An Agents View Q2 2025

I meet a lot of agents and clients on a weekly basis, I mean a lot; and the one thing I keep hearing from every estate agent, broker and mortgage advisor I speak to, repeatedly is: “The market is in flux…”

Really?

So what does flux* mean in real terms, in relation to the current London housing market?

Speaking to these seasoned professionals, it actually means one thing- the market is stagnant.

Off-plan sales in residential developments have virtually ground to a halt as southeast Asian buyers fail to invest and developers scrabble to restructure their sales and marketing strategies.

High end Super and Ultra Prime London trophy assets are stalling, as the new Labour government Non-Dom reform has seen HNWI and UHNWI staying away, not to mention extensive sanctions on Russia following the invasion of Ukraine whose oligarchs reigned supreme in this corner of the market.

Recent changes to taxation and stamp duty have significantly impacted high-net-worth individuals — with overseas buyers facing rates that can exceed 17% on property purchases

UK millionaires have run for the hills (foreign ones!); however, many have decided not to liquidate their assets.

In fact, to May 2025 the number of prime property sales above £5m in London was 14 per cent lower than in the previous 12 months according to the FT.

Then look at first time buyers- the average age is London is now 35 years of age according to various sources.

These buyers are now overlooking studio and one-bedroom apartments, instead this ‘generation rent’ choose to save, enjoy the trappings of fully serviced and maintained apartments whilst remaining uninvested.

This sector of the market- the ‘bottom of the ladder’ is what feeds the wider marketplace, allowing others to move onwards and upwards to larger properties; and these first-time buyers are choosing to skip the first and second rungs, instead looking for their first buy to be a freehold house.

However, some would claim that this is now a ‘Buyers’ Market’ with the number of properties hitting the market for sale at a ‘high’.

Competitive sellers who are pricing their properties at sensible levels, in line with the current market, are successfully seeing offers and sales materialise.

Colleen Babcock, a property expert at Rightmove, recently told The Guardian: “It appears that we’re now seeing the decade-high level of homes for sale, and the recent stamp duty increases in England, have a delayed impact on new sellers’ pricing.

“Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.”

So, some sellers are agreeing with their agents in making a ‘price correction’ or in other words, dropping their asking prices, and word in the marketplace is that these sellers are also willing to take offers.

Nationwide will now offer 95% loan-to-value (LTV) mortgages on new build houses- but how many new houses do you see being built in central London?

Whilst the top of the market remains stagnant and the bottom of the market is virtually non-existent, the freehold house or family home market IS relatively active in key areas in London such as Islington, Clapham and Hackney.

Well, where does this leave the marketplace?

It seems very much focused on mid-market freehold homes where families and now 30 something first-time buyers are vying for the same real estate.

This (almost certainly) domestic, UK buyer market is the only sector which appears to be healthy and active.

Property between £1.25m- £4.75m appears (according to agents and Rightmove) to be the sweet spot; however, that leaves out huge swathes of the marketplace.

So, flux- where is the constant change?

I personally cannot see any ‘constants’ in the current marketplace other than foreign investors and trophy hunters keeping their hands firmly in their pockets.

In terms of instability? It’s everywhere you look.

Wars across the global landscape and uncertain stability in various markets is forcing everyone to act with caution and trepidation. Fear and uncertainty reign.

The UK labour government with their new property taxes and changes in legislation together with soaring crime in London and ever rising costs, is having a detrimental effect, leaving London a less certain bet.

However, there are always peaks and troughs in any market.

Jamie Rueben of the Rubens family ‘fame’, with a reported fortune of £26.87 billion told the FT the same: “All cities go through ebbs and flows”.

So, do I personally see any light at the end of the real estate tunnel?

I do actually, but it’s going to take a little bit of time to materialise.

I genuinely believe that the current governments’ term will come to an end with opposing parties using a reinstated Non-Dom status as a key vote winner and enticement for our HNWIs to return to these shores.

The next UK general election must be held no later than 15 August 2029 unless the Prime Minister will call it early (which I doubt) but you can live in hope.

As we approach next election, I believe we will see a flurry of activity across the market at all ends. Opportunity to snap up investments and deals will once again be at the forefront of every purchase strategy as buyers predict an upturn in the market, gambling on a change in power.

The whole world is looking towards global leaders to seek peace in those warzones around  the world and given time, we may see some progression in negotiations over the coming months or years.

Prices will rise, peak, and stabilise again and the London market will come out of the trough and once more be a city of wealth and opportunity, and regain its place as one of the greatest cities on earth.

Oxford Economics has released its 2025 Global Cities Index, ranking 1,000 cities worldwide. London maintained its position as the second-ranked city globally, just behind New York.

Praised for its world-leading education sector, exceptional talent pool, and progress in environmental performance, researchers noted that ‘London may exemplify the definition of a Global City more than any other place in the world.’

The next couple of 24 months will be the time to leverage a good deal on properties being marketed- particularly at opposing ends of the market.

However, wealthy owners are not always distressed and can afford to hold out for the market to improve.

In the meantime, you can continue to play in the desert and shopping malls of Dubai, but look beyond the short term and I believe investing now will reap dividends in the not too distant future.

Peaks and troughs- a natural cycle.

But all of this is just my opinion.

….and flux?  

That’s just agents speak- I’ll let you translate that as you will!

*Flux: A state of instability or constant change