QIB UK, a subsidiary of Qatar Islamic Bank in Doha is working with renowned real estate consultancy Savills in order to inform potential investors from Qatar on the latest research about the London residential market, with a focus on prime properties.
Savills’s prime sales index reports that values across London’s most prime markets are down -2% on the year. But the impact on sentiment is being felt more profoundly in the more rarefied prime central London markets, where values fell by -1.8% on the quarter, the biggest fall since the end of 2016, a period marked by the EU Referendum, a sudden change of the Prime minister, and the introduction of a new stamp duty surcharge.
Annual values have fallen -4.7% in prime central London, which also sits -24% below the 2014 market peak, says Savills, offering significant opportunity to buyers to take advantage of historic value.
“The most discretionary, top end of the market (£10 million-plus), is experiencing the greatest downward pressure on prices. The pool of buyers who are typically interested in this price point had already decreased after the end of the non-domicile regime, and some who remain are hesitant to act ahead of the budget announcement. Nevertheless, there remains an undercurrent of demand from those eager to capitalise on the historic value currently available,” comments Lucian Cook, head of residential research at Savills.
Property values in outer prime London areas also have dipped slightly, but the declines remain more modest. Over the past three months, prices have fallen by just 0.7% over the past three months, and by 0.8% over the past year, according to research by Savills.
Areas with strong domestic demand, such as South West and West London, have shown particular resilience, with values holding relatively steady.
Despite ongoing economic uncertainty, many buyers are still making moves based on necessity - although some are approaching purchases more cautiously, given concerns about how future financial changes could affect them.
Limited availability of new homes above £5 million
London’s super prime new build market is facing limited supply of quality stock. Currently, just over 600 super prime new build (£5m+) flats are for sale in prime central London, according to Savills.
Stock is most limited in the traditional prime neighbourhood of Belgravia, with only around 40% of the £5m+ pipeline is currently for sale, highlighting the enduring appeal and limited availability in this highly sought-after area.
However, emerging areas such as Bayswater are drawing a new generation of luxury buyer.
“Millennials and Gen Z – who are attracted to lifestyle, design, and digital appeal as much as heritage prestige. This neighbourhood has seen a recent surge in luxury stock, driven by the regeneration of Queensway, and around 65% of new homes are on the market,” says Katy Warrick, Head of London residential development research at Savills.
Two new developments, Park Modern, overlooking Hyde Park and The Whiteley, home to the UK’s first Six Senses hotel, are proving popular in this neighbourhood.
There is also growing demand for turnkey super prime homes, according to Savills, though these still make up less than half the current pipeline. St James leads in offering completed homes in the £5-10 million range – ideal for buyers seeking luxury without the top-tier price tag. Meanwhile, Whitehall, Marylebone, and Mayfair dominate the £10 million-plus turnkey market, targeting ultra-wealthy buyers ready to move in now and exemplified by schemes such as The OWO and 60 Curzon.
As London evolves, so does the definition of luxury – shaped not just by address, but by lifestyle, architecture, and what buyers truly value today.
What is the outlook for prime London property markets?
Until further clarity emerges on what will and won’t be in Rachel Reeves’ budget, momentum in the market is expected to remain subdued, as both buyers and sellers remain cautious. More generally, the prospect of a further rate cut throughout the remainder of this year is receding, given higher than expected inflation.
Regardless of any changes that come to fruition, the value on offer across central London is undeniable and there will be many motivated buyers who recognised the fundamentals of London and are willing to take a longer term view, given the historic value on offer.
QIB UK assistance
For more information and for enquiries about the residential market in London, please get in touch with QIB UK’s Private Banking team:
QIB (UK) plc
43 Grosvenor Street
London W1K 3HL
Tel: +44 (0) 207 268 7200
Email: info@qib-uk.com