By Melissa York.
As the Wider Market Cools, Prime Central London Tells a Different Story
After two years of rapid growth, UK house prices have begun to fall. Nationwide recorded the first month-on-month decline in 15 months this October, with the average UK house price dropping from £272,259 to £268,282, and Savills forecasting a further 10% average fall next year alongside the lowest transaction volumes since 2011.
Why the Top of the Market Is Different
Buyers at the upper end of the market are largely insulated from the pressures driving this slowdown, since many are cash buyers with no dependence on mortgage finance. Hamptons reports that £1m-plus properties are currently selling 17 days faster than they were in October 2021 — a striking contrast to the sluggishness affecting much of the wider market.
London is a particular bright spot: 5% more homes are selling above asking price than a year ago, and buyer demand has risen faster here than in any other UK region, up 11.6% year-on-year. PropCast data points to a genuine resurgence in central submarkets, with activity picking back up in both the City of London and the West End.
International Buyers Are Driving Prime Central London’s Resilience
We’re seeing this directly in our own transaction activity. Having recently completed a number of deals in Notting Hill and Mayfair, Black Brick’s Camilla Dell points to a clear driver behind continued seller confidence in the capital’s best addresses:
“There’s a lot of international money swirling around. Most sellers are just really bullish at the moment in prime central London.”
With pandemic-era travel restrictions now firmly behind us, international buyers have returned in force, taking advantage of a weaker pound to secure prime central London property at an effective discount compared with a couple of years ago.
The Regional Picture Looks Very Different
Savills expects the sharpest price falls over the next year to be concentrated in regions with the highest average prices and greatest reliance on mortgage borrowing — a forecast that points to declines of around 12.5% in Greater London overall, 11% in the East of England and South East, and 10% in the South West. It’s a reminder that “London” as a single market conceals enormous variation: while prime central London remains buoyant on the back of cash and international demand, more mortgage-dependent parts of the wider London market face a materially tougher year ahead.
Buyer demand data tells a similarly mixed story elsewhere in the country. The North West, Scotland, the East Midlands and Yorkshire are currently seeing the highest rates of bidding wars nationally, while areas such as Totland Bay on the Isle of Wight and Henley-in-Arden have seen some of the sharpest falls in buyer interest.
Our Take
The gap between prime central London and the wider UK market has rarely been more pronounced. Cash-rich buyers, a significant proportion of them international, continue to transact with real confidence in London’s best postcodes, even as higher borrowing costs weigh heavily on more mortgage-dependent parts of the market. For sellers of genuinely prime property, this remains a market where well-priced, well-located homes continue to attract strong, often international, demand.
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