There are lots of challenges facing the prime property market if you are looking to sell your home.
Prime markets may benefit from high house prices but there are risks that demand could become dampened, making it harder to sell a property.
This is because the typical buyers of prime property are being hit with higher taxes and regulations.
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Second home buyers have seen the additional stamp duty rate rise from 3% to 5% while international purchasers could also be hit by the end of non-dom status in the UK.
Higher capital gains tax rates and frozen allowances may also deter demand.
Research by luxury estate agent Beauchamp Estates even revealed this week that fewer billionaires purchased homes in London during 2024, with a 25% drop in sales of homes above £15 million recorded.
But estate agents are still seeing high levels of demand at price points of between £2 million and £10 million.
London agent Benham and Reeves has said demand for prime property valued above £2 million across London’s most prestigious neighbourhoods climbed during the final quarter of 2024, up by 2.7%, whilst there was a 1.6% increase across the super prime market where homes sell for above £10 million.
It measures this by the change in the proportion of property sales listings on Rightmove that are shown as sold subject to contract.
“The real motivator isn’t the increase on second homes, it’s the soon to expire relief thresholds that will revert back to previous come April,” says Marc von Grundherr, director of Benham and Reeves.
“Stamp duty is a rather sizeable charge on a prime London home and so it’s no surprise that high-end buyers are as keen to beat the countdown as any other buyer in the London market.”
Prime London property market
The research from Benham and Reeves shows that in the prime market – properties priced between £2 million and £10 million, 19.7% of prime London properties were under offer at the end of 2024, marking a 2.7% increase versus the previous quarter.
Wapping tops the table where the largest increase in quarterly demand is concerned, having seen an 18.8% rise.
At 11.7%, Putney has also seen a considerable increase in prime London buyer activity on a quarterly basis, followed by Clapham.
However, some areas are seeing large drops in demand compared with last year, with Chiswick down 19.5%.
| London areas | Percentage of homes under offer | Quarterly change in demand |
|---|---|---|
| Wapping | 18.8% | 18.8% |
| Putney | 37.3% | 11.7% |
| Clapham | 45.8% | 9% |
| Islington | 42.2% | 7% |
| Chiswick | 32.6% | 6% |
Super prime London property market
At the very top of London’s property ladder, 4.1% of available properties listed for sale at above £10 million were under offer as of the fourth quarter of 204.
This was up 1.6% versus the previous quarter and a 2.5% annual rise.
Wimbledon saw the largest quarterly increase in super prime buyer demand, up 50% on a quarterly basis, with demand in Notting Hill up 6.3% followed by a 4.3% rise in Holland Park.
| London areas | Percentage of homes under offer | Quarterly change in demand |
|---|---|---|
| Wimbledon | 50% | 50% |
| Notting Hill | 6.3% | 6.3% |
| Holland Park | 8% | 4.3% |
| Mayfair | 9.1% | 3.4% |
| Kensington | 3.1% | 0.3% |
Is now a good time to sell a property?
Mortgage rates are lower than this time last year and there are hopes of interest rate cuts in the coming months, which could boost demand.
However, there are fears that tax rises in the Budget could weaken sentiment.
The latest Halifax House Price Index already recorded a drop in average prices during December and rising gilt yields suggest there are fears about the UK’s economic prospects, which could feed into the housing market.
One factor on the side of sellers is that many buyers will want to complete transactions before stamp duty thresholds drop in April, which could at least keep the market going until the spring.
Matt Thompson, head of sales at Chestertons, said: “January started where December left off. We are seeing steady demand from buyers who feel motivated to finalise their property search as soon as possible.
“This spike in buyer activity is boosted by current speculation about potential rate cuts, which is encouraging forward planning house hunters to begin or finalise their search now and lock in a favourable rate nearer the time of contracts being exchanged.”
