Selling up and moving in London has rarely felt easy, but the numbers this year suggest it has become unusually punishing. New data from Connells Group shows that just 9% of London sellers in 2026 had bought their home within the previous five years. That is the lowest share of any English region and a sharp drop from 27% back in 2006.
For investors and analysts who watch how households redeploy capital, the London picture is now the most extreme version of a national pattern. Weak price growth and elevated transaction costs are combining to slow the churn that usually keeps housing markets liquid.
What happened
- Only 9% of 2026 London sellers had owned their home for five years or less, down from 27% in 2006, according to Connells Group.
- Roughly 21% of London homes are now worth less than their original purchase price, versus 7.9% nationally.
- 20% of sellers in England and Wales who owned for five years or less sold at a loss in 2026, up from 6% in 2006.
- 23% of those selling within three years crystallised a loss, up from 10% two decades earlier.
- Around 32% of homes originally bought for £1m or more are now worth less than they were purchased for, compared with 7.5% of sub-£1m homes.
Why London shows the worst case
The capital combines the heaviest stamp duty bills with the weakest price growth. That double hit is what Connells flags. Homes that change hands there carry larger tax tabs because prices are higher, yet those same homes have not appreciated as fast as they did in much of the 2000s.
The result is a thinner equity cushion. In a rising market, even short-term owners walked away with enough profit to cover legal fees, agent fees and stamp duty on the next purchase. That cushion has eroded. In some prime pockets, prices still sit below the previous peak, which means a move can crystallise a real loss rather than a paper one. The contrast inside the capital is stark: roughly a third of homes once bought at £1m or more are now below their purchase price, while sub-£1m homes sit in single digits at 7.5%.
Our analysis
This is more than a residential curiosity. Low churn has knock-on effects for adjacent markets: fewer estate agency instructions per branch, slower remortgaging cycles, and less transactional demand for moving services, legal work and renovation finance.
For buy-to-let operators, the picture is a warning shot. The same stamp duty drag that traps owner-occupiers also clobbers landlords looking to upgrade or exit. If a London rental was bought in the mid-2010s near the previous peak, the owner may now face selling at a loss even before agent fees are considered.
There is also a behavioural point. The published loss figures only count households who actually moved. The larger pool of would-be movers sitting still is invisible in the data, but it is the reason instruction numbers in prime central London have stayed soft. London is the extreme case, but the same arithmetic is hurting sellers across England and Wales, where 20% of those within five years and 23% within three years are now taking a hit.
A worked example
Say you are a landlord with a flat bought in a prime London postcode in the mid-2010s. The original price was comfortably above £1m, so the home now sits in that 32% band of stock worth less than it was bought for. Listing today risks crystallising a nominal loss, then layering agent fees and a fresh stamp duty bill on the replacement purchase. A more rational trade may be to hold, refinance, and wait for prime values to recover above the previous peak rather than lock in the loss now.
What to watch next
Watch the next two quarterly reads on seller tenure from Connells. If the share of short-tenure sellers ticks below 9% in London, the freeze is deepening. If sub-£1m segments start to show rising churn while prime stays stuck, expect capital values in the mid-market to lead any eventual recovery.
Key takeaways
- London now anchors the UK for moving cost drag, with only 9% of sellers having owned for five years or less.
- The market is splitting: sub-£1m homes show 7.5% negative equity, while £1m-plus homes sit at 32%.
- For investors, the hidden loss pool of owners who refuse to move is likely bigger than the published figures suggest.
Frequently asked questions
Why are fewer London owners selling within five years?
A combination of higher stamp duty bills on expensive homes and weaker price growth has reduced the equity cushion that previously made short-term moves profitable, according to Connells Group.
How does London compare with the rest of England and Wales?
Connells data shows London has the lowest share of recent buyers reselling and the highest share of homes worth less than their purchase price, at about 21% versus 7.9% nationally.
Does the data cover all would-be sellers?
No. The figures only capture completed sales, so households sitting on losses and refusing to move are excluded.
What does this mean for landlords?
Buy-to-let owners in prime London face the same stamp duty drag as owner-occupiers, plus the risk of crystallising a loss if they upgrade or exit within five years of purchase.
