The UK’s prime housing markets experienced varied outcomes in Q4 2024, according to property firm Savills, as political and fiscal changes following the Government’s first Budget influenced buyer and seller sentiment.
In prime central London, values fell by -0.8% over the quarter, with areas such as Knightsbridge (-2.0%), South Kensington (-1.6%), and Belgravia (-1.5%) hit hardest. These markets, with high concentrations of wealth and international buyers, were particularly affected by the winding down of the non-domiciled tax regime and the new stamp duty land tax (SDLT) surcharge for second home purchases.
Lucian Cook, head of residential research at Savills, said: “The cautious mentality that we observed ahead of this summer’s general election and the Autumn Budget has persisted across prime markets as the year draws to a close, although properties continue to sell where they are priced competitively.
“Prime central London locations remain the most price sensitive as buyers and sellers adjust to the fiscal changes. We expect market conditions to remain challenging in central London next year as the impact of these changes continues to be felt.”
In contrast, outer prime London markets saw marginal growth of +0.3% in Q4, supported by demand in maturing prime areas like Hackney (+1.7%) and Shoreditch (+1.4%). Savills predicts outer prime London values will remain flat in 2025 but grow by +14.7% over the next five years.
Prime regional markets saw a slight price decline of -0.2% in Q4, resulting in a -1.0% drop over 2024. However, prices remain +9.6% above pre-pandemic levels, with suburban areas near London, such as Northwood (+0.8%) and Weybridge (+0.6%), showing resilience. The Midlands and the North of England also proved stable, with values increasing by +0.8% in 2024.
Cook added: “Prime regional hotspots are likely to benefit from some displaced demand as families look to strike a balance between house prices, commutability, and access to schooling. Coastal and second-home hotspots, while price-sensitive, are increasingly looking like good value, which could contribute to a pick-up in transactions as we head towards the summer.”
Savills forecasts a +2.0% price increase across prime regional markets in 2025 and a five-year growth projection of +18.2%.
