30th September 2025
9mins
With the budget looming, confidence in PCL unsurprisingly failed to blossom over the summer. Savills estate agents blames “unprecedented levels of speculation” about the possibility of tax hikes for throwing the market into a state of suspended animation. As a result, prices dropped 1.8 per cent in the third quarter of this year, contributing to an annual fall of 4.7 per cent. Values in this most rarefied market now sit -24% below the 2014 market peak.
Knight Frank, meanwhile, reports that prices have now fallen by 18 per cent in the past decade and has revised its price forecast for PCL downward.
In May, Knight Frank thought prices would be completely flat in 2025. Now it is projecting a four per cent fall. And it does not expect any quick relief, with price forecasts for 2026 dropping from three per cent to zero growth.
While nerves are certainly getting the best of some prospective buyers, others clearly see the current situation as an opportunity not a crisis. “We are receiving calls from some clients who are saying now might actually be the right time,” said Camilla Dell, managing partner at Black Brick. “For the brave that are willing to transact, it could be a smart time to buy because it is certainly a buyers’ market.”
While much of London’s property market is stuck in the doldrums, a trio of Zone 2 neighbourhoods have been named as London’s newest seven figure urban villages.
The average sale prices in South Hampstead, in north London, and Ravenscourt Park and West Putney, to the east, have broken through the £1 million ceiling in the past 12 months according to Savills.
The growth is being driven by family buyers rippling out from more expensive areas – South Hampstead is only a mile down the hill from Hampstead. Ravenscourt Park is a single tube stop from Hammersmith. And East Putney sits between two more expensive hotspots – Putney and Richmond.
As well as relative value, all three also offer period houses, easy access to excellent schools, good transport links to central London, and varied, vibrant high streets.
“Without a doubt, the £1m to £2m market for terraced houses in areas like this, is the busiest part of the market in London,” said Tom Kain, Partner at Black Brick. “The buyers are successful young professional couples, probably both working, and they have often rented for longer and saved up so that they can buy a family home rather than a flat.
“When good properties come up for sale, there is competition for them.”
While savvy domestic buyers are busy snapping up prime properties at straitened prices, London’s luxury rental market is also enjoying a boom, this time driven by international tenants.
A report by PCL agent Beauchamp Estates found that 1,588 deals to rent properties for £1,000-plus per month were signed between January and June of this year, a 154 per cent increase on the same period in 2024.
Americans, many of them fleeing the increasingly alarming political landscape back home, are leading the rental charge, taking on long term family homes in Mayfair, Notting Hill, Kensington, and Chelsea. Middle Eastern tenants are also active, looking for long and short term rentals in Mayfair, Knightsbridge, and Belgravia.
Buy-to-Let investments have been a hard sell in recent years, with increases in Stamp Duty and an end to mortgage interest relief, making it challenging for landlords to turn a profit and the incoming Renters Rights Bill, making it harder for landlords to evict tenants when they please.
And, since Black Brick was founded in 2007, high entry costs and buying costs mean that yields in PCL have been unappealingly low at two to three per cent.
But over the past couple of years, the goal posts have moved. Prices have fallen and rents have risen – ironically in part because many dissatisfied landlords have exited the sector over the past decade reducing stock levels.
As a result, Black Brick is now seeing yields of four to six per cent. “We are also starting to see enquiries from investors – in one case, an investor from Asia looking to invest up to £120m in London – who can see that it is starting to make sense,” said Dell.
And while capital growth, in the short and medium term, is unlikely to be significant, rents are set to increase by 21.1 per cent between now and 2029, according to Knight Frank.
Meanwhile, and for the same reasons, long-term London residents who have always rented are now calculating whether it might make better financial sense for them to buy if they intend to remain in London.
Britain’s antiquated buying system is in the spotlight after PCL analyst LonRes reported that the number of deals which fell through in August was up almost 14 per cent, compared to the same period of 2024.
Losing a sale – whether you are a buyer or a seller – can be not only heart breaking but expensive, as often both parties have spent heavily on reports and legal advice before the plug is pulled.
According to a new study by lender Santander, almost one in four sales agreed in the UK never reach completion, which Dell blames partly on the current uncertainty over buying and selling taxes, with the Government considering a national sales tax for properties traded above £500,000.
Another issue is the sheer time it can take to conclude a deal, which Kain feels gives those involved a little too much time to worry and talk themselves out of a perfectly good deal. “Often, it is the inefficiency of lawyers, surveyors, and banks,” he said. “When someone agrees to buy a property, there is great momentum, on both sides. There is a desire to get things done. But people then have weeks and weeks to think about it and read the news, and more and more chance of it not happening.”
Dell believes her buyers are less likely to get cold feet, simply because so much work has gone into studying the local market and recent sales before making an offer – clients feel confident that they are offering a sensible price.
Black Brick also works hard to keep the whole, often treacly, process moving, keeping all interested parties informed and politely chivvying slowcoaches to keep deals moving in the right direction. Black Brick clients also benefit from introductions to a trusted network of best in class conveyancing lawyers, surveyors, valuers, lenders, tax advisors and a whole host of other specialists.
Much has been written about the end of the Non Dom tax system and the exodus of the world’s wealthiest men and women from the British capital. But a study by Savills, in the form of a survey of wealth managers, suggests that while these UHNWIs may choose to reside in more tax-friendly climes, they are hanging on to their London homes. Just over two thirds of those questioned said their departing clients were retaining their London portfolios.
This leaves owners with a difficult conundrum – what to do with the real estate they are leaving behind? Simply locking up and leaving is not a long term strategy and can lead to insurance issues, and while renting can be lucrative it is also complex and time consuming.
Which is where Black Brick comes in. We offer a property management service for absentee owners, providing them with peace of mind that their empty properties are being taken care of while they are out of town, as well as a property management service to take the stress out of managing a rental property.
Our clients are based in the Czech republic and were keen to help their London-based daughter, married and with a young child, buy a family home.
Flexible on location and open minded about property style, Black Brick previewed a record 140 properties all over central and west London for them. We then viewed around 40 before helping them settle on a house in buzzy Chiswick, with its good schools and transport links. It was being sold off market so did not appear on any of the property portals.
The property was fully renovated which meant that this young family didn’t have to worry about building work. And, as a testament to just how strong the sub £2m family home market is, we advised them to pay the guide price, which breaks down to £1,333 per sq ft, to secure the house against another bidder.
As well as buying homes for clients, Black Brick also has a specialist managed sale service. This particular sale was close to our hearts since we had sourced the stunning loft-style apartment for our clients in 2008, a year after we opened.
After almost 20 years, our client got back in touch. She was moving to Bath, to be closer to friends and family, and the time had come to sell the apartment.
The London sales market is tough right now, with a surplus of supply and not enough demand to go around. Pricing correctly was crucial, and our client followed our advice to the letter. As a result she found herself with multiple bids, and eventually sold the property to a cash buyer who offered £200,000 over the guide price.
Our clients were relocating from Singapore and needed a family home in a family-friendly neighbourhood. Their preference was for north London, close to their children’s school and with good commuter links, and they wanted to find a house in good condition.
London’s rental market is currently extremely competitive, with very few houses on offer, but we were able to unearth a treasure – a newly-renovated four bedroom villa on a prime street less than quarter of a mile from the local tube station. Because of our local contacts we were able to view the house before it was even listed and snapped it up before it went onto the market. Our offer was particularly appealing because our clients were able to commit to a three year tenancy.
We would be delighted to hear from you to discuss your own property requirements. For a non-obligatory consultation, please contact us.
