Mid-Market Musings
Referred to as the “Mid-Market” by the buying team at RFR, transactions of properties between £5m and £10m represent a dynamic and important component of the London market. Whilst transactions below £5m represent around 85% of the central London market, and activity in the Super Prime £10m+ market tends to populate the headlines, the Mid-Market is the lifeblood of our Prime/Super-Prime industry, representing circa 65-70% of all trades over £5m.
With this in mind, we thought it might be interesting to give the Mid-Market due attention and put down some observations we’ve made so far this year.
1. A family affair
Currently the preserve of families and individuals who choose to set down roots in London for work, family and schooling, the Mid-Market is underpinned by the ‘needs-based’ buyer who remains motivated to get on with the business of setting up home. However, by way of contradiction, buyers in this price bracket are likely to be more financially constrained – and therefore sensitive to economic fluctuations, tax changes and escalating interest rates. In recent times, we have seen that transacting in this market has become more emotional and drawn-out than ever before.
2. Stand-off
A frustrating dichotomy endures in the psychology of buyers and sellers in the London market, with buyers ruminating over all manner of socio-economic outcomes and very sensitive to price, whilst vendors want to maximise what is often one of their most significant assets and are reluctant to sell for a price that (relative to recent post-Covid market peaks) they perceive to be a loss. The resulting stand-off has contributed to a 27% decrease in year-to-date transaction volumes of Mid-Market properties across the prime central London market, compared with the 5-year average over the same period.
3. Safe as houses
As discussed, the success of the Mid-Market is underpinned by the presence of the needs-based buyer. It is unsurprising then that the family house market dominates activity, making up 60% of trades within this price range. This trend is exemplified in neighbourhoods like Chelsea and Kensington where well-to-do British, European and US buyers have habitually chosen to raise families, and where momentum is driven by the natural cycle of family life. Inventory levels in Chelsea in particular have remained strong without flooding the market, meeting demand and sustaining momentum.
4. Discretionary districts
Meanwhile, apartment purchases tend to belong to the more transient and internationally fluid buyers who can pick their moment to acquire a special pied-à-terre. With global headlines suppressing momentum, we have witnessed a more lackadaisical, discretionary market in central London neighbourhoods such as Mayfair and Marylebone so far this year. Notwithstanding this and to our surprise, H1 trading volumes for Mid-Market apartments in Mayfair are 36% up on the previous four year average. Whilst this percentage sounds significant, in numerical terms this represents just a handful of trades either way. And, on closer inspection, the bulk of these transactions were held over and represent the rump of recent stock: compromised apartments that haven’t traded in recent years and were finally priced to sell. The average time that a property was listed on the market was a laborious 22 months, with an average of 16% ‘discount’ to asking price.
5. Herd mentality
Despite general price sensitivity, nothing inspires confidence like a rival bidder, and where sellers are prepared to price sensibly or make bold and decisive price reductions, we have seen buyers enter a frenzy of competitive bidding – with owners sometimes achieving prices well beyond the original asking price. This herd mentality can be frustrating and difficult to navigate, leading as it does to erratic behaviour and outcomes.
Marylebone case study: one such apartment in Marylebone lingered on the market for over a year with limited interest at £5m. The owner eventually agreed to reduce the asking price to £4.75m, which duly prompted competitive bids and a deal was agreed at £4.8m. A new buyer then unceremoniously appeared, gazumping the winning bidder and the property ended up trading for £5.15m!
6. Domestic confidence
Given the current global instability, it is perhaps unsurprising that domestic buyers have dominated the £5-10m market so far this year. With the Autumn Budget safely behind us, and rumours of further interest rate drops, the start of 2026 saw a surge of Brits back in town! The ongoing conflict in the Middle East, and the resultant rise in oil prices and inflationary spike, may have had a cooling effect, but British demand – tending to be more needs-driven – has persisted. Buyers looking to trade up or down within their neighbourhoods, and particularly those armed with local knowledge, have more confidence when they see the right property and tend to win out through decisive bidding.
7. USA here to stay
As is well publicised, US buyers also continue to be very active in the London market and now reportedly account for a significant 30% of London purchases between £5-10m. The Wall Street Journal reported that 11 million US citizens travelled to Europe in the first half of 2026, up 2.2% on the same period last year. At this time of year, we see Americans using their homes in London as the gateway to Europe, especially Mediterranean destinations like Greece, Italy and the South of France. Meanwhile, whilst London has always been popular with the culture-hungry folks from the East Coast (typically inherited wealth or amassed from lucrative careers in private equity and/or banking), we have observed a palpable shift in our client base towards West Coast creatives/tech entrepreneurs who view London as a more long-term political and physical safe-haven.
8. “Europe’s start-up capital”
We were encouraged by UBS’ recent report showing that AI and tech companies are creating more billionaires than ever, and that the UK has overtaken India to become home to the third-largest number (behind the US and China) of “unicorn” businesses (due to its nurturing of AI and fintech start-ups). The report goes on to suggest that Britain has cemented its “position as Europe’s undisputed start-up capital”. Due to the rapid rate of scale in the tech industry, enabling founders to build huge success faster and younger than ever before, we are increasingly advising buyers in their 20s and 30s as they enter the Mid-Market following their first significant liquidity event. We (and they) are certain they will be back for bigger and better in due course!
9. Council tax threshold
In the November 2025 Budget the Government announced a High Value Council Tax Surcharge (don’t be tempted to default to the catchier but alarmist “Mansion Tax” nickname). Taking effect from April 2028, the HVCTS will begin at £2,500 per annum and will rise to £7,500 for properties over £5m. Realistically, in its current form, this will not dent the coffers of the majority of £5m+ homeowners, and the amount this will raise annually (c.£400m) does not seem to warrant the complicated mechanics of implementing this. The wider expectation, however, is that this could “creep” upwards into a more substantial annual property tax, unless indeed it is scrapped by a new government before it starts.
We hear anecdotally of buyers with a budget of circa £5m looking to acquire at just below £5m to hedge against the risk of a costly annual charge should policy change. This is not yet a mainstream concern, but this type of cliff-edge has historically suppressed pricing around thresholds, and it will be worth watching whether a more pronounced pattern emerges here.
Conclusion
There is no doubt that the Mid-Market, along with its Super-Prime sibling, has faced its challenges so far this year. However, in amongst the negative headlines and drawn-out negotiations, the lively surges of activity and the numerous examples of competitive bidding suggest that the £5-£10m market is holding firm. Whilst buyers remain cautious and price-sensitive, appetite for good quality, fairly priced homes – especially where there is a specific need to lay roots – prevails. With the knowledge and relationships to identify best-in-class properties, the experience and data to decipher pricing and values, and the insights and strategic acumen to win out in competitive bidding, there are exciting opportunities to be found in this market.
Warmest,
