Godson des Forges' January outlook

Like an aged Peugeot in the early 1980s, the January property market in Prime Central London takes time to warm up. The cold and dark mornings are rarely inspiring, but we British bask in the unfettered happiness that we gain an extra minute or two of light each morning. We savour the small things in life.

I wrote this on the same date as last year’s missive, and there’s a feeling of Groundhog Day regarding our London property market predictions. Quite simply, we are expecting more of the same. The chorus of the great Del Amitri song “Nothing Ever Happens” comes to mind, summing up the 2024 Prime Central London market movement when comparing then and now. Comfortingly, this sentiment aligns with Lonres’ research, which noted: “After all that happened in 2024, new figures show the Prime London sales market ended the year roughly where it started.” The needle returns to the start of the song, and we all sing along like before.

This time last year, we had a General Election to face. This year, we have a much clearer path, with fewer events on the horizon to disrupt what will likely remain a steady market. In our October report, we awaited the Budget, which, in our view, could have been far worse. The CGT threshold wasn’t changed – a relief, as this incentive helps drive second homeowners to sell. However, the raising of the ‘second home’ tax from 3% to 5% (on top of the standard Stamp Duty Land Tax (SDLT)) felt like a step too far, flogging an already over-exploited revenue source. Time will tell if this becomes counterproductive for the Treasury. The knock-on effects on landlords, developers, and holiday homeowners – a group seemingly despised by successive governments – will undoubtedly be felt.

The changes to the Non-Dom status and their potential impact on both prime property sales and one-way journeys out of Farnborough Airport remain uncertain. However, as with many concerns surrounding the so-called "great exodus," we suspect the reality won’t match the hysteria. These changes may primarily affect discretionary buyers, but as we’ve observed, the now entrenched high Stamp Duty rates in the London property market were the original demon. Non-Dom changes are simply another consideration to whether the UK remains attractive for high-net-worth individuals (HNWIs). The question will be if the demand on their wealth outweighs the appeal of making the UK their home. The Prime London lettings market may benefit, offering greater flexibility without the burden of property taxes—assuming there are any landlords left to meet the demand.

With few reasons for seismic changes to the 2025 Prime London property market, we’ll welcome any factors that inspire greater transactional movement. A fall in UK interest rates could be one such factor. The great reveal of the monthly inflation figures is now met with the sort of trepidation seen on the faces of the contestants on Bruce Forsyth’s Play Your Cards Right (I’m showing my age), in the hope we see the numbers go the right way. Meanwhile, a weak pound may entice international buyers to take advantage of currency fluctuations, boosting demand in high-end property markets.

To conclude, the Prime Central London property market is in pretty good health—resilient, even. A well-worn word, but appropriate. Transactionally, we are significantly up on this time last year, with Lonres reporting the volume of sales were up 4.9% in 2024 compared to 2023. It is still early to say whether this trend will continue, but we remain committed to advising our clients on how to position themselves to adapt to whatever happens this year. Chances are, we will have seen it before…

Please do get in touch if you’d like to have a chat about selling your property - we’d love to help.