Q1 2025: Prime Central London Sales & Lettings Market Report

The property market in Prime Central London continues to shift as we progress through 2025, with notable changes in both the lettings and sales sectors. While rental prices remain strong, tenancy numbers have declined. Meanwhile, the sales market is seeing increased activity, although sellers are having to compromise.

Lettings Market: Fewer Deals, Rising Rents

Demand has cooled, yet rental prices are still rising. While fewer agreements are being signed, landlords are securing higher rents per square foot.

- Lettings activity down: Transactions fell 14.5% quarter-on-quarter and 25.2% year-on-year.
- Rental growth persists: Prices increased by 2.2% over the quarter and 5.9% annually.
- Average weekly rents: Flats are letting for £1,052, while houses average £2,594 per week.
- Reduced availability: The number of properties on the market is down 11.5% year-on-year.

- Price adjustments common: 34.1% of listings have seen asking rents reduced.
- Longer time on market: Properties are sitting empty for an average of 96 days.
- Luxury sector remains strong: 35.5% of rental stock is priced above £2,000 per week.

Despite fewer tenancies, landlords are achieving higher returns, with rental rates per square foot rising to £60.66, up from £57.29 last year.

Sales Market: More Transactions, but Seller Discounts Persist

Sales activity is picking up, but buyers are negotiating aggressively. House prices are holding firm, while flats are seeing continued depreciation

- Achieved prices: The average price per square foot stands at £1,251, down 3.9% year-on-year.
- Transaction volumes rising: Sales increased by 14.4% compared to last year.
- Sellers compromising: Discounts on asking prices average 8.9%.
- Flats vs. houses: Flat prices have declined 5.5% year-on-year, whereas house prices have risen 6.6%.
- What’s selling? Flats are averaging £1.28 million, while houses are achieving £3.45 million.
- Time on market: 65.2% of listings have remained unsold for over three months.
- Price reductions widespread: 50.2% of stock has been discounted.

Buyers are returning, but they are negotiating tough deals. House prices continue to hold, while flats are now 4.3% cheaper than they were five years ago, presenting an ongoing challenge for vendors in this segment.

As market conditions continue to shift, landlords and sellers must navigate an evolving landscape. Whether you are buying, selling, letting, or renting, staying informed about these trends is essential for making confident decisions. Expert guidance is key to ensuring you have the insights and strategies needed to navigate the evolving market successfully.

With over 20 years of experience in the Prime London Market, M2 Property has been a trusted advisor to clients seeking tailored solutions. If you're planning your next move in Prime Central London, get in touch today for expert advice customised to your needs.

***Source: LonRes