Global political and fiscal upheaval and changes to stamp duty land tax (SDLT) have caused London’s prime property market to stall in the first quarter of 2025, although there are still deals to be done.
Savills’ latest Prime London Property House Prices Report, published at the end of April, highlights how “a year of political and fiscal upheaval, with uncertainty around how Trump’s tariffs might play out, weigh heavily on London’s prime markets”.
Prime Property Solicitors Marylebone
With around half the world’s population taking to the polls last year, national elections have disrupted the existing global order as new regimes are yet to bed in.
This has been seen in the UK, with the first Labour government in over 14 years coming to power in July 2024, and immediately introducing fiscal change, unwinding the ‘non-dom’ tax status, and increasing stamp duty for second homes to 5%.
These policies have “affected buying power within prime markets, which has fed into a broader atmosphere of caution… as buyers continue to watch and wait for further developments”, believes the global real estate services provider.
Savills found that across prime central London, prices are down 21.2% from their peak in 2014, or -42.3% on an inflation adjusted basis.
Price growth in prime central London continued to hover at -0.7% in Q1 2025, similar to the marginally negative quarterly growth observed since Q2 2024, found the report.
The negative trend is more marked on an annual basis with -2.6% growth across the region. Notting Hill (0.0%) and Mayfair (-0.2%) were the most resilient locations in prime central London, both experiencing falls of above -1% annually.
Click here to read Savills’ Prime London House Prices from Q1 2025.
Marylebone Property Solicitors
Data from CBRE also found a fall in sales value of prime London property since the start of 2025.
The global commercial real estate services and investment firm’s Prime Central London Residential Figures Q1 2025 showed that achieved capital values and £ per square foot (psf) values were down by 16.6% and 3.0% respectively compared to Q1 2024.
However, the report noted an increase in London prime sales volumes so far this year, revealing there were 519 sales in Prime Central London (PCL) in Q1 2025, up 18% year-on-year but down 13.6% from the final quarter of 2024.
CBRE puts the strength in sales volumes down to “London’s continued global competitiveness”, despite increases to stamp duty.
Furthermore, London’s status as a safe haven may help insulate PCL during an uncertain global economic backdrop, says the investment firm.
Activity in prime central London lettings market so far this year has been relatively subdued, CBRE’s report found, with just 683 lets agreed in Q1, 20.1% lower than the same period of 2024.
However, despite the low level of lettings activity, achieved rental £psf values increased by 5.4% in Q1 compared with the same period last year, while weekly rental values increased by 18.9%.
Fewer lets agreed and increased values have been driven by a shortage of supply, with the number of properties to let in PCL 17% lower than the same period last year.
CBRE attributes this in part to the upcoming Renters’ Rights Bill, which will have resulted in some landlords leaving the market.
Read CBRE’s full report here.
London Property Solicitors
It is likely that the sense of caution that currently hangs across prime central London housing markets will continue for the rest of the year
Activity levels should be supported by some safe-haven investment, though the extent of this will be dependent on the relative strength of the US dollar against sterling, says Savills.
With vendors likely to take a pragmatic approach to pricing, dollar buyers in particular could capitalise as discounts rise alongside supply.
Read our previous article about prime London property from January 2025 here.
Property Solicitors Marylebone
At Muscatt Black Graf, our experienced Residential Property lawyers, based in London’s West End, help with all aspects of buying, selling, developing, and financing residential property.
We advise high-net-worth individuals, corporate entities and domestic and overseas investors with their residential property needs in London and beyond.
Our residential team is headed up by Alex Finney. Alex acts for high-net-worth individuals and families in respect of their UK property interests. She advises on matters involving properties in prime London and high value transactions elsewhere in England and Wales.
Alex specialises in enfranchisement, lease extensions and development agreements and works closely with a network of esteemed professionals to assist clients in respect of all their private client needs, as well as providing advice as to the tax considerations and structuring relating to their property transactions.
Alex is contactable via af@muscattblackgraf.com.
This blog was prepared on 5 June 2025. It is not intended to be advice and should not be relied upon as such.