Prime London Positivity

Property platform LonRes has just released its March briefing, which reveals encouraging trends for the prime London residential property market. Despite ongoing economic uncertainties, the market is showing resilience, and could be reflective of increased confidence among both domestic and international buyers. Fuller Gilbert takes a brief look at the key insights from the LonRes report.

Prime London Housing Market Update: February 2025

February 2025 marked a notable turning point in the prime London housing market, with positive signs emerging after a period of slower activity. Key highlights include a recovery in the £5m+ market, a slight rise in average house prices, and continued growth in the number of properties for sale.

Market Recovery & Price Growth

For the first time since June 2023, average house prices across prime London rose on an annual basis, up by 0.6% compared to the same month last year. Although prices remain 1.2% below pre-pandemic levels (2017-2019), this modest increase signals a recovery in the market.

Despite rising supply, the number of transactions was slightly down by 8.4% compared to February 2024, yet still above pre-pandemic averages.

More promisingly, the number of properties "under offer" increased by 11.0% compared to last February, suggesting that demand remains strong.

Stronger £5m+ Market

The high-end market, particularly homes priced at £5m+, showed resilience in February, rebounding by 13.8% in transaction volumes compared to the previous year. This was a welcome recovery after a slow January, with new instructions in this segment up by 30.0%.

Supply of £5m+ properties has also increased significantly, with stock 21.1% higher than in February 2024. Over the past year, sales at this price point were 33% above the pre-pandemic average.

Lettings Market: Mixed Performance

In the rental sector, average rents across prime London grew by 6.0%, marking the highest annual growth since November 2023 and 33% above the 2017-2019 pre-pandemic average. However, activity in the lettings market remains subdued, with a 42.1% drop in lets agreed and a 29.4% fall in new instructions compared to last year.

Rental property stock also declined by 19.9%, indicating ongoing supply constraints.

Continued Growth in Market Supply

New instructions across prime London were 24.0% higher than in February 2024, and 47.5% above the 2017-2019 average. As a result, buyers now have more options, with stock on the market growing 11.6% compared to the previous year.

Having said that, the increase in supply has outpaced demand, contributing to a higher rate of price reductions, up 35.0% compared to February 2024.

Looking Ahead: A Promising Outlook for 2025

The prime London market is showing signs of recovery, particularly in the £5m+ segment. While the broader market remains mixed, February's performance provides a positive foundation for the rest of 2025, with higher levels of stock, moderate price increases, and increased buyer interest. The outlook remains cautiously optimistic, especially as more properties come to market and transaction volumes continue to stabilise.

Source: https://lonres.com/public/monthly-briefing-prime-london-market-march-2025/