Approaching the half-way mark of 2025, what do the latest Prime London figures indicate for buyers and renters considering the capital in the near future?
Calm after the storm
The first quarter of 2025 was characterised by an unusual period leading up to the end of the Stamp Duty holiday on 1 April. Many advisers were extremely busy, clearing transactions before the deadline. After a surge of activity in March, the market has seemed less frantic, and the summer may even be normal.
With a longer-term outlook, and to smooth over the anomaly of the first quarter, it’s more helpful to look at the latest statistics in the context of the numbers posted in previous years, rather than focusing on movements over the last 30 days.
According to LonRes statistics for Prime London in April 2025, the number of transactions was 26% lower than a year earlier and 23% lower than the April 2017-2019 (pre-pandemic) average.
The number of sellers who reduced asking prices continued to grow, rising by 54.1% in March and April compared to the same two months last year. The result was that the average discount from initial asking price across prime London was 8.9% in April 2025. Average achieved sold prices fell by 2.9% on an annual basis and values were 1.3% lower compared to 2017-2019 pre-pandemic levels.
The trend indicates that opportunities for well-informed buyers can still be found in London.
Prime property looks attractive
At the £5-million-plus level, sales agents report a few more instructions (4.2%) than the same month last year, and transaction numbers remained the same as last April.
Yet over the last 12 months to the end of April there has been a 23% increase in stock. And, in terms of prices achieved, the market ‘stabilised’ after the volatility seen in the first quarter.
But the biggest revelation may be that across prime London the number of £5-million-plus homes available is approaching record highs at 69% above pre-pandemic (2017-2019) levels.
This suggests a buyer’s market, in which investors have more choice and well-prepared buyers have the power to negotiate.
Rental market remains tight, but better at the top end
Anecdotally, clients are finding conditions for renting suitable properties difficult.
Prices continued to rise, with a 5.1% per square foot increase recorded in April across prime London where average rents are now 34% above the 2017-19 pre-pandemic average.
For renters, there is certainly a shortage of suitable supply as evidenced by the 35% annual decrease in the number of lets agreed and a near 22% fall in new instructions, figures that are well below the pre-pandemic levels.
The headline figure of the number of properties to rent, at 56% lower than five years ago, sounds disheartening. The truth is that it’s a story of two markets.
For potential high-end tenants, at the £2,000 per week level and above, there’s actually 11% more stock available versus April last year and only a slight decrease of 5% from April 2020 levels.
Furthermore, some owners who cannot or will not sell are choosing to let, which, at the top end has led to some unique properties that rarely come to market now being available to rent.
Opportunity in uncertain times
Market turmoil caused by rapid-fire policy changes in the United States has affected global asset values. Many clients are looking to redeploy capital and are conferring with UK wealth managers, tax specialists and currency experts to weigh the options.
We truly are living in interesting times. The cost of capital remains slightly higher than the last decade or so, but this is mainly impacting domestic, debt-dependent buyers and sellers. Even for those parties, in the medium term, the Bank of England’s recent moves to cut rates can be seen as a positive influence on market sentiment.
Many private clients from the Americas are making inquiries about bringing business to the UK and basing their families here. Buyers from the Middle Eastern and Asian countries who have not been in the market for several years are back in town.
Perhaps the most significant figure is that for dollar-denominated purchasers, real values are down 30-40% compared to 2014. This has been a trend for some time, not a correction.
And though they may be holding on optimistically, many owners are unlikely to realise significant gains on properties purchased in the last decade or so. As LonRes, notes, ‘The latest figures on pricing continue a long trend of relatively poor performance—average values in many parts of prime London are in line with where they were back in 2013.’
If you are considering at property in terms of an investment opportunity, this may be the right moment to look at London. It’s also a world capital and a nice place to live.
Considerations for establishing a presence in the UK
Newcomers to the UK are not directly affected by the 2024 abolition of the non-dom regime, yet they must take into account the effects of its replacement on income and inheritance tax.
New arrivals who have not been UK residents for the preceding ten years qualify for the four-year Foreign Income and Gains (FIG) regime, allowing them to remit foreign income and gains to the UK tax-free for up to four years.
Proponents of the FIG regime claim it offers genuine tax advantages for the first four years, making the UK potentially attractive for wealthy individuals who can structure their affairs appropriately.
It also creates a substantial competitive advantage for fresh arrivals versus existing wealthy residents who lost their non-dom benefits. In the property market this may mean:
- Reduced competition: With an estimated 11,000 millionaires departing, there’s less competition for prime properties, particularly in London and the prime locations traditionally favoured by non-doms.
- Pockets of price adjustment: High-end property markets may continue to face downward pressure as supply increases from departing wealthy individuals.
- Rental opportunities: Properties previously owner-occupied by wealthy non-doms may enter the rental market, but clients will need to have all their qualifying documents in order and be willing to move quickly.
Clients must keep an eye on long-term considerations to plan for what happens after the four-year FIG period expires, beyond which they will then face full UK taxation on their worldwide income.
While the UK is losing existing wealthy residents, it has simultaneously created attractive conditions for new, wealthy migrants who can benefit from the transitional arrangements and reduced competition in prime asset markets.
In conclusion, for the moment things look more predictable than they have since last year. We at Longview are always checking in with clients, to discuss their ideas in light of their situation and future plans.
Our current advice: before you go away for the summer it might be time for a quick call—to test your own hypothesis.
