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Yes, the analysis of London's property market is included in our pack
Thinking about buying a 3-bedroom apartment in Shoreditch? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other boroughs where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the London Property Pack.
Will property prices increase in London in 2025?
Yes, property prices in London are expected to rise in 2025, driven by a combination of high demand and a limited supply of housing.
Backed by our fresh, in-depth market analysis, we’re confident that London remains one of the hottest cities globally for both domestic and international investors.
Sure, there are some economic bumps like inflation and rising interest rates, but the main drivers behind London’s price growth aren’t going anywhere.
Demand, especially in the prime central areas, still outstrips supply by a mile, making any major price dips a long shot. And let’s not forget—London’s status as a cultural, financial, and political hub keeps drawing in buyers from around the world.
Signals pointing to a property price increase in London
Here are some factors suggesting prices could increase:
The ongoing shortage of housing supply in London, exacerbated by planning restrictions and limited land availability, is expected to continue into 2025, pushing property prices upward as demand remains strong.
Major infrastructure projects, such as the completion of Crossrail (the Elizabeth Line), are set to enhance connectivity across London, making certain areas more attractive and likely increasing property values in those regions.
London's status as a global financial center continues to attract international investors, who view property in the city as a safe and lucrative investment, thereby driving up demand and prices.
The anticipated stabilization of interest rates in 2025 could make borrowing more accessible, encouraging more buyers to enter the market and potentially driving up property prices.
The trend of remote working is expected to persist, with more people seeking larger homes with office space in London, increasing demand for certain types of properties and potentially driving up prices.
Government initiatives aimed at boosting the housing market, such as help-to-buy schemes, could stimulate demand among first-time buyers, contributing to price increases.
Signals pointing to a property price decrease in London
Here are some factors suggesting prices could fall:
Economic uncertainties, including potential impacts from Brexit and global economic conditions, could dampen buyer confidence and reduce demand, potentially leading to a slowdown in price growth.
Rising inflation and living costs may strain household budgets, reducing the purchasing power of potential buyers and possibly leading to a decrease in demand for properties.
Higher mortgage interest rates, compared to previous years, could make financing more expensive for buyers, potentially cooling demand and putting downward pressure on property prices.
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If property prices go up in London, how much would they increase by?
If real estate prices in London were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in dynamic, mature markets like London appreciates by approximately 2% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom Victorian flat in Notting Hill for £850,000 today, don't be surprised if it's priced between £875,500 and £909,500 this time next year.
To give you a better understanding, here is a table that shows 7 types of London real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 2%, 5%, and 7%.
| Type of Property | Average Price in 2024 (£) | Price in 2025 (2% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Victorian Flat (60 sqm / 646 sqft) | £900,000 | £918,000 | £945,000 | £963,000 |
| Modern Apartment (75 sqm / 807 sqft) | £1,200,000 | £1,224,000 | £1,260,000 | £1,284,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | £2,500,000 | £2,550,000 | £2,625,000 | £2,675,000 |
| Studio (30 sqm / 323 sqft) | £450,000 | £459,000 | £472,500 | £481,500 |
| Loft (80 sqm / 861 sqft) | £1,600,000 | £1,632,000 | £1,680,000 | £1,712,000 |
| Townhouse (150 sqm / 1,615 sqft) | £3,500,000 | £3,570,000 | £3,675,000 | £3,745,000 |
| Investment Property (50 sqm / 538 sqft) | £750,000 | £765,000 | £787,500 | £802,500 |
Everything you need to know is included in our Property Pack for London
If real estate prices go up in London, which areas are likely to see the biggest increases?
Today, people who want to move to London want the charm, but they also want modern conveniences and vibrant social scenes, which Shoreditch delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Brixton has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the London market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Shoreditch | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Chelsea | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central London. |
| Brixton | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Canary Wharf | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| King's Cross | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Notting Hill | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Camden | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Hackney | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Richmond | Medium-High | Its proximity to central London, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Peckham | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Kensington | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Westminster | High | Upcoming restoration of historic landmarks and high-profile cultural projects are driving a renewed focus on this central, historic location. |
-The best areas to buy a property in London
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation?
In 2025, London real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near London are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense cities like London, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
London's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the city’s green goals, leading to price appreciation in this category.
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