So far in 2025, one headline has summed up the state of the market best: “The toughest seller market in a decade.” Listings are up, prices are still edging downwards, and sentiment remains fragile.
Mortgage rates in the UK are still relatively high compared with Europe, and confidence in the new Labour Government remains cautious, with fears that tax rises will outweigh any meaningful housing reform. First-time buyers continue to face major hurdles, with large deposits required despite recent price corrections.
Mainstream agents are reporting weak buyer sentiment, while housing stock now sits well above pre-Covid levels. At the same time, changes to non-dom rules and higher Stamp Duty Land Tax (SDLT) charges have pushed many international buyers to the sidelines. This has created opportunities for UK buyers to step into the market at reduced prices, though rising leasehold ownership costs – linked to building safety legislation and complex lease structures – have added fresh challenges.
Property Market Update 2025: International Buyers and Investment Trends
While some overseas buyers remain hesitant, US and Middle Eastern investors have returned, drawn by the weakness of sterling. Even so, the overall market clearly favours buyers over sellers.
There has been reasonable activity in the mid-range (£2m–£7m) sector, though the super-prime market (£15m+) continues to move slowly, reflecting the broader caution among ultra-high-net-worth purchasers.
London Property Outlook: Signs of Recovery Beyond 2025
Most market commentators believe growth will resume in 2026 or 2027, provided interest rates begin to fall and global geopolitical conditions stabilise. London’s enduring appeal as a safe haven for wealth is unlikely to fade, but concerns remain.
If the capital cannot supply the larger, high-quality new-build homes favoured by international buyers – and continues to deter them with rising property taxation – recovery could take longer than expected.
Off-Market Opportunities and Buyer Behaviour
As in previous years, the very best properties are often available off market. However, our experience shows that while every property ultimately has a price, the premiums being asked for some off-market homes are not always rational or justifiable, leaving buyers to tread carefully in 2025’s shifting landscape.
