A positive shift in London property: Trends and opportunities for 2025

A latest study by Rightmove suggests a modest price increase in London house prices in October 2024, with new sellers raising their asking prices by 0.3% (+£1,199). Despite this slight growth, buyer engagement is robust, showing a remarkable 29% increment in sales agreements compared to 2023’s slower market.

Increased demand

Buyer interest in the London property market remains high, evidenced by a 17% year-on-year rise in inquiries made to estate agents. Housing stock availability per estate agent has risen by 12% — the largest increase in a decade. This trend reflects expectations of possible interest rate cuts, along with wage growth likely to outpace house price inflation – making 2025 look promising for buyers and sellers. This trend now throws the ball in the investors’ court.

Positive house growth

House prices in London have marked an average increase of 3.2%, a silver lining in the property market after the past two years. So, what does this mean for buyers and sellers in London?

This growth, while modest, is boosted by rising wages and more affordable borrowing costs — encouraging buyers and sellers to re-enter the market with renewed confidence. Mortgage approvals and monthly transactions have also been at their highest levels since 2021, pulling many sellers back into the market after a slight period of hesitation.

Stamp duty on additional properties

Amidst discussions over potential tax hikes, the recent budget maintained Capital Gains Tax (CGT) rates for residential assets at 18% and 24%. While first-time buyers are exempt from increased stamp duty, investors buying additional properties, including buy-to-lets or holiday homes, face a surcharge increase from 3% to 5% (effective October 31, 2024).

Positive news for 2025 buyers

The recent base rate cut in August has stimulated interest in the London property market. A recent in-house study involving 1,200 homebuyers reveals that 61% intend to purchase property in 2025, showing re-energised enthusiasm despite the interest rate peaks of 2023. This optimism points to a likely more active market in the coming year.

Declining mortgage rates

According to Zoopla, mortgage rates are currently at their lowest point in 15 months, with the average rate for a 5-year, 75% LTV mortgage now at 4.3%, down from 5.5% a year ago. This reduction is spiking buyer interest, with a 10% rise in net sales across the UK, offering much-needed relief for prospective homeowners.

Lower inflation indicates additional rate cuts

According to the ONS, inflation stood at 1.7% in September, reaching a three-year low and creating room for additional rate cuts. With inflation rates falling below the Bank of England’s 2% target, Governor Andrew Bailey suggested more rate reductions are likely if this trend continues. Many overseas and domestic investors now anticipate rate cuts at the upcoming BoE meetings in November and December, which could further stimulate the London property market.

Rising global interest events in Hong Kong

In recent weeks, our Hong Kong events have seen an incredible turnout, reflecting the enthusiasm among local buyers for prime London properties.

Success at Jade Wharf Showcase!

On November 9-10, Benham and Reeves Hong Kong took the opportunity to introduce Jade Wharf at London Dock. We drew amazing responses from savvy investors looking to make the most of the London property market’s stability. This event helped underscore London’s appeal to investors — especially those eager to diversify into global property markets.

London Square Twickenham Green selling fast

Another event featured new offerings by London Square in Twickenham, a charming, family-friendly area within Richmond upon Thames. With its three-bedroom apartments and mews houses near the River Crane, Twickenham Green captivated buyers’ attention for its accessibility to Waterloo and Central London. Starting at £515,000* for apartments and £1.1 million* for freehold houses, this development is an ideal investment pick for Hong Kong investors interested in the quintessential British lifestyle and solid returns.

Royal Gateway an ideal investment opportunity

The end of October focused on Royal Gateway, Ealing, West London. Set in a regeneration zone backed by a £26 billion investment, this Barratt London development is gaining traction for its quick access to the Elizabeth Line and the upcoming High-Speed Rail. For families, this development’s prime location is appealing for its proximity to Imperial College London and King’s College.

London Waterside B&R Hong Kong’s latest triumph

Our latest November exhibition highlighted the prestigious London Waterside Collection by St. George, a part of the Berkeley Group. With prices starting at £390,000* and rental yields going up to 6%*, the prime waterside developments are excellent opportunities for an incredible blend of lifestyle and financial returns.

Overseas demand for UAE developments

Benham and Reeves is showcasing luxurious Dubai properties to overseas investors, including buyers from Hong Kong, by renowned UAE developer Aldar in Dubai, Abu Dhabi and Ras Al Khaimah. Our team also provides insights into various financial strategies, including the Golden Visa scheme and investor-friendly policies.

Indians eyeing UAE properties

Our team in India had an eventful month, with the Delhi team hosting an event in October to showcase popular UAE developments. The Mumbai team is preparing to unveil exclusive beachfront Dubai properties to Indian investors, offering guidance on maximising income in the UAE’s tax-free environment.

Dubai buyers preview TwelveTrees Park

In Dubai, directors Anita Mehra and Marc von Grundherr held one-on-one consultations to introduce clients to TwelveTrees Park, Berkeley’s master-planned development in London’s Zone 2. This development offers green spaces, commercial areas and excellent connectivity to Stratford, Canary Wharf and the City of London.

Singapore buyers’ interest in Berkeley’s properties

West End Gate and Oval Village, two Berkeley Group developments, are gaining rapid popularity among Singapore investors. Our Singapore office recently showcased these modern Zone 1 and Zone 2 developments, starting from £590,000* and feature premium amenities, convenient transport links and up to 5% rental yields*.

South African investors interested in Dubai’s high-rise living

In South Africa, we successfully organised an exclusive showcase for Dubai properties, providing investors with an unparalleled glimpse into some of the world-class luxury estates located in the financial hub of the UAE. This event highlighted the exceptional investment opportunities available in this dynamic market.

Rental market records steady demand

Outside London, average rents reached £1,344 monthly, marking a 5.2% increase. London’s average rent climbed to £2,694, a 2.5% rise. Despite slightly slower rent growth, demand across the city remains high, with around 15 inquiries per rental property — nearly double the 2019 level.

Rising rents and inflation

Although housing stock across London rose by 13% year-on-year, it remains 27% below the 2019 peak, putting pressure on available inventory. Private rents increased by 8.4% to £1,295, outpacing inflation at 1.7%, with the highest rent growth recorded in August at 9.6%.

If you are looking to buy, sell, let or rent property in London, the Benham & Reeves team is here to assist with every aspect of your property journey.

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