The Chelsea and Kensington sales market is showing a more optimistic outlook and confidence is strengthening, with further momentum expected as more properties become available.

Strategic pricing remains crucial for sellers in generating the best possible outcome, with evidence of this recently observed on a family house generating over 25 viewings from our Chelsea office, resulting in a competitive bidding process. Striking the right balance between optimism and value is key in navigating current conditions.

What’s happening in the Chelsea rental market?

In the rental market, Chelsea remains highly sought-after, with rising enquiry levels for correctly priced properties. The impending Renters’ Rights Bill is influencing both landlords and tenants, potentially leading to higher maintenance standards and possible rent increases as some landlords consider selling. Overall, the area’s property market is poised for an active spring, balancing new opportunities for both sellers and landlords.

Chelsea housing market performance: key highlights

• ^ The number of renters registering interest with Cluttons Chelsea has risen strongly in Q1 2025
• +2.5% Annual change in achieved rents, year to Feb 2025
• -0.7% Annual change in value of prime central London property 3 months to March 2025
• +15% Annual change in number of properties available for sale, year to Feb 2025

What’s happening across the rest of the London housing market?

Gráinne Gilmore, Cluttons’ director of research, shares the latest insights into market trends.

Source: See below

Activity in the prime London sales market picked up late last year and has maintained this momentum in the first three months of 2025. Some transactions were brought forward by those aiming to beat the deadline of 1 April when stamp duty thresholds rose back to 2022 levels after the ending of the stamp duty ‘holiday’.

Sales transaction levels should remain robust in the Spring period, and the stock of homes for sale continues to climb. However, pricing in the prime central London market is down 2.6% year-on-year, while ONS data shows double-digit falls in prices in the wider Kensington & Chelsea local authority over the last 12 months. Pricing, especially for apartments used as pied-à-terres will have to take into account the higher stamp duty charges for those buying a second home, as well as the higher mortgage costs compared to early 2022. The global economic landscape remains volatile, but we are expecting two or three further base rate cuts this year which will underpin activity.

Demand in the rental market is also strong, although it has eased compared to the peak 18 months ago. The supply of homes for rent in prime London remains constrained, and this will continue throughout the year, especially as new rules come into force under the Renters’ Rights Bill. The imbalance between supply and demand will underpin rental growth, but the growth rate will be more modest this year than that of the last two years, which has led to stretched affordability in some markets.

Sources: Cluttons Chelsea, Lonres, Savills, ONS. Data referenced covers SW3, SW10 and Cluttons Chelsea patches. Source for chart: Savills.

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