From the outside, Prime Central London (PCL) may appear to be an exclusive cluster of desirable locations and boroughs mainly centred around the Chelsea, Kensington, and Mayfair areas, whereby to gain entry to such locations requires more than just a large bank balance. Within this geographical bubble the property market historically, at times, has bewildered even the wider London market, seemingly protected from global and domestic affairs due to its prestige. But in recent years we have started to notice a shift.
For those within the PCL market, a paradox has arisen whereby PCL has retained its prestigious reputation, linked with its rarity, whilst evolving and growing its geographic footprint. Excitingly, this could well create opportunity for new clients to gain entry and put down roots within not only one of the most sought-after parts of London, but the world, without necessarily needing to break the bank to do so. There are multiple factors to be considered regarding why now may present more favourable conditions to access such a market, some of which we will look at within this article.
Retirement Planning
The age demographic of a tenant within PCL tends to be higher than the UK average. Speaking with Glynn Gibb – Regional Sales Director, John D Wood & Co., he shares how his teams have seen a shift in mindset especially where tenants within PCL are now considering purchasing. Financially established individuals may now be at a point in their life whereby they are thinking ahead to retirement planning. Whereas renting before had allowed for flexibility and a lifestyle to reside within some of the best postcodes, stability now becomes more important. Instead of paying someone else’s mortgage (The Landlord), an investment into their own home and property could create a form of retirement strategy in the longer term.
House prices
Bloomberg has reported that in recent times within PCL, house prices have reduced at an average of £160,000*, far above the national average. This is a sign that PCL is no longer impervious to market fluctuations and instead is being greater impacted due to market instability over the last few years. This, coupled with an imbalance of supply and demand, where supply is increasing because of factors such as Landlords and Foreign Nationals exiting the market over concerns of greater taxation, gives more choice and buying power to the purchaser, potentially allowing for prices to be driven down.
Record rental rates
For decades within PCL it has been cheaper to rent than to purchase, both in terms of upfront costs and ongoing monthly payments, due to the premium applied to the property value. However, in some instances we are now reaching a parity. As an example: a 2-bed house in South Kensington priced at £1m
**, has seen the rental rate increase to a record high of £3,750 per month. In contrast, assuming certain lender affordability criteria is met, with a 15% deposit (£150,000) a buyer could get a residential repayment mortgage on a 30-year term for approx. £3,800 per month
***. For approximately the same monthly cost, a tenant could own rather than rent giving them greater financial independence. An additional consideration factor in relation to tenants preferring to now buy, relates to how lenders have introduced more favourable deposit requirements and visa statuses for first time buyer applications, with more lenders in the market accepting factors such as 5% deposit contributions, or day 1 mortgaging on arrival into the UK for high-net-worth foreign nationals
****.
PCL is still one of the most desirable locations on the globe and holds a sense of genuine romanticism for those who wish to live in locations surrounded by links to aristocracy and iconic settings seen in films such as Love Actually, Kingsman: The Secret Service and James Bond along with countless others. The difference is that now, due to an influx of new money blending with old, and more favourable market conditions, the scope of whom may be able to purchase and live within this market is greater.
As the cold snap of winter approaches, and with prices within PCL reducing, now may be a great time to buy at a competitive price, before the market begins to thaw in the new year and we see increased competition rise again in this marketplace.
For anyone considering options, or needing guidance in relation to their affordability,
Capital Private Finance’s expert team of advisers are on hand to support.
Authors:
Amit Gupta, Senior Regional Financial Services Manager at Capital Private, [email protected]
Glynn Gibb, Regional Director at John D Wood & Co., [email protected]
Correct at the time of publishing – 27/11/25
*House Prices Crash Across London’s Wealthiest Neighborhoods - Bloomberg
** Internal data John D Wood & Co., Kensington
***Mortgage repayment calculator | Mortgages | Halifax Intermediaries
**** www.thenottingham.com
BAT approval number: MS/CPF/8420/11.25
Any fees payable will be explained in your initial no-obligation appointment, before you choose whether to use our Mortgage Services
Capital Private Finance is a trading name of Dynamo Mortgages Limited, which is authorised and regulated by the Financial Conduct Authority, Financial Services Register number 472199.
Registered in England and Wales under company number 05695802. Registered office: Countrywide House, 6 Caldecotte Lake Business Park, Caldecotte Lake Drive, Caldecotte, Milton Keynes, United Kingdom, MK7 8JT. VAT Registration Number: 500 2481 05.
