Transaction friction & market misreadings, what the media misconstrue.
If you’ve been following the UK housing discussion, recent headlines on London’s luxury property slowdown may seem alarming, to say the least. But the full picture across the country (including London), and particularly in Edinburgh, is far more nuanced than the media would have you believe.
The invisible brakes on property mobility…
One of the biggest distortions in the housing market comes from transaction taxes. Stamp Duty (England/Northern Ireland) and LBTT (Scotland) act as artificial brakes. These taxes don’t destroy demand, but they do delay it. They create friction for:
First-time buyers wondering if it’s the right time now
Growing families who might otherwise move up the ladder
Older homeowners weighing whether to downsize
Investors navigating narrow profit margins
And in high-value markets, that friction becomes a major factor. Sellers of £10m plus homes are increasingly renting out their properties, where annual rental income of £500,000 plus makes holding a better option than cutting the price.
The result? A slower, stickier, less dynamic market, not because people don’t want to move, but because the system penalises them for trying.
Is the London housing market really broken?
Yes some properties in the £15m–£25m range are sitting longer on the market. Those top-end London properties are taking longer to sell, but sellers in this tier aren’t distressed or desperate. They’re strategic.
Many are simply choosing to rent out, not sell. The capital flows and holding power in this bracket gives owners the luxury of waiting. Many are holding on tighter, opting to rent at enviable yields rather than accept discounts.
Meanwhile, the mid-tier London market (£700k–£1.5m) remains resilient. These segments continue to transact and perform, especially in zones with strong infrastructure and lifestyle pull. Think families, professionals, and long-term owner-occupiers. This is where the real liquidity sits, not in the ultra-prime bracket that makes headlines.
Much like London dominates and distorts the UK narrative, Edinburgh often distorts Scotland’s. Though Edinburgh's property market tells a different, brighter story:
Average house prices in Edinburgh rose to £294,000 in May 2025, increasing 7.6% year‑on‑year, above the Scottish average of 6.4% and the UK average of 3.9%
In Q2 2025, the average selling price in Edinburgh and nearby regions reached £287,830, up 4% year‑on‑year, with city centre pricing at £307,412, an 8.8% increase.
Edinburgh alone accounted for 56% of all sales over £1 million across Scotland in 2024, that’s 53 homes in the EH3 postcode area.
Rising overseas demand, particularly from North America
Such dynamics showcase a durable, improving market, fuelled by constrained supply, consistent demand, and investor confidence.
The real problem is headlines fuelled by extremes.
When a £20m house in Belgravia lingers, it becomes national news. When 100 homes in Birmingham or Bristol sell quickly, it rarely does. The real market action is in homes priced between £250k–£1.5m, homes that still sell, move, and increase in value.
But here’s the truth:
London’s top end is shifting strategy and recalibrating, not collapsing
Edinburgh remains resilient and globally attractive
Regional markets move at their own pace, based on local supply and economics, not national averages.
National averages don’t tell the full story. And headlines built around the very top of the market can skew both sentiment and decision-making.
A more nuanced view on property
Whilst it’s frustrating that transaction taxes penalise mobility, we do not need to panic about a UK-wide crash. What we’re seeing is a recalibration, not a collapse, adaptation, not retreat. And a shift in strategy that rewards those who understand the market’s true shape, not just its noise.
Remember:
Transaction taxes are real friction, not economic collapses, and modernisation would boost mobility.
A slowing down of London’s premium property market does not equate to a UK-wide slowdown.
Edinburgh offers consistent capital growth and liquidity, powered by academic, tech, and financial sector strength.
Are you a buyer, advisor, or investor navigating post-pandemic property uncertainty? What are the main things you’re currently noticing or experiencing with the property market? Let’s go beyond headlines and talk about what’s really happening at local level.
