All of that points to the continuation of a price-sensitive market and the prospect that values continue to fall in real terms over the course of this year.
The extent to which this translates into nominal price falls depends on an ever evolving set of geopolitical circumstances.
In the meantime, it’s likely to make lenders more cautious about the terms on which they supply mortgage debt. This will especially impact higher loan-to-value lending, which played a major role in robust first-time buyer activity in 2025.
Prime Expectations
What then of prime property? For much of 2025, a cloud of uncertainty hung over the top end of the market as prospective buyers and sellers waited to see what the Chancellor would unveil in the Autumn Budget. As it transpired, a High Value Council Tax Surcharge was as close to the least worst outcome as we might have hoped for. And so we expected a bounce in activity in the early part of this year.
Sustaining that momentum will now prove more challenging as we head into the spring market.
This said, recent events will, in all likelihood, enhance the UK’s safe haven credentials – especially those of an attractively priced prime central London market.
Of course, that needs to be put in the context of the changed tax environment.
As a result, we are more likely to see overseas buyers looking for a potential London bolthole than the return of non doms. And the associated stamp duty liability is likely to temper any impact on values, with early evidence that it is pushing some of that demand into London’s prime rental markets.
Historically, Middle Eastern buyers have also been more active in the country house market than other nationalities, raising the prospect of increased activity in a sub market that has been subdued of late.
