Can the Capital’s Prime Residential Market Remain Competitive Globally?

Tuesday 30 June 2026

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Can the Capital’s Prime Residential Market Remain Competitive Globally?

Photography by Chris Hopkins

Industry leaders gathered at a recent roundtable to examine how global demand, policy change and delivery challenges are reshaping Prime Central London – and whether the capital can maintain its competitive edge in an increasingly complex market?

London remains one of the world's most desirable residential markets, but delivering prime housing has become increasingly complex. At a recent roundtable hosted by NLA members Studio PDP in partnership with V-ZUG, experts from across development, planning, architecture and residential research came together to explore how global demand, policy change and delivery challenges are reshaping Prime Central London (PCL).

The discussion, attended by representatives from across the built environment sector, including Shannan Wood from the NLA, examined how the market is responding to global inflation, geopolitical uncertainty, regulatory change and shifting investor sentiment.

The central question was clear: as global competition intensifies and development becomes increasingly complex, how can London maintain its position as one of the world's leading prime residential markets?

A market shaped by global forces

The roundtable opened with a market overview from Frances McDonald, Director of Residential Research at Savills, who reflected on the political and economic events that have influenced the PCL market in recent years. Changes to stamp duty, Brexit, non-dom tax reforms, political uncertainty, the pandemic, the Russia-Ukraine war and more recent geopolitical volatility have all contributed to a challenging operating environment.

Prime residential has always been an international sector. Today, that dynamic is more pronounced than ever. Buyers are globally mobile, capital is increasingly fluid, and London is competing within a sophisticated global marketplace where investors have more choice than ever before.

The central conclusion was clear: demand for Prime Central London remains remarkably resilient, but the ability to deliver new schemes is becoming increasingly constrained by regulation, planning requirements and mounting development complexity.

London's enduring appeal amid growing competition

London's cultural offer, global connectivity and world-class educational institutions continue to underpin its international appeal. Yet competition is intensifying.

Cities such as Dubai and Abu Dhabi have successfully combined high-quality lifestyle provision with favourable tax regimes, while significant investment in infrastructure, amenities and education has strengthened their appeal to internationally mobile buyers. As these markets mature, they are becoming increasingly sophisticated competitors.

At the same time, growing geopolitical uncertainty is reinforcing the value of stability. As investors reassess risk, London's transparency, legal certainty and mature property market continue to differentiate it from many emerging competitors.

Participants also discussed the growing international perception of crime in parts of London. While the city remains safe by global standards, perception increasingly matters when competing for global capital and talent.

Domestic policy is also influencing market behaviour. Changes to non-domicile tax rules, for example, are prompting some international buyers to favour renting over ownership while assessing longer-term commitments to the UK.

Delivering quality in a constrained environment

While demand remains relatively resilient, delivery is becoming increasingly challenging.

Planning constraints, particularly around space standards and affordable housing requirements, continue to affect development viability. Yet participants agreed that a premium residential experience is not defined by size alone.

Rebecca Campbell, Partner at Studio PDP, highlighted how thoughtful and efficient design can maintain quality within increasingly restrictive area requirements introduced by some local authorities. Jo Rams, Senior Associate at Newmark, emphasised the importance of constructive dialogue between councils and development teams in securing the best possible outcomes.

The discussion also challenged traditional assumptions around luxury and value.

While gyms, lounges, concierge facilities and other amenities remain attractive to purchasers and are often expected within prime developments, their cost and long-term utilisation are increasingly coming under scrutiny. By contrast, fundamentals such as air quality, acoustic comfort, natural light and spatial efficiency are emerging as more meaningful indicators of quality and long-term value.

This raises important questions about how value is defined within high-end residential developments and where investment should be prioritised.

Affordable housing requirements remain another critical consideration. While on-site provision is often expected, participants explored examples where consolidating affordable housing across multiple schemes into a separate development can help unlock viability while still delivering policy objectives.

Polly Hubble, Development Executive at Native Land, reflected broader industry efforts to explore more flexible and deliverable approaches.

Changing tenure patterns

Market uncertainty is also influencing how people choose to live.

For internationally mobile clients, renting can offer valuable flexibility during periods of economic and political change. As a result, premium rental products continue to evolve.

Mark Hudson, Co-Founder of SLO Serviced Apartments, highlighted how professionally managed, sustainability-focused and design-led developments are increasingly attracting corporate occupiers, often aligning with wider organisational environmental goals.

While sustainability expectations continue to rise, they are not yet the primary driver of purchasing decisions within the prime residential sector. Brand, reputation and quality remain powerful influences, reflected in the continued growth of branded residences globally.

What residential can learn from other sectors

The discussion also considered what the residential sector might learn from other asset classes, particularly offices.

Andrew Derry, Development Director at Aarrkk, noted that adaptability and future flexibility, now widely embedded within workplace design, remain comparatively underdeveloped in residential schemes.

Participants also observed that sustainability has progressed more rapidly within commercial real estate, where occupier demand has acted as a powerful catalyst for change. While environmental targets are becoming increasingly important within residential development, the pace of transformation remains slower.

The impact of the Building Safety Act

Few topics generated as much discussion as the impact of the Building Safety Act.

While there was broad support for the legislation's objectives, participants highlighted the significant delivery challenges emerging through implementation. Extended approval periods, approaching a year in some instances, are introducing programme risk, affecting viability and creating uncertainty for developers.

These challenges are already beginning to influence development strategies, with some suggesting that schemes may need to be either below or significantly above the 18-metre threshold to remain commercially viable.

Sheena Fensom, Head of Residential Property at Motcomb, noted that the industry continues to adapt in real time to an evolving regulatory environment, with stakeholders working hard to remain informed as implementation develops.

Balancing ambition and viability

Demand for high-quality, design-led residential development remains robust, and definitions of best-in-class continue to evolve. Quality of design, liveability and carefully considered amenity provision are increasingly shaping perceptions of value.

Despite economic uncertainty and growing international competition, London's position as a global prime residential market remains secure. The greater challenge lies closer to home.

As planning requirements, affordability obligations and regulatory processes continue to evolve, ensuring policy ambitions align with development viability will be critical. For the sector, the question is no longer whether demand exists, but whether the conditions are in place to deliver the homes the market is seeking.

As London continues to evolve, the conversation highlighted the importance of collaboration between policymakers, developers, designers and industry bodies in ensuring the Capital remains both globally competitive and locally deliverable.

The answer will play an important role in shaping the future of Prime Central London.