Making sense of prime London in 2024
The Year Ahead by Hugh Obbard 06/02/2024

Prices here are around the same as they were 10 years ago, while the national picture is up circa 40% over the same period. But as we begin the new year, might we be at the point where prime properties in the capital’s central postcodes will finally return to growth?

2024 marks 30 years since Obbard was founded – and if nothing else, the start of our fourth decade is a moment to look both forward and back. As we noted in my market commentary last autumn, I have always believed in learning the lessons of recent history.

Below is a short summary of the challenges and opportunities faced by both the broad UK house market (average price £286,489) and the Prime Central London market (average price in Kensington & Chelsea £1,781,218) over the past decade – together with our best predictions for the next 12 months and beyond.

Prime Market


• Stamp Duty more than doubling.
• Mortgage interest relief on rental investments removed.
• Inflation hitting 11.1%.
• Interest rates rising from 0.5% to 5.25%.
• 3 general elections; 5 prime ministers.
• Brexit/Corbyn/Truss/Covid.
• General weakness in global markets.
• Geopolitical turmoil.


• Sterling falling 15% against US dollar.
• Critical undersupply of housing stock.
• Rents rising by around 20% on average against pre-pandemic levels.
• High levels of cash purchasers.
• Robust super-prime sector.
• Noticeable inflows from US; steady demand from Mid-East.

Domestic Market


• Rising mortgage rates from late 2022.
• High energy costs following Ukraine invasion adding to squeeze on household budgets.
• Additional inflationary pressures adding to cost of living challenges.


• Extremely strong labour market.
• Government support (Help-to-Buy and Stamp Duty holidays.)
• Mortgage rates falling to 1% and availability of five-year fixes.
• New stress test rules from 2015 to prevent excess bank lending.
• Banks’ support for borrowers leading to minimal repossessions.
• Continued trend of equity passed down generations (Bank of Mum & Dad.)
• Forced savings due to Covid impact plus Government financial support (Furlough, etc.)


• Relatively benign political outlook, with assumption Labour Government wins election in mid/late 2024 (*relative to other elections/political changes around the world).
• Inflation falling nearer to bank official 2% target by end 2025.
• Base rates to start falling by mid-2024.
• Competitive lending market.
• Sterling to strengthen as US dollar weakens.
• Number of new-builds falling to near all-time low.
• Higher stress-test levels restricting domestic market as well as the impact of fixed-rate loans ending.
• Some easing of super-prime sector as buyers await clarity on Labour’s plans for Non-Doms, etc.
• London property prices presenting both value and cyclical opportunity against other key prime markets (Singapore, Dubai, Miami, Mumbai etc.)

Sticking Our Neck Out (How things might look in two years’ time)

• Base rates close to 3-3.5%.
• Prime Central London gross yields stabilise at circa 4%.
• Nationwide residential yields in mature sectors 6-6.5%.
• Sterling 10% up on the US dollar.
• Inflation volatility not quite tamed but managed within a reasonable range.
• UK domestic politics seen as stable and centrist against more general turbulence worldwide.
• House building still lagging way behind target as changes to planning rules drag out.
• Geopolitical uncertainty to continue.
• Significant numbers investing into Prime Central London once more, as commentators acknowledge and report on recovery.

In Conclusion…

Calling a recovery in 2024 may seem a little premature, but we feel this is a classic situation where the early bird catches the worm. If 2025 proves to be the year where we see the market turn decisively, it will be a moment in which opportunity remains tight and competition is especially fierce. Anticipating and acting early will pay dividends.

The Year Ahead by Hugh Obbard 06/02/2024
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