2nd June 2025
9mins
Trying to predict how a property market will perform, is rather like selecting a winner at the forthcoming Royal Ascot race meeting – skill and an understanding of the business is involved, but a dollop of luck is also required.
And sometimes, things go wrong.
Late last year, estate agent Knight Frank, predicted that average sale prices in Prime Central London (PCL) would increase by two per cent by the end of 2025.
It has now gone back to the drawing board after a slow start to the year and now forecasts that prices will remain flat throughout 2025, on the basis that “ the political backdrop has become more uncertain for higher-value markets over the last six months”.
This means the jitters caused by Donald Trump’s antics in the White House as well as the impact of seemingly intractable conflicts in Eastern Europe and the Middle East.
Camilla Dell, managing partner of Black Brick, agrees that the new forecast is more realistic, but points out that all over-arching property data is a very blunt instrument when it comes to assessing the state of the market. “They are very generic,” she said. London is made up of a series of micromarkets; there are postcodes that are doing much better in terms of price growth, and there are also different price brackets which are performing in very different ways.”
Her advice to anyone currently considering a purchase is to take a medium to long term view.
“Buying costs are much higher than in the past,” said Dell. “If you buy a property now and change your mind after a year, you will be selling at a loss.”
Growth, believes Knight Frank, will resume in 2026 with modest 2.5 per cent growth, but it expects to see cumulative growth of just over 19 per cent by 2029.
With a shortage of buyers willing to commit, the number of homes being discounted before a sale has hit a five year high, according to the venerable Coutts bank.
Using data from house price analyst LonRes it reports that just over eight out of ten transactions were for less than the original asking price, as serious buyers leverage their possession to negotiate hard.
Across central London the average discount on asking price is 9.3 per cent but in high priced prime locations, the percentages are higher. In Mayfair and St James’s, for example, the typical discount is 15 per cent, while in Knightsbridge and Belgravia, it stands at 12.5 per cent.
Meanwhile, out in the desirable suburbs – think Battersea, Clapham, Hampstead, and Highgate – where family homes are still in high demand, there is still discounting but average cuts are very much in single figures.
“We have not paid full price for a property for a while,” said Tom Kain, a partner at Black Brick.
Dell believes that after a long period of denial, vendors have finally accepted that their properties are no longer worth what they might have sold for at the height of the pandemic. Wildly unrealistic pricing is no longer commonplace.
What has replaced it is a more sensible approach – but one which comes with a little wiggle room nonetheless.
“Sellers always add a margin to their asking prices, because they expect buyers to negotiate,” said Dell.
But if asking prices don’t reflect what a vendor really will accept for their property, the question for buyers is how to pitch their bids. The answer is complicated. Bids should be decided upon after a thorough analysis of the property’s pros and cons, recent comparable sales, and the situation of the vendor – how long they have owned the property, their reasons for selling, the offers they have already received and rejected. “London is not a homogenous market,” said Kain. “Even on the same street, one property will be worth more or less than another, perhaps because one side of the street backs onto a railway line. You need to understand the detail to understand the value.”
The most striking news contained in the latest Prime Central London research by analyst LonRes is how quickly for sale signs are building up in the centre of the British capital.
The number of new listings increased by 4.2 per cent compared to April 2024, causing stock levels to rise, and the trend is particularly noticeable at the higher end of the market. The number of £5m+ homes available for sale across prime London, jumped by 23 per cent in the 12 months to the end of April. And it is worth noting that these figures do not even include off market sales, which dominate the top echelons of the market.
While stock supply is mounting, the number of sales is not rising to match it. There were 26.2 per cent fewer transactions in PCL in April than a year earlier, and the number of under-offer properties is also down.
In some ways this is good news for buyers. “There is more choice and less competition,” said Dell.
Basic economics warns that when supply exceeds demand, price falls are likely – but PCL is an unusual market. According to data from the Office of National Statistics, 71 per cent of homeowners across the borough of Kensington and Chelsea own their homes outright, compared to 55 per cent across London as a whole.
