Prime London property prices are presenting some of the most attractive discounts in over ten years, with savvy landlords and investors seizing opportunities in a shifting market. According to Savills, the combination of an abolished non-doms tax regime and an increased stamp duty surcharge on additional homes has contributed to declining prices across Prime Central London (PCL).
However, experts suggest that the current environment is ripe for investment, with values expected to stabilise by the end of 2025.
Value-conscious landlords find opportunity in prime London
According to Lucian Cook, Head of Residential Research at Savills, the landscape of Prime Central London’s property market is evolving but remains resilient. “The abolition of the non-doms tax regime and imposition of an increased stamp duty surcharge on additional homes sits firmly behind a further easing in prices in central London,” Cook explained.
Despite these changes, Cook emphasised that price reductions have been relatively limited by several factors, including pre-existing value. “Compared to the pre-downturn peak of the market, prices are in a similar position to those last seen in 2009 and 1992, when values had fallen by 25% and 22%, respectively,” he added.
While prices have eased, Cook highlighted that there hasn’t been a flood of stock entering the market. “Despite some owners becoming non-resident for tax purposes, we haven’t seen a lot of stock hit the market. Our clients are broadly keen to keep a base in London, especially given the backdrop of global geopolitical uncertainty.”
Savills projects that Prime Central London prices will bottom out this year, with a predicted readjustment of -4.0% by the end of 2025. Cook expects the majority of declines to occur during the first half of the year.
Domestic demand offers stability to the market
Not all areas of London have been equally affected. Notting Hill emerged as a standout performer, maintaining stable prices over the past year. Cook noted, “Domestic buyer demand has been supported by the interest rate cuts that have already occurred.”
Prime London neighbourhoods such as Hackney (+4.9%), Putney, Wimbledon, and Islington (all at +3.0%) have demonstrated resilience. Cook added, “The prospect of lower debt costs later in the year hasn’t provided a great deal of urgency among prospective buyers, but demand remains steady.”
Interestingly, the broader capital’s prime housing market remained firm throughout the first quarter of the year, with annual price growth at 0.7%.
Outside of London, the picture is more varied. Prime property prices across the Midlands and North showed modest 0.9% annual growth, making these areas a viable option for landlords looking for solid investment opportunities.
Regional hotspots and school catchment areas continue to shine
Regional markets continue to display varied performance, with prime property prices down by -1.1% on an annual basis. However, certain areas remain highly desirable, particularly those with strong educational infrastructure.
Three of the top five performing locations — Tunbridge Wells, Sevenoaks, and Lincoln — are renowned for their grammar schools. According to Savills, these areas are performing well despite broader regional challenges.
Cook commented, “VAT on school fees has generally tempered demand, with some buyers sitting on their hands as they work out the impact on their household finances. But on a local basis, hotspots are continuing to outperform, especially places that provide strong state schooling or access to less expensive private education.”
By contrast, more discretionary coastal markets — often popular for second homes — have seen annual declines of -4.6% as they absorb an additional 2% stamp duty surcharge.
Landlords encouraged to seize rare investment opportunities
The current market landscape presents an opportunity for landlords to capitalise on discounted property prices in London’s most prestigious areas. As Cook noted, “Our expectation that prices in Prime Central London will bottom out this year remains.”
With interest rate cuts already in play and predictions of lower debt costs later in the year, landlords have the potential to secure properties at exceptional value before the market adjusts.
London’s prime property market remains attractive for those looking to secure a foothold in one of the world’s most desirable cities. While recent changes in taxation and global conditions have affected prices, the underlying appeal of central London real estate endures.
The key takeaway for landlords is clear: The current discounts in Prime Central London are unlikely to last. For those willing to act decisively, the rewards could be substantial as the market stabilises.
