Despite Zoopla forecasting that the overall property market in London is likely to show signs of low economic growth in 2025, market activity in the capital city continues to hold firm. As the latest data by Savills underscores, the performance of the London property market continues to struggle, yet the one area London is doing remarkably well in is enticing investment within the high-end property sector, particularly for properties valued above £5 million.
To this end, it is useful to unpack the current data and explore the causes behind this uptick in high-end market activity in London.
What Does the General Data Show?
Compared to other parts of the country, London tends to rank low in terms of overall market performance – for the combination of small annual property price growth, low stock relative to demand, and high affordability challenges make the region less desirable for property investment.
Such an assessment was put forward by Zoopla’s latest statistics regarding the best places for property investment. Ranked based on annual price increases, listing availability, and success rates in the negotiation process, Zoopla considers London to be in the lowest bracket when it comes to the most desirable locations for purchasing property. (In the English market, Zoopla considers Newcastle, Leeds, and Stoke-on-Trent to be the most attractive property markets.)
Especially for property prices hovering at £670,000, around the average property price in London, the market is still facing difficulties in attracting property investment.
According to LonRes, the total achieved sold prices for prime London were down between December 2023 and December 2024 by –0.5%. Furthermore, property sales during the same period were down by –7.6%.
Overall, these figures indicate that the general market in London is still in a recovery process: the market has still yet to reach the transaction activity between 2017 and 2019, where the average volume of sales made was 10.0% higher and under offers was 19.5% higher.
How is the High-End Property Sector Doing?
Where the London property market continues to stand out compared to other regional markets is its high-end property sector. Looking at property values above £5 million, a total of 128 sales took place over the fourth quarter of 2024, which signifies a 25% increase compared to the previous quarter.
The overall value of those transactions was worth £1.59 billion, whereas the previous quarter saw an overall value of £1.06 billion. The fourth quarter was also 26% higher compared to the same time period in 2023.
In addition to seeing the highest number of new build sales above £5 million in over a year at 24 transactions, the average price paid for a property valued over £5 million was £11.04 million, which is the highest level reported since 2019.
Chelsea and Kensington, Westminster, and Mayfair remain top destinations for high-end property investment. Yet Belgravia has carved out a greater share of the high-end property market in 2024, accounting for the highest investment in properties valued at over £5 million at 13%.
Alex Christian, co-head of Savills Private Offices, notes that the ‘traditional prime London neighbourhoods continue to be most sought after by high-end buyers. Belgravia, in particular, has benefited from a surge of demand from a younger demographic thanks to significant investment into the area and an evolved retail and restaurant offering.’
An additional factor is that these high-end properties are offering enticing investment opportunities, given that the average value has declined to –20% compared to their peak asking prices. Over the next five years, Savills forecasts that the value of properties worth over £5 million in prime London will increase by 9.6%, thus encouraging investors to secure those properties quickly.
Reflecting on the heightened activity of high-end property transactions over the previous quarter, Christian observes that ‘our prime agency and development teams had one the strongest ends to a year in recent times, exchanging on the sale of five deals totalling over £120m during the final ten days of December. The buyers were acting with renewed confidence, having assessed how the changes in the Budget would affect them and wanting to take advantage of an increased appetite by pragmatic vendors to finalise deals before the year-end. ‘
What Does This Mean for the High-End Property Market?
In contrast to the relatively uninspiring metrics of the overall London property market, the London high-end sector is currently undergoing an exciting period. Its appeal is driving significant investment, and this will contribute to cultivating the resurgence of the London property market.
While the market continues to confront difficulties, its high-end properties will remain what Nick Maud, director of research at Savills, calls the ‘golden postcodes’ that will entice investors from across the globe.
Now is an excellent opportunity to invest in the high-end property sector if one wants to capitalise on the present market conditions.
