I had nicknamed this story The Gentleman Butcher because all of this came from a dream I had and that was what the killer was called by the street kids. He's a well to do gentleman who hunts those with magic. Sally seeks employment unbeknownst to her in this man's house. He soon develops an odd and perverse fixation with her especially when he realizes that she can perform magic. I think in the dream she breaks a teacup and fixes it with magic or something. That will be changed because a property of her magic is that it is temporary. So she can turn rocks into diamonds but after a few hours they turn back into stones.
The young man runs in a pack of pickpockets and swindlers. Their leader is a man who is thought to have both kinds of magic but whether or not that's true is unknown. He hawks medicinal goods to crowds of people. My male protagonist uses his magic to keep the crowd's attention on the leader while the little kids pick pocket the wealthy people.
In the dream they meet when he tries to warn her about her employer. When she truly discovers the monster that her employer is she's out on the streets trying to run from him. Together Sally and my male protagonist find a way to hide from the Gentleman Butcher and eventually bring him down. Or something like that. I'll take this month to work it out and do the research.