Market update with Tom Bill & Marcus Dixon both are heads of residential research at Knight Frank & JLL.
The London real estate market is experiencing a slowdown due to higher mortgage rates, affecting transactions, especially in central London. However, the rental market remains strong. Experts predict that property prices will remain flat for the next 12-24 months, with a potential increase in 2025 as mortgage rates decrease.
Political uncertainty and potential tax reforms are impacting the wealth management sector, causing some landlords to exit the market due to concerns about debt and taxes. The market for new residential developments in prime central London is limited by a lack of available sites.
Key points:
- Flat property prices predicted over the next 12-24 months, with a potential rise in 2025.
- Political and tax uncertainties are influencing market dynamics and investor decisions.
- The rental market is stable, but landlords are cautious, awaiting clearer policies.
- Developers face challenges due to limited opportunities for significant new projects.
- First-time buyers are more active, but overall market activity remains subdued.
Action Items:
1. Monitor the first budget from the new government for tax policy clarity.
2. Watch for changes in inheritance tax policies for non-UK trusts.
3. Track applicant numbers and listings to gauge market activity.
Overall, while the market is currently in a holding pattern, future developments in government policy and mortgage rates will be critical to watch.
