Market Insights January 2025

With 2025 now firmly underway, please see below our January Market Insights outlining the key themes emerging in the prime central London property market.

The team and I would be delighted to discuss any property search or property management requirements you may have, so please don’t hesitate to get in touch.

Best wishes

Jo Eccles

Founder and Managing Director, Eccord

+44 (0) 20 7244 4482

jo.eccles@eccord.com

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Prime London market set for a more stable 2025

Last year’s property market was heavily impacted by the uncertainty caused by global elections and the UK Autumn budget. A lot of decisions were put on hold, but with more certainty globally, we’re seeing a renewed focus and decisiveness amongst our clients. 

This was evident in the final quarter of 2024, where certainty was embraced by some, with a flurry of 128 properties (new-build and second-hand) selling above £5m, an 8% year-on-year increase. From what we’re seeing on the ground since the start of this year, the renewed focus – from buyers and sellers – looks set to continue.  

Considerable changes to interest rates are now unlikely this year, and while this will impact transaction volumes and potential price growth – alongside the ongoing barrier of stamp duty costs – some buyers who have been holding out in the hope of cheaper borrowing are now pressing ahead with their plans. 

In recent weeks we have been instructed by a wide range of buyers including internationals relocating to London, domestic families moving for school places which will be announced next month, bank of Mum and Dad buyers, and entrepreneurs buying trophy properties following wealth events.

Supply is building steadily, with new sales listings higher this month than any January in the past four years. Buyers continue to prioritise immediacy, which is driving demand for turnkey properties - and while we’re seeing some appetite for refurbishment returning as building costs ease, the two-tiered market looks set to remain with a significant price divergence between the premium being paid for turnkey homes and the rest. 

A significant proportion of best in class homes are continuing to sell off market – as an example, 14 of the 17 houses we have shown to a client searching in Notting Hill and Kensington with a budget of £15m - £25m have been off market or direct approaches. 

Whilst nobody knows for certain what the market has in store, as illustrated by the wide-ranging forecasts issued by the major estate agents, a number of significant transactions and news that a Norwegian oil fund has acquired a large chunk of Mayfair in a deal worth over £300 million is a notable vote of confidence in the future of prime London and its long-term appeal to investors.

Non-doms back London for next generation

Headlines last week described an exodus of wealth from the UK, with a recent report citing that a dollar millionaire had left Britain every 45 minutes last year. Whilst this is a fairly startling statistic, context is key, and the report related to anyone leaving the UK with investable assets of USD 1 million or more. 

In reality, the situation is far more nuanced and a lot of those at the lower wealth end are moving for general life reasons such as relocation for work and so on. UHNWs are undoubtedly leaving, but the numbers aren’t as dramatic as the headlines suggest. The recently announced plans to soften the non-dom changes are unlikely to make a significant change to exit plans, and we suspect the true impact will not be clear for a number of years.

Of those who are deciding to base themselves elsewhere, we are seeing appetite from them to buy here for the next generation. Parents are buying for grown up children typically between £2m to £10m in areas such as Chelsea, Mayfair, Notting Hill and Bayswater, and our Home Management team has been appointed on a number of properties to ensure they are professionally managed and maintained.

Of those exiting, some have already done so or are in the process. There are a considerable number though who are yet to make a firm decision about which location to move to, or they’re struggling with logistics of the move, for example finding suitable accommodation in the new location. Geneva and Milan are proving particularly challenging. 

Appetite for smaller London bolt holes has been strong throughout January where buyers are selling larger properties, either in London or the countryside, but want to retain a London base. To give some context, one prime Belgravia agent reported that of 22 properties they currently have under offer, 19 are below £3m.

US buyers capitalise on currency discount

Buyers from the US continue to move against the tide, since the US is virtually unique in imposing worldwide taxation on its citizens regardless of where they live. Demand from American buyers has been building steadily during the last 12 – 24 months and they now account for almost 30% of our clients. London’s culture, world-class education system and strong legal and financial framework are a powerful draw, as well as the absence of gun crime.

Where Americans typically used to rent for prolonged periods before putting down roots, they are now exhibiting a new decisiveness and committing to purchases straight away. Currency discounts of 10% are a motivating factor driving this trend. They fall largely into two categories: buyers spending £2m - £6m on a London base, and families relocating and putting down long term roots in London with budgets of £10m upwards.

On a property viewing tour with an American buyer last week, after running through the considerations of buying here versus other global cities, he stated, “there’s only one London,” which succinctly sums up the perspective of many HNWs as they weigh up their options.

We have also had our first client seeking a rental home in London as a result of the LA wildfires. Whilst their own LA home was undamaged, they are concerned about the immediate health implications of breathing toxic smoke and the decimation of the community, which will take years to recover and rebuild. 

Rise of the hybrid ‘two-way’ agent

The fragmentation of the London property market appears firmly here to stay, with corporate estate agents continuing to lose top performers to smaller independent firms. This is arguably the biggest shift in the property market over the past two decades, and self-employed estate agents and property brokers grew their market share by 44% last year in the £1m plus price range. 

This trend is making the buying process increasingly complex and even harder for buyers to exhaustively search the market.

For example, we recently acquired a super prime best in class house for a client through a one-man band called William, and our clients asked, “Who is William?!”. This is an increasingly common situation, where we are acquiring properties through unknown agents – so much so that in the past 3 years, two thirds of the properties we have purchased have been via agents our clients have never heard about and wouldn’t have known to contact had they been searching alone. 

We now typically speak to a minimum of 50 individual agents and brokers during a property search to ensure we have uncovered and explored every potential on and off market property opportunity. To give context, in one recent property tour across Notting Hill and Kensington,16 of the 18 properties we showed our client between £15m - £25m were off market or direct approaches.

To complicate matters further, we are also seeing a blurring of the lines between buying and selling agents, leading to a rise in hybrid ‘two-way’ agents who represent clients on both sides. Growing numbers of selling agents are offering to represent buyers with their search, as well as many buying agents now also acting as sales agents. But the challenge they face is that they are deemed competition by other estate agents, who won’t show their best stock to anyone competing on their turf.

We have seen some buyers choose to go down the ‘free option’ of having a selling agent doing the legwork for them, or using buying agents who also sell properties, only for them to return 6 – 12 months later not having achieved the results they’re looking for. 

Remaining exclusively on one side of the fence – in our case, buy side only representation – is therefore becoming increasingly important. We have seen a number of selling agents come unstuck or lose out on bids because they’re not geared up or experienced enough to act on the buy side during complex and highly emotive purchases. Or buying agents who aren’t being notified about the most discreet properties for their clients, because they’re now deemed competition by the selling agents.