Property data consultancy LonRes says 2024 was a year of little change for the prime London property market, with most measures at the end of December close to where they were 12 months earlier.
Achieved sold prices across prime London remained down on an annual basis in December, finishing the year at -0.5%.
Longer-term, they were 2.1% higher than five years ago but 6.0% lower than 10 years ago.
Transactions in December were down 7.6% compared to the same month last year. But looking at the full year overall transactions were 4.9% up on 2023. This is as a consequence of an extraordinarily busy October. Sales volumes for the whole year were 10.0% higher than the pre-pandemic (2017 to 2019) annual average.
Traditionally a relatively quiet month, activity in the earlier stages of the sales process was higher in December 2024. The number of properties going under offer was 16.0% higher than a year ago, with the annual total 6.7% up on 2023. New instructions in December increased by 28.6% on an annual basis with the 2024 full year figure 10.5% up on 2023.
Overall, the combination of supply and demand activity over the course of the year meant that there was 10.7% more stock on the market across prime London on December 31 than a year earlier.
Activity in the £5 million plus market slowed. Sales volumes in 2024 were 4.1% lower than 2023, although there were 36% more transactions compared to the 2017-19 average. New instructions in this market have been rising for many months, finishing the year 25.2% higher than 2023 and resulting in 23.8% more £5m+ homes on the market over the same period.
Annual rental growth across prime London increased to 2.5% in December, continuing last year’s trend of low, steady growth. Average rents were 31.9% above their 2017-2019 (pre-pandemic) average (table 1).
LonRes data for December indicated a decrease of 18.9% in lets agreed and a 26.3% decrease in new instructions compared to December 2023.
The equivalent full year figures are growth of 2.3% in lets agreed and a 0.8% rise in new listings. The stock of available rental properties across prime London at the end of the year was 12.3% lower than at the end of 2023.
Nick Gregori, Head of Research of LonRes, says: “In short, the prime London sales market in 2024 saw values decrease and activity rise, but both of these changes have been small. For the full year, sales volumes increased by around 5% compared to 2023 and new instructions rose by approximately twice that over the same period. Values finished 2024 only 0.5% below where they started it.
“This performance is a result of confidence in the housing market and wider economy being relatively weak. The change in government and subsequent Budget announcements didn’t help sentiment but are now behind us and ‘priced in’. People who need to buy or sell are therefore continuing to do so but those in more discretionary markets remain in no rush, having seen little price movement for many months. The opportunity for a stamp duty saving before April may introduce an element of urgency, but in prime London the figures involved are small compared to purchase costs.
“The £5m+ price point has been most impacted by tax changes and has fallen back from a strong performance in 2022 and 2023. Supply continues to rise in this market but demand has not kept pace as overseas (potential) buyers appear reticent on London as an investment destination. The longer-term context is that the top end of the market remains more active than it was pre-pandemic. Despite the slowdown, 2024 saw 36% more £5m+ sales than the 2017-2019 average.
“The outlook for 2025 is unclear, with so many external factors potentially impacting the market. Donald Trump’s return to the White House – promising tariffs and tax cuts – could be inflationary for the global economy. In turn this could limit the scope for interest rate cuts here regardless of domestic economic growth. So the much-awaited fall in mortgage borrowing costs may be slower and smaller than hoped, dampening prospects for a stronger recovery.
“The prime London letting market had a quiet December, bringing a quiet year to a close. Activity for the full year was very much in line with 2023 as the post-pandemic recovery stalled, limited by shrinking available stock at all price points up to £2,000 per week. Rental growth of 2.5% is broadly in line with inflation.”