High-end agency Savills says average values across prime central London remain suppressed (-0.8% in the final quarter of 2024), as the impact of the Budget is felt in locations with the highest concentrations of wealth, and a more international buyer base.

Those factors weighed heaviest in the markets of Knightsbridge (-2.0% in the quarter), South Kensington (-1.6%) and Belgravia (-1.5%). Meanwhile, pricing in the markets of Marylebone and Notting Hill withstood the downward price pressures. In total, PCL prices are down -20.7% on their 2014 peak.

“The cautious mentality that we observed ahead of the 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” says Lucian Cook, head of residential research at Savills.

“Generally, needs-based buyers have underpinned market activity post-Budget, as they have benefited 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.

“However, prime central London locations remain the most price sensitive, as buyers and sellers adjust to the winding down of the ‘non-doms’ tax regime and the new SDLT surcharge for second home purchases. We expect market conditions to remain challenging in central London next year as the impact of these changes continues to be felt.”

Savills expects prime central London values to fall by -4.0% in 2025 (and +9.6% over the next five years) as the as the market finds its level in a changed fiscal and regulatory environment.

But outer prime London values are expected to remain flat (0.0%), with stronger growth forecast over the next five years (+14.7%), as this market is expected to see a ripple of demand from central areas as affluent upsizers react to higher school fees.

Beyond London, values continue to ease, with prices falling by a marginal (-0.2%) on the quarter, taking total price falls for 2024 to (-1.0%), significantly lower than price adjustments experienced in 2023 (-4.6 across prime regional markets).

However, values remain +9.6% up on the pre-pandemic average.