the likelihood is that it will encourage some buyers to advance their plans rather than delay them.
“However, whilst London’s prime market has always been highly responsive to sentiment, it is also remarkably resilient, and our latest research suggests interest is holding firm as we start a new year.”
