It's a wrap! Our overview of the PCL property market for 2024

Adaptability & Collaboration is Key to Success

This year has undoubtedly been one of the most challenging for the property market in recent memory. While most agents tend to maintain a “glass-half-full” perspective, it’s important to acknowledge the difficulties we’ve faced. Having been in this industry for 40 years, I can confidently say that this has been one of the toughest markets I’ve ever experienced.

However, we are adapting and learning with each month. As a small boutique agency, we have the advantage of agility; like a speedboat, compared to the larger, slower barges of the corporate agencies!! This allows us to quickly adapt to market conditions and stay ahead.

One noticeable trend this year has been the increased level of collaboration across the industry.

At Rose & Partners, this aligns perfectly with our ethos. We have always prioritised our clients’ needs above all else and fostered an inclusive approach. For us, it’s not about who sells the property, but about achieving the best result for the client. This means we’re more than willing to share a portion of our commission and collaborate with other agents who bring the right buyers to the table, rather than waiting for that elusive perfect buyer to come to us directly.

This collaborative mindset has positioned us well, enabling us to successfully sell some exceptional properties this year. We’re proud of what we’ve achieved and look forward to continuing to put our clients first in an ever-changing market.

2024 Market Overview

As we bid farewell to 2024, Prime Central London’s (PCL) property market tells a story of resilience and recalibration. This year was marked by political uncertainty, fiscal policy shifts, and economic fluctuations, making it a complex environment for buyers, sellers, and investors. Below, we reflect on key themes and their impact on the PCL property market.

Election Anticipation and Aftermath

The 2024 general election cast a long shadow over the property market. In the lead-up, buyers and sellers hesitated, anticipating potential shifts in housing policies, taxation, and economic strategy. The election outcome brought clarity but also new challenges, as proposed changes to property taxes and foreign investment rules added complexity to the landscape.

For PCL, which relies heavily on international buyers, the political tone regarding foreign investment is critical. Post-election, the market experienced a temporary lift as deferred decisions resumed. However, uncertainty about the implementation of new policies could weigh on early 2025 activity.

Budget and Stamp Duty Changes

The Autumn Budget introduced notable changes to stamp duty, particularly targeting high-value properties and overseas buyers. With the top end of the market already absorbing significant taxation, the increased stamp duty bands have made buying ultra-prime properties more expensive. For example, the average £5m+ home now attracts stamp duty exceeding £850,000+ for overseas buyers (assuming they are non-resident and own a home somewhere else in the world) — a figure equivalent to approximately four years’ rental costs in PCL .

Impact on the Top of the Property Tree

High-net-worth individuals remain active in the PCL market, but the increased transactional costs have shifted some to explore renting. While this segment is more resilient to policy changes, the long-term implications could deter speculative investors, consolidating the focus on owner-occupiers and lifestyle buyers.

Interest Rate Fluctuations

2024 saw interest rates peak early in the year before stabilising in the latter months. For the PCL market, where cash buyers dominate, the impact was muted compared to other segments. However, higher borrowing costs did affect leveraged buyers, particularly in the sub-£5m bracket, where mortgage reliance is more common. The stabilisation of rates in late 2024 has provided some relief, but affordability concerns remain for mid-tier buyers.

New Non-Dom Rules

Changes to the non-domicile tax regime also had ripple effects on PCL. These reforms reduced the attractiveness of the UK for some overseas buyers, particularly those seeking tax efficiency. This has spurred demand in the high-end rental market, where flexibility is favoured over commitment to large capital expenditures. With "non-doms" a key demographic for PCL, further tightening of rules could shift market dynamics in 2025.

Prime Sales: 2024 in Review and 2025 Outlook

The sales market in PCL experienced a year of contrasts:

• Key Trends: October’s record-breaking month gave way to a subdued November, though transactions and instructions remained above pre-pandemic levels .

• Prices: Achieved prices fell 1.8% annually, reflecting recalibration rather than a sharp decline .

2025 PCL Sales Outlook - Expect stability in the ultra-prime market, supported by international interest and limited supply. However, the mid-tier market faces challenges from affordability pressures and policy shifts. Fringe areas such as Fulham and Notting Hill may continue to outperform central zones like Mayfair due to better value propositions.

Prime Rentals: 2024 in Review and 2025 Outlook

The PCL rental market was defined by high rents and low supply in 2024. Average rents climbed 34.6% above pre-pandemic levels, reflecting constrained stock and sustained demand . However, activity slowed in the second half of the year as supply shortages persisted.

2025 PCL Rentals Outlook - Supply constraints will keep upward pressure on rents, particularly at the lower price points. The high-end rental market (£2,000+ per week) is likely to grow further, driven by overseas renters navigating tax and transactional cost changes. For tenants, flexibility remains key, with many opting to rent while awaiting greater political and economic clarity.

A Final Word

As we close the chapter on 2024, the PCL market stands at a crossroads. Political decisions, economic conditions, and global influences will play pivotal roles in shaping 2025. For buyers, sellers, and renters, understanding the nuances of this ever-evolving market is critical. We hope to be able to comment and steer buyers, sellers, landlords and tenants through what is going to be a busy 2025.

Wishing you the merriest of Christmases and a happy and successful New Year!