The property market in prime parts of London has taken a bit of a breather, with prices barely budging. Estate agent Savills reckons it’s because buyers are holding back to see what happens with the new government and interest rates.

While fancy homes in the centre of London have dipped slightly in value, family homes in leafier suburbs are holding steady. Outside of the capital, it’s a similar story – prices haven’t changed much, although places that saw big jumps in value during the pandemic are now seeing things level out.

Prime London Feels the Pinch

The average price tag for a luxury pad in central London is down just under 1% compared to this time last year – that’s a drop of about £20,000 for a £5 million property.

Savills believe changes to the “non-doms” tax – that’s wealthy people who live here but don’t pay full UK tax – might be having an effect. These homeowners are deciding what to do next, which means fewer are buying and selling.

Families Keep the Market Moving

While things are a bit quieter in central London, there’s still plenty of activity in the swanky suburbs. Prices are being propped up by families who need more space and are willing to pay for it.

Places like Fulham, Putney, and Victoria Park are particularly popular, with some big-money deals going through recently.

What About the Rest of the UK?

Outside of the capital, prices have dipped slightly. Those areas that boomed during the pandemic, like trendy coastal towns and rural retreats, are seeing a more noticeable slowdown.

Savills say this is partly because some buyers are hanging fire to see what happens with interest rates. Others are waiting to see what Labour’s plans for private school fees will be, as this could affect house prices near top state schools.

Here’s the Bottom Line

• London: Prices in prime central London are down slightly, but suburbs are holding steady.
• Rest of UK: Prices dipped slightly, with areas that boomed during the pandemic slowing down.
• Buyers are waiting to see what happens with interest rates and the new government.

The Savills data suggests that while the market has cooled down, it’s not a meltdown. Buyers and sellers are taking stock, but the fundamentals of the market remain strong.