As the founder of London-based company Cornerstone Asset Advisors Ltd, Emile Salame draws on his considerable experience of the real estate industry. Cornerstone Asset Advisors supports clients at every step of their journey, from finding the right property to managing their real estate investment. This article will look at the central London property market, identifying emerging trends.
After seeing a marked drop in 2023, London house prices had a reasonable recovery in 2024, with interest rate cuts bolstering buyer confidence. Data from HM Land Registry reveals a 3.4% year-on-year increase in UK house prices in October 2024, with the average UK house price rising to £292,000.
Typically, the property market sees a seasonal lull towards the end of the year, with sellers and purchasers reluctant to move in the run-up to Christmas. However, based on data from a range of providers, UK house prices appeared set to end 2024 in positive territory.
UK homeowners enjoyed a milestone moment in the summer of 2024 as house prices finally returned to 2022 levels, reaching their previous peak. The average house price set a new record in August 2024, reaching almost £293,000. Nevertheless, despite this positivity, experts warn that the new year could bring headwinds. Most major market players have scaled back interest rate cut predictions for 2025, partly in response to the Autumn Budget combined with inflationary pressures. Fewer cuts in 2025 could translate to more modest mortgage rate decreases than experts had hoped. In addition, from April 2025, many buyers will also find themselves paying increased Stamp Duty rates as temporary relief measures come to an end. Experts anticipate that this could deter some from moving, particularly those whose finances are already stretched.
Sold house prices provide the most accurate indication of UK property market movements, with the HM Land Registry index ranking as the most authoritative source. However, the lag between transactions completing and appearing on the index spans several months, meaning it is not always a reliable indicator of current market conditions.
Major lenders Halifax and Nationwide are also trusted sources of house price data. However, figures are based on the lender’s property valuation at the mortgage approval stage rather than the actual sale price, leaving room for significant disparities. While Halifax reported a 4.8% year-on-year increase in UK house prices for November 2024, Nationwide’s estimate for the same period was much more modest, at 3.7%.
Zoopla also publishes a house price index, using mortgage valuations, data for agreed sales and sold prices. The real estate website reported an even lower year-on-year increase for November 2024, at just 1.5%.
The length of time it takes to sell a property is dependent on a range of different factors. However, broadly speaking, UK properties have been taking longer to sell, largely due to high mortgage rates. According to research from Rightmove, as of October 2024 sellers were taking an average of 62 days to secure a buyer, a similar timeframe to that reported the previous year.
While growth in outer prime central London returned to positive territory in October 2024, growth remained muted across prime central London. According to a survey conducted by Savills, 72% of participants cited an increased tax burden as a primary buyer concern, with 37% swayed by general market uncertainty.
In November 2024, the Bank of England lowered interest rates from 5% to 4.75% in the second reduction that year. Moving into 2025, a base rate cut is tipped to pave the way for a general positive effect on mortgages. However, it must also be remembered that mortgage rates are currently much higher than they were for much of the last decade. While experts predict that UK house prices may continue to rise, growth is likely to be tempered significantly.
