London’s most expensive homes are struggling to sell, with demand and offers decreasing. According to a new report by real estate company Knight Frank, there were 22% fewer sales above £10 million ($13.2 million) in the 12 months leading up to July, compared to the same period from 2022-23.
The picture is even bleaker for the most expensive properties: There were only 10 sales above £30 million, compared to 38 in the previous period. Overall, the volume of super-prime sales in London amounted to £2.77 billion in the 12 months to July, down from £4.3 billion in the period ending July 2023.
“The climate in central London has significantly worsened,” says Camilla Dell, founder of Black Brick. “The current market reminds me a bit of the financial crisis in terms of what I’m seeing regarding the volume of available stock, price reductions, and nervousness in the market from sellers.”
Brokers attribute much of the market uncertainty to the July elections, which were noted to be a change in government during the coming year. The Labour Party, which won a resounding victory, had consistently polled higher than the Conservatives, who had been in power for over a decade. High interest rates also weighed on the climate. The Bank of England made its first cut in four years only in August.
Uncertainty has now shifted to the implications of the new government, especially the uncertainty surrounding a new tax regime, says Stuart Bailey, head of super-prime sales in London at Knight Frank. Tax increases have been proposed by the new Labour government, including potential increases in capital gains and inheritance taxes, which will be revealed in the upcoming UK budget, set for October 30.
It’s also likely that the government will review its system for the 74,000 individuals living in the UK who don’t pay tax on their non-UK income, known as “non-doms”. These include some of the world’s wealthiest people and those who have reached the highest levels of finance; more than 20% of the highest-earning bankers in the UK were non-doms at some point, according to a 2022 study.
