Despite economically challenging conditions, sales of high-end real estate in London remain robust.
The Gist of London's Elite Real Estate Scene in 2025
Bestowing a Glimpse into the Current Landscape
London's high-end property market continues to exhibit stability despite the robust challenges that came its way, according to a renowned real estate company, Savills. The magic number of sales above £5 million in the initial three months of the year remained steady at 93, matching the 92 sales in 2024.
Total values for houses between £10m and £15m were surprisingly high, reaching £0.19bn, 64% above the first quarter of 2024 and 33% above the first quarter of 2023. Nick Maud, Director of Research at Savills, praised London's reputation as a "safe haven" for the global high-net-worth community.
However, Maud forewarned potential turbulence in the coming months, as the strong wind of volatility in the global stock market could limit buying power. He also mentioned that agents on the ground reported much tougher market conditions for sellers.
Puzzling Out the Phenomenon of High-End Property Transactions
Despite the promising sales figures, it appears that the government's non-dom policy and VAT changes have somehow left a footprint on the market. Savills found that growth has been sparked by the demand for lock-and-leave pied-a-terres, with domestic buyers snapping them up rather than foreign investors.
Alex Christian, co-head of Savills Private Office, commented that there's been a return of the domestic pied-a-terre buyer who was notably absent during the pandemic and its aftermath. He added that buyers are primarily focused on securing long-term family homes.
International Investors: From Owning to Renting
A noticeable change has taken place in the strategy of international buyers in London's prime property market. Many have started renting luxury serviced apartment buildings that offer 5-star hotel amenities instead of purchasing properties for investment purposes.
Data from Lonres demonstrates that the average rent agreed on flats in prime central London surged by a whopping 7.9% in the first three months of 2025 compared to the last quarter of 2024. The average rental values of prime central London flats are now 11.3% higher than they were a year ago. It appears that these changes have been fueled by the shift in strategy by high-end property owners.
A New Era for the Prime Property Market
London's prime property market is currently under a metamorphosis, marinating in the aroma of changes driven by government policies, international buyer trends, and alterations in the rental demand.
Here's a quick summary of the current market trends:
- Price Growth: Prime Central London areas are projected to see steady growth of 1.5% to 2.5% in 2025, with stronger growth expected in regeneration zones for 2026.
- Supply and Demand: The market is experiencing a surplus of luxury homes for sale, leading to flatlining sale prices. However, this excess has not deterred the robust rental market, which is witnessing increased demand due to the reluctance of owners to sell.
- Investment Trends: Areas like Barking, Croydon, and Walthamstow are garnering attention for their strong yields and potential growth in the rental sector.
Overall, unpredictable tides await the prime property market in London as it navigates a course influenced by government policies, a resurgence in domestic buyers, shifting international trends, and the rising popularity of rental properties among high-end investors.
- The high-end property market in London, according to Savills, has remained stable in 2025, with 93 sales above £5 million in the first quarter, a figure that matches the sales from the previous year.
- Nick Maud, Director of Research at Savills, highlighted that London's reputation as a "safe haven" for the global high-net-worth community has been maintained, despite the predicted turbulence in the global stock market.
- Alex Christian, co-head of Savills Private Office, noted a resurgence of the domestic buyer in the market, with a focus on securing long-term family homes.
- International investors in London's prime property market have started a significant shift, choosing to rent luxury serviced apartment buildings rather than purchasing properties for investment purposes, as evidenced by data from Lonres.
- The prime property market in London appears to be undergoing a metamorphosis in 2025, as it adapts to government policies, a rise in domestic buyers, changing trends among international investors, and the growing popularity of rental properties among high-end investors.