“This reins in the prospects of a PCL crash,” said Dell. “The market is not bulletproof, we do get offered one or two receivership sales every couple of weeks for trophy assets in PCL, but it is generally very resilient. So much of PCL is owned by vastly wealthy people without debt that a crash is difficult to conceive.”
The number of billionaires residing in the UK has experienced its most significant drop ever in the last 12 months. The Sunday Times Rich List, which ranks Britain’s wealthiest individuals and families, reports that the total number of UHNWIs has fallen to 156 from 165 in 2024 – the sharpest decline in the list’s 37-year history.
The nosedive coincides with the end of the non dom tax status in April which stripped wealthy residents of tax advantages. Many have voted with their feet and left the UK as a result.
But there are early signs that the Labour Government does wish to welcome the world’s wealthy. Bloomberg UK reports that officials are drawing up plans for a new investor visa which would offer tax incentives to non-nationals willing to invest in the British economy, in particular, those involved in artificial energy, clean energy, and life sciences.
“This is very much needed,” said Dell. “At the moment, there is no straightforward visa route into the UK for wealthy and successful people who will invest.”
Meanwhile, the house building industry is adapting to the new normal. Black Brick has noticed a number of boutique developments very much aimed at wealthy individuals who intend to spend time in London – but no more than 90 days per year.
These developments are in prime locations, they are secure and well managed, but the apartments themselves are modest in size, with two or three bedrooms, and while the buildings have lifts and porters they don’t have the kind of amenities – from spas to swimming pools – that rack up hefty service charges in more traditional luxury buildings.
Black Brick has been named best property advisor in the annual Citywealth Magic Circle Awards 2025 – for the second year running.
The awards have been honouring experts across the field of wealth management for the past 19 years, and are regarded as the Oscars of the finance world.
Karen Jones, founder, CEO and editor of Citywealth, said that multiple global headwinds and political uncertainties have made outstanding advice more important than ever before.
Citywealth Magic Circle Awards 2025 Winners: https://www.citywealthmag.com/magic-circle-awards-results/
Our British buyers are based in the country but wanted to find a London home within a mile of Soho too.
They had begun their search alone and when they first came to us they had earmarked a property they liked. However, after we had inspected the house we advised them not to offer, based on its condition and asking price. We felt we could find them a better home for better value.
These clients were focussed on a freehold property, as they didn’t want to share a building with other residents, and they wanted a home of at least 3,000 sq ft with outside space.
Our search unearthed a beautiful Georgian townhouse which was well over 200 years old but had been recently renovated and modernised. The circa 3,500 sq ft property has five bedrooms, four reception rooms and a private courtyard garden.
Our clients loved the house and Black Brick went on to negotiate a £250,000 discount from the original asking price of £7.75m, and guided them through the buying process with advice about lawyers and other professionals.
Their verdict on the whole experience was that working with Black Brick made searching for a new home “such a pleasure, and just as importantly, great fun”. “Every step has been smooth, efficient, and seemingly stress free (for us!),” they said.
Tucked into the South Hampstead conservation area, the owners of this truly special home have asked Black Brick to manage its off market sale with an asking price of £8.5m.
The 7,600 sq ft-plus Victorian house is in immaculate condition, a perfect blend of original features and contemporary style over five floors. It has a beautiful 76ft garden with outdoor kitchen and barbecue, and secure gated parking. It is a true family home with seven bedrooms and eight bathrooms, plus amenities including a gym, cinema room, games room and swim spa.
Its lower ground floor is a self contained apartment, perfect as guest accommodation or a nanny suite.
The property is close to some of London’s highest rated independent schools, South Hampstead High School and University College School, and also within a short walk of the American School in London. The restaurants and cafes of West Hampstead are on the doorstep of this quiet residential street where Mark Carney, the Canadian Prime Minister, lived when he was Governor of the Bank of England.
For further details or to arrange a viewing please contact: Camilla.Dell@black-brick.com
We would be delighted to hear from you to discuss your own property requirements. For a non-obligatory consultation, please contact us.