Despite economic turbulence and changing tax policy, London’s prime property sector has shown outstanding resilience. Sales of homes above £5m remained steady in early 2025, while demand for secondary residences and long-term family homes is being fuelled by domestic buyers. Meanwhile, rising rents in the luxury lettings market suggest ongoing demand from international tenants – even as purchasing patterns shift.
- Homes priced between £10m and £15m reached a total value of £190m.
- Value in the £10m–£15m range rose 64% compared to Q1 2024.
- Policy shifts have limited international buyer demand for ownership.
- Average prime central London flat rents rose 7.9% in Q1 2025.
- Year-on-year rent growth reached 11.3% for prime flats.
Original article source: City A.M.
While the latest data reflects a market facing its share of pressures – from stock market volatility to policy-driven buyer hesitancy – the fundamentals of prime London real estate remain intact. Steady sales volumes at the very top end of the market indicate that confidence hasn’t wavered among high-net-worth buyers, particularly those seeking long-term security and utility from their assets.
What’s striking is the shift in buyer makeup. The resurgence of domestic pied-a-terre purchasers, absent in the post-pandemic years, suggests a maturing appetite for lifestyle-led investment. London is once again being viewed not just as a trophy market, but as a base for long-term living – particularly among those looking for central, manageable homes that combine convenience with capital stability.
International buyers may be recalibrating in response to recent tax and residency rule changes, but they haven’t disappeared – they’ve simply adapted. The rise in luxury rental demand and pricing points to a pivot in strategy, with many now opting for serviced lettings that offer flexibility without the added friction of ownership. For landlords and asset managers, this emphasises the strength of the prime rental market – and the ongoing relevance of London as a global tenant destination.
Yes, market conditions may tighten in the short term. But these figures reinforce a deeper truth – the appeal of London’s prime postcodes endures – not because they’re always booming, but because they hold their ground when others falter. For long-term investors, that kind of resilience speaks volumes.
