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When will the London market finally turn the corner?

March 2025

The London market peaked in April 2014. Some properties sold comfortably just prior to that date, but from May 2014 until today, the London market never retained its traditional joie de vivre. The yawning gap between what you could sell for in London and buy in the countryside has narrowed markedly.

Normally an investment, like residential property, if held for 10 years would be safe from the ups and downs, but now in March 2025, the London market continues to struggle. In real terms some properties bought in April 2014 have actually lost money. The first properties to be hit were those that were the most expensive and those which had negatives you could not rectify with money. So a six storey house with no lift, priced at £10m backing onto a railway line was destined for a massive drop. This concertina effect continues down the price scale and the malaise has infected the broader market sub £2m.

The tail winds were and are broad: Inflation remains stubborn and so mortgage costs remain high after the genie was let out of the bottle by Liz Truss and Donald Trump’s latest tariffs will not help. Stamp duty is still a massive stumbling block and the war on foreign buyers and second home ownership have cut a significant core of demand. Covid gave us the notion that work could be achieved “elsewhere” and Brexit hit European interest. Even ULEZ has made the joy of living and working in London more of a chore, while VAT on school fees and the cost of living crisis has dampened demand. Demand for flats as a result of Grenfell disaster has dropped while some latest developments along the river Thames have service charges of an eye watering £35,000 per annum. The London market was a little like an Elon Musk rocket, bursting with energy at the start, but destined for a fall once the fuel had run out. The only difference being a soft landing rather than a catastrophic crash. All in all, there isn’t much supporting prices in the London market beyond a lack of supply of good quality housing.

So what next? There is some confidence that inflationary pressures are on a downward trend and that the wars in Ukraine and Gaza may end in the short to medium term. Both are helping to rekindle confidence that the worst is over. However, those that try to “time” their purchase at the bottom of the market may end up being too late. The time to buy is when sentiment is at its worst. But when confidence returns, as it surely will, sellers will no longer be prepared to drop and the potential to haggle the price down lost.

Hanslips helps buyers target those motivated sellers at the best (lowest) possible price, enabling buyers to make a safe investment and not one they wished they had never bought. It is worth remembering, whatever you buy today you should be able to sell tomorrow.