What’s Happening in the London Property Market in 2025?

The London property market has seen a lot of changes this year. From tax updates to shifts in buyer behaviour, 2025 is shaping up to be an interesting time for homeowners, buyers, and investors. Whether you’re looking to move, invest, or sell, staying informed can help you make smart decisions. Here’s a clear breakdown of the most important updates and trends in the market right now.

House Prices Are Holding Steady

After a bump in activity earlier this year, mostly due to changes in stamp duty (the tax paid when buying property), prices in London have started to settle. On average, house prices in the city haven’t changed much overall. But this doesn’t mean every area is the same.

In some of London’s most expensive postcodes, like Kensington and Chelsea, prices have dropped more sharply, by up to 15% in some cases. On the other hand, more affordable or upcoming areas like Battersea and Wandsworth are seeing steady demand and even small price increases.

Less Interest from Overseas Buyers

One of the reasons for falling prices in central London is the drop in international buyers. New tax rules and global changes have made some overseas investors think twice. However, interest from the US is growing, which could help balance things out.

If you’re buying or selling in high-end areas, it’s more important than ever to get expert advice. Central London estate agents know how to price properties correctly and attract serious buyers in today’s slower luxury market.

More People Renting or Delaying Big Moves

With mortgage rates still high (though expected to drop later this year), many people are choosing to rent or wait before buying. Those who are buying are often first-time buyers or people moving within London, rather than upsizing to bigger homes.

This means homes with flexible layouts (like space for a home office) and outdoor areas are still in demand. Sellers who make these features stand out are more likely to attract attention.

Construction of New Homes Is Slowing Down

A shortage of new homes is also a big issue. Fewer new builds are being started across London, especially in prime areas. This could lead to a housing shortage in the future, pushing prices up again if demand returns.

For buyers looking at new homes, this means there’s limited choice. And for investors, it could be a chance to snap up well-located properties before prices rise again.

Super-Prime Properties Still Show Opportunity

At the top of the market, homes priced over £10 million (super-prime) are sitting empty more often than not. This has led to larger discounts and opportunities for serious buyers or investors who can negotiate.

While it’s a smaller part of the market, those looking for luxury properties can find value now, especially with guidance from experienced Central London estate agents who understand the unique nature of these sales.

What to Expect Next

Experts think the second half of 2025 will be more positive. With interest rates expected to drop and buyer demand slowly picking up, London could see small price increases of around 3% over the year. Outer-prime areas (like Clapham or Queen’s Park) are showing the most resilience, while prime central postcodes are still under pressure.

Final Thoughts

The London property market is always changing, but right now it’s especially important to stay informed. Whether you’re buying, selling, or just keeping an eye on the market, working with trusted Central London estate agents can give you the local insights and guidance you need.