Property | 6 May 2025
Coutts London Prime Property Index – Q1 2025 Update
As we progress through 2025, the prime London property market has shown localised shifts in pricing and buying behaviour. Below, we provide a comprehensive overview of the latest trends based on data from the first quarter of the year. Dollar buyers especially could be poised to take advantage as discounts rise alongside supply.
Pricing
- In Q1 2025, average quarterly prime London property prices have experienced a decline of 2.6%. This drop positions prices 1.6% below the equivalent period last year and 10.8% beneath the market peak of 2014.
- Some markets, such as Knightsbridge & Belgravia, showcase far more pronounced discrepancies, with pricing still over 20% below the height of the market in nominal terms. That translates as a discount of over 40% in inflation adjusted terms from the peak of 2014. Dollar buyers are getting a ~40% discount in nominal terms given GBP/USD is also down ~20% compared to the peak of 2014.
- In contrast, King’s Cross & Islington reached peak pricing this quarter, with the average price per square foot reaching £1,683 on Q1 2025 sales.
Sales activity
- Although sales volumes are up 4.4% annually, this figure remains 12.9% below the 10-year average, indicating a market lacking urgency.
- Much of the current activity is being driven by needs-based buyers, those looking in traditional family homes markets, in outer-prime markets such as Battersea, Clapham & Wandsworth and Wimbledon, Richmond, Putney & Barnes.
- Moving forward, affordability and mortgage rates will be pivotal in shaping market performance, particularly in more domestic, outer-prime London markets. Recent economic uncertainty as a result of recent US tariff adjustments is likely to negatively impact buyer sentiment, but it may also positively impact interest rates. This could lead to more competitive mortgage rates, which should in turn bring more buyers back to the market.
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