The political and economic climate has led to a cautious approach from prime property buyers in the final months of the year, resulting in a dip in prices in central London.
According to recent data from Savills, house prices in Knightsbridge and Belgravia have decreased by two per cent and 1.5 per cent respectively, while there was a 0.8 per cent drop across the capital as a whole, as reported by .
The immediate effects of the new government's first Budget have been felt in areas "with the highest concentrations of wealth, and a more international buyer base," stated Savills. Since their peak in 2014, prime central London prices have fallen by over 20 per cent.
Lucian Cook, head of residential research at Savills, said: "The cautious mentality that we observed ahead of this summer’s general election and the Autumn Budget has persisted across prime markets as the year draws to a close, although properties continue to sell where they are priced competitively," He added that needs-based buyers have underpinned market activity post-Budget, benefiting from relatively stable mortgage rates and the prospect of further base rate cuts in 2025. As a result, these sub-markets have been the strongest performers in London.
Cook also noted that significant changes to º£½ÇÊÓƵ tax law, such as the phasing out of the 'non-doms' tax regime and the new stamp duty surcharge for second homes, have created a "challenging" market.
Savills predicts a four per cent decrease in prime central London property values in 2025 as the market adjusts to a new fiscal and regulatory landscape. This follows a challenging year for high-end properties in 2024, characterised by periods of uncertainty due to fears over changes to the non-dom regime in the spring budget, election uncertainty in July, and pre- and post-autumn budget anxieties.
However, 2025 is expected to bring fewer tax and regulatory surprises, with most – if not all – significant tax changes already announced in the Autumn budget.
