By Anna Solomon.
Our 2023 Prime London Property Forecast: Where Values Will Hold, and Where to Look Next
UK house prices spent much of the pandemic defying expectations. Where the Bank of England had initially feared falls of up to 16% at the start of 2020, values instead rose by almost 10% in 2021 alone. That momentum has since reversed sharply, driven by the war in Ukraine, lingering Brexit effects, and the combined pressures of a cost-of-living crisis, inflation and rising interest rates — with London now recording four consecutive months of price falls, and wider UK forecasts pointing to declines of between 5% and 12% this year.
Why Prime London Is Different
The prime market behaves differently to the mainstream, and largely for one reason: leverage. Savills research shows only around a third of prime central London homeowners carry any mortgage debt on their property, meaning far fewer owners are under pressure to sell, and far more capacity to simply hold value through a downturn. As Black Brick Founder and Managing Partner Camilla Dell puts it:
“Luxury, rare assets will always have demand over areas that are more susceptible, outside of prime central London.”
Our own forecast for prime London this year is a relatively modest 2% price fall — though, as Dell notes, any such forecast should be treated with appropriate caution:
“Predicting property values is extremely difficult, particularly in a market like London where different property types and areas all factor hugely in determining how values will perform over time.”
There are reasons for optimism further out, too, with inflation expected to peak around the middle of the year: “we should see some light at the end of the tunnel as we enter Q3 2023.”
Is Now a Good Time to Sell?
Buyers remain hesitant in the current climate, and will typically “only take the plunge if they feel the deal/discount seems worthwhile.” Realistic pricing is essential — “anything that is wildly overpriced probably won’t be considered at the moment.” That said, demand is highly location-dependent: family homes with gardens in the £2m–£5m range remain genuinely competitive in suburbs such as Richmond, Wimbledon and Dulwich.
More broadly, buyer priorities have shifted since the pandemic. Proximity to transport links, a strong local high street and access to a park are now consistently in demand, alongside a growing willingness to pay a premium for air conditioning as London summers get hotter. As Dell explains: “Post-pandemic, buyers want to feel like they are buying into a community.”
Where We’d Look to Buy Right Now
For buyers with capital to deploy, certain locations stand out as particularly well positioned:
Mayfair remains a perennial choice — a prime address since the 17th century, with genuinely limited stock across its one-square-mile footprint and consistently strong demand.
St John’s Wood, in prime outer London, has proven especially resilient, with current sale prices around 11% above their 2018 peak.
North Kensington is, in our view, one of the more overlooked opportunities in the market. As Dell explains: “has been on a quiet ascent.” She points to its emerging character as an alternative to its more famous neighbour: “Golborne Road Market is a less tourist-flooded and altogether hipper alternative to Portobello Road. Buyers are also cottoning on to the fact that they can get great value for money compared to Notting Hill, less than a mile away.” The value gap is stark — property in W10 currently sells for around £1,400–£1,500 per sq ft, against £4,000–£5,000 per sq ft in Notting Hill itself.
Acton has benefited from major infrastructure investment, including new high-speed rail links to the City and Canary Wharf and a £1bn mixed-use scheme planned alongside the station. House prices here rose 59% between 2012, when work on Crossrail began, and last year.
Herne Hill rounds out our list. Long overshadowed by neighbouring Brixton and Peckham, it has increasingly drawn value-conscious family buyers as prices in those areas have risen: “It has previously been overshadowed by its neighbours, Brixton and Peckham. But as property prices have swelled, buyers looking for value for money have started to explore Herne Hill.” Notable residents choosing the area include Boris and Carrie Johnson, reported to have selected an Edwardian villa on Stradella Road as their post-Downing Street home.
Our Take
Further price falls this year look likely, and above-inflation growth is unlikely to return for a few years yet — but the pressure will be felt far more acutely in the mainstream market than in prime London. Sellers should be realistic on price, and buyers correspondingly cautious, but a small number of well-connected, community-oriented postcodes look well placed to outperform the wider market over the coming year.
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