Robust sales of prime London real estate persist in the face of challenging economic conditions
In the heart of London's high-end property scene, the market has bravely weathered various challenges, Savills reports.
For the initial three months of this year, 93 sales exceeding £5 million were recorded, matching the 92 sales of 2024. This stubborn resilience is impressive given the turbulent currents. The grand total for houses valued between £10m and £15m stands at a robust £0.19bn, representing a 64% hike from the first quarter of 2024 and a 33% jump from the same period in 2 domestic years past.
Nick Maud, research director at Savills, offers a measured assessment, stating, "London retains its allure for the global elite as a safe haven." However, he cautions that the horizon may not always be smooth sailing, with potential market storms looming due to unpredictable global stock market volatility.
Tougher market conditions have reportedly emerged for new vendors, according to Maud.
London property sales above £5m:
Although sales figures outperformed expectations, signs of changes instigated by government policies are subtly creeping in.
Savills uncovered evidence suggesting that the growth in demand has been primarily driven by domestic buyers seeking luxury 'lock-and-leave' pied-a-terres. This shift from international buyers is notable.
Alex Christian, co-head of Savills Private Office, observes this pattern, remarking, "We're witnessing a revival of the domestic pied-a-terre buyer, who was notably absent during the pandemic and its aftermath." He adds that these buyers are primarily focused on securing long-term family homes.
As international investors appear to steer clear of property investment, they've taken an interest in renting luxury serviced apartment buildings boasting top-notch amenities.
According to Lonres data, rents agreed on premium central London flats surged by an astounding 7.9% during the first three months of 2025 compared to the last quarter of 2024. The average rents for these elite flats are now 11.3% higher than a year ago.
Insights:
The shift in demand for London's prime property market is influenced by a blend of factors:
- Currency Factors: The weak British pound against the US dollar has proven enticing to U.S. buyers, offering a substantial discount compared to a few years ago[6][7].
- Geopolitical Factors: London's perceived stability serves as a lure for investors in a world fraught with uncertainty[7].
- Changing Nationalities: In 2024, U.S. buyers claimed the top spot as the largest group of foreign purchasers in prime central London, surpassing Chinese buyers[6].
- Middle Eastern Interest: Middle Eastern buyers maintain their presence in the ultra-prime segment, frequently eyeing properties valued over £20 million, captivated by London's prestige and lifestyle offerings[6].
Serviced apartments have experienced a surge in popularity, stemming from factors like flexibility, high-end amenities, and adjustments to regulations or market conditions[8]. While there is no direct link between this trend and shifts in demand, it could be associated with broader lifestyle changes or market conditions.
- In the first quarter of 2025, there was a significant increase in London property sales exceeding £5 million, outperforming expectations set in previous years.
- The growth in demand for luxury properties in London has primarily been driven by domestic buyers, as international investors shift their focus towards renting luxury serviced apartment buildings.
- Nick Maud, research director at Savills, agrees that London continues to attract the global elite as a safe haven for investments, but he also cautions that potential market storms may arise due to unpredictable global stock market volatility.
- As per Lonres data, rents agreed on premium central London flats surged by 7.9% during the first three months of 2025 compared to the last quarter of 2024.
- The shift in demand for London's prime property market is influenced by various factors, including the weak British pound against the US dollar, London's perceived stability, changes in nationalities of foreign purchasers, and ongoing interest from Middle Eastern buyers.
