Is Prime London Entering Its Next Chapter?
Summer 2025 is drawing to a close, and while the weather may be cooling, London’s prime property market is just starting to heat up in new and unexpected ways.
Sales Slow, But Sellers Hold Their Ground
The first half of 2025 was not exactly a triumph for the Prime London sales market. Transactions dropped by nearly 25% in Q2 compared to last year. At first glance, that seems bleak—but it hides the bigger story.
Much of that drop was due to a Q1 rush, as buyers scrambled to beat the March stamp duty rise. Under-offer activity picked up in June, suggesting that demand isn’t gone—it just shifted.
Sellers, however, aren’t caving. Many are holding firm on prices, especially those who bought at a peak and haven’t seen strong capital growth since. The result? A market in standoff mode, with growing supply and selective buyers.
More Listings, But Little Panic
One of the clearest trends this summer is the rise in new instructions. Compared to Q2 2024, listings are up nearly 9%—and compared to pre-pandemic norms, a whopping 46%. But more homes on the market doesn’t mean panic.
Interestingly, achieved sale prices haven’t taken a hit. In fact, price growth in Prime Central London (PCL) turned positive for the first time in two years—up 1.5% annually. Across all prime areas, the average discount to asking price sits at 8.5%.
So while sellers are dropping asking prices more frequently to attract attention, actual selling prices remain resilient.
Super-Prime Shifts: A Market Reset?
At the very top of the market (£5m+), the story echoes the broader market—more stock, fewer sales, and higher discounts.
Still, this segment isn’t in crisis. It’s adjusting. Discounts on £5m+ homes have crept up slightly to 12.2%, and while sales are down 14.6% year-on-year, new supply is flowing in—a sign that confidence hasn't evaporated.
Is Prime Central London (PCL) Undervalued?
In a fascinating section of the report, the research team asks a bold question:
“Is PCL good value?”
Looking at house price movements over the past decade, central London has clearly underperformed both suburban and regional markets.
Back in 2015, £1 million might have bought you a compact flat in Mayfair or a family house in Richmond. Fast forward to 2025, and that same flat is worth less, while the Richmond house costs significantly more.
This shift means that those who left central London in the past decade may now find it more affordable to return—a potential tailwind for PCL over the next few years.
Lettings Market: Demand Grows, Rents Rise
While sales have been sluggish, lettings are booming. Prime London rents rose 5.5% in Q2 year-on-year—8.4% in PCL alone.
More properties are hitting the rental market, but demand continues to outpace supply, particularly in the super-prime sector (£5,000+ per week). That segment has grown 25% in stock since last summer.
The rental market is also feeling the impact of affordability. With stamp duty and economic uncertainty weighing on high-end buyers, renting is becoming the pragmatic choice—especially for international executives and short-term expats.
A Market Looking for Direction
Overall, the tone of the summer update is one of cautious recalibration:
Key Takeaways:
Summer 2025 is drawing to a close, and while the weather may be cooling, London’s prime property market is just starting to heat up in new and unexpected ways.
Sales Slow, But Sellers Hold Their Ground
The first half of 2025 was not exactly a triumph for the Prime London sales market. Transactions dropped by nearly 25% in Q2 compared to last year. At first glance, that seems bleak—but it hides the bigger story.
Much of that drop was due to a Q1 rush, as buyers scrambled to beat the March stamp duty rise. Under-offer activity picked up in June, suggesting that demand isn’t gone—it just shifted.
Sellers, however, aren’t caving. Many are holding firm on prices, especially those who bought at a peak and haven’t seen strong capital growth since. The result? A market in standoff mode, with growing supply and selective buyers.
More Listings, But Little Panic
One of the clearest trends this summer is the rise in new instructions. Compared to Q2 2024, listings are up nearly 9%—and compared to pre-pandemic norms, a whopping 46%. But more homes on the market doesn’t mean panic.
Interestingly, achieved sale prices haven’t taken a hit. In fact, price growth in Prime Central London (PCL) turned positive for the first time in two years—up 1.5% annually. Across all prime areas, the average discount to asking price sits at 8.5%.
So while sellers are dropping asking prices more frequently to attract attention, actual selling prices remain resilient.
Super-Prime Shifts: A Market Reset?
At the very top of the market (£5m+), the story echoes the broader market—more stock, fewer sales, and higher discounts.
Still, this segment isn’t in crisis. It’s adjusting. Discounts on £5m+ homes have crept up slightly to 12.2%, and while sales are down 14.6% year-on-year, new supply is flowing in—a sign that confidence hasn't evaporated.
Is Prime Central London (PCL) Undervalued?
In a fascinating section of the report, the research team asks a bold question:
“Is PCL good value?”
Looking at house price movements over the past decade, central London has clearly underperformed both suburban and regional markets.
Back in 2015, £1 million might have bought you a compact flat in Mayfair or a family house in Richmond. Fast forward to 2025, and that same flat is worth less, while the Richmond house costs significantly more.
This shift means that those who left central London in the past decade may now find it more affordable to return—a potential tailwind for PCL over the next few years.
Lettings Market: Demand Grows, Rents Rise
While sales have been sluggish, lettings are booming. Prime London rents rose 5.5% in Q2 year-on-year—8.4% in PCL alone.
More properties are hitting the rental market, but demand continues to outpace supply, particularly in the super-prime sector (£5,000+ per week). That segment has grown 25% in stock since last summer.
The rental market is also feeling the impact of affordability. With stamp duty and economic uncertainty weighing on high-end buyers, renting is becoming the pragmatic choice—especially for international executives and short-term expats.
A Market Looking for Direction
Overall, the tone of the summer update is one of cautious recalibration:
- Buyers are hunting for value but aren’t rushing.
- Sellers aren’t slashing prices en masse.
- Lettings are supporting the top end of the market.
- And PCL may be primed for a comeback—if expectations align.
Key Takeaways:
- Sales down 25% in Q2, but under-offers rebounded in June
- Listings up 9% YoY and 46% above pre-COVID norms
- Super-prime discounts rising slightly to 12.2%
- Lettings market strong, with rents up 5.5% across prime London
- PCL may be undervalued relative to the outer boroughs