Spencer House, London in the context of St James's Place

In British usage, the term townhouse originally referred to the opulent town or city residence (in practice normally in Westminster near the seat of the monarch) of a member of the nobility or gentry, as opposed to their country seat, generally known as a country house or, colloquially, for the larger ones, stately home. The grandest of the London townhouses were stand-alone buildings, comparable to the hôtel particulier, which notably housed the French nobleman in Paris, as well as to the urban domus of the nobiles of Ancient Rome. but many were terraced buildings.

British property developers and estate agents nowadays often use the term "townhouse" for terraced buildings, following the North American usage of the term, to aggrandise modest dwellings and attract buyers who associate the term "terraced house" with the cheap terraced housing built in the Victorian era to accommodate workers. The upmarket Victorian terraced housing, which can be found around many of London's garden squares, seems to be widely forgotten in these circles.