Prime London Property: Spring Market Turns a Corner
After a prolonged period of uncertainty, the Prime London property market is beginning to show tentative signs of recovery, as my colleague Clive Scrivener wrote recently in this article. The latest Spring 2025 report from LonRes offers a snapshot of a market in flux – cautiously optimistic in some areas, yet still grappling with structural challenges in others, writes Azeem, Partner at Wimbledon based surveyors Scrivener Tibbatts, a national valuation specialist.
Sales: A Fragile Turnaround
For the first time since mid-2023, house prices in prime London have recorded a year-on-year rise. February 2025 saw a modest 0.6% increase, marking what could be the start of a broader recovery. Under-offer numbers are also encouraging, with an 11% rise compared to the same time last year – a sign that buyer confidence may be slowly returning.
However, this optimism is far from universal. The market is still seeing high levels of volatility. The number of fall-throughs, sales that collapse before completion, has jumped by 45% year-on-year, a stark reminder of buyer hesitation and continued economic uncertainty. In response, sellers are adjusting their expectations. The volume of price reductions is up by more than 60%, suggesting a more realistic approach to valuations is starting to take hold.
The £5 million-plus bracket tells a more complex story. February saw a 13.8% rise in transactions in this ultra-high-end segment, and new instructions in this category increased by 30% year-on-year. However, overall activity remains subdued. This part of the market is moving, but not yet with the confidence or consistency seen in stronger years. Buyers and sellers alike appear to be testing the waters rather than diving in.
Lettings: High Rents, Low Supply
If the sales market is showing signs of recovery, the lettings market continues to be defined by scarcity. Supply remains tight, pushing rents up once again. February 2025 recorded 6.0% annual rental growth – the highest figure since November 2023 – and average rents are now more than a third higher than their pre-pandemic levels.
Despite this, the number of new tenancies being agreed is falling fast. Lettings were down by 42.1% year-on-year, and new rental listings dropped by nearly 30%. Landlords are holding on to existing tenants where possible, and many prospective renters are struggling with affordability constraints as rents continue to rise.
The Road Ahead
The LonRes report paints a picture of a market on the brink of change. There are glimmers of momentum in the sales market, but the road to recovery looks uneven. Buyers are returning, but they remain price-sensitive and quick to walk away if terms don’t align. Meanwhile, the lettings market remains a landlord’s game – but not without risks, particularly if affordability issues start to dampen demand.
As we head into the middle of the year, the key theme for prime London property appears to be cautious rebalancing. Recovery may not be fast, but the foundations are slowly being laid for a more stable future.
If you would like to discuss ESG or something related to a valuation please contact Zah via email at zah@scrivenertibbatts.co.uk or call 020 8947 7040.
