London’s prime property market shake-up
From living rooms you can drive your Porsche into, to floors converting into swimming pools, there isn’t much London’s prime property magnates haven’t seen. We spoke to two experts about how the sector is facing a shake-up in the face of tax hikes, geopolitical shifts and redevelopment opportunities.
Authors
Many predicted a mass exodus of wealthy Londoners after the UK’s Labour Government announced its first budget in late 2024. Some European press even coined it “Wexit” – an exodus of Britain’s wealthy – but the truth is far more complex. It certainly hasn’t led to increased supply when it comes to London’s luxury homes - at least not yet. London prime property experts do report an increase in sales: “Our 2024 transaction volumes were up around 20% compared to 2023. For every seller, there is a buyer”, explains Jamie Hope, Managing Director of Sales at London prime property firm Maskells. “Despite headwinds, 2025 has also seen a strong start with our offer numbers up 45% year-on-year, but success requires accurate valuations.”
Traditionally about 70% of clients buying Maskells’ properties in Belgravia, Knightsbridge, Chelsea, Kensington and Notting Hill have been international. However, “the longer-term picture is causing some property owners concern,” Jamie admits, “meaning we are seeing a higher percentage of domestic buyers”.
Tax isn’t everything
“While we are seeing people leaving, London will always be a capital city on the world stage. The culture, education and the City itself means there will always be people coming to London,” Jamie notes.
Jo Eccles, Founder and Managing Director of London property search company, Eccord, splits people into mobile versus non-mobile. Mobile property owners are often older with no young children or major anchors in the UK, or they originally lived overseas and are repatriating. “Non-mobile” might have children being educated in the UK, elderly parents, or they’re anchored in the UK for work. “Only the highly mobile move for tax reasons,” says Jo.
She notes that, since the Budget, people have welcomed certainty. “Some people don’t like the rules but are pleased to have certainty to make decisions. People are more focused on their moves now,” she says.
People often sit on their hands during heightened uncertainty, adds Jamie. “Once the uncertainty is removed, or some of it, then people’s needs and desires take over. They still have a new child or need another bedroom.”
Due to buy-to-let tax hikes, a flurry of sub-£5 million properties have come on the market in recent months as landlords and pied-àterre owners consolidate. “Above £5 million, it’s a bit more nuanced,” says Jo. About 32% of UK homeowners don’t have a mortgage and many of them live in London. Wealthy mortgage-free owners can often wait for the right buyer. However, the market is very price sensitive: “A lot of buyers just won’t engage with high prices,” comments Jo.
Perks and pitfalls of other destinations
Wealthy families may look to move to the US, Dubai or Switzerland, for example. A growing number of British private schools have overseas branches serving this market. But it doesn’t work for everyone. Jo has had clients return to London after struggling to find property in Switzerland due to a lack of rental supply and international buying restrictions. Another moved back from Dubai saying they didn’t want their children to grow up being accustomed to household staff. “This notion that everyone will just exit – it’s more nuanced than that. People can’t just unplug their life in London,” says Jo.
For those who are leaving, they often retain property. “If the home is less than £15-20 million, my clients tend to keep it,” says Jo. “We have an in-house property management team which has been very busy with people renting out their London homes or wanting them kept ready for use when they’re in London.”
The Trump effect?
Regardless of your views on Donald Trump, he undeniably divides opinion. When he won his second US presidency, many wondered if it would push wealthy Democrats to London. In fact, the number of wealthy Americans buyers was growing long before the 2024 presidential election. American citizens bought 25% of all super-prime London properties worth more than £20 million ($25.5 million) from September 2023-2024, according to data from Beauchamp Estates. The share of all London property being sold to Americans went from 3.3% in the second half of 2023 to 6.1% in the first half of 2024, according to research firm LonRes.
“The Americans are definitely here,” says Jo. “They love the lifestyle. If you work on the East Coast, London has a far better work-life balance.” The absence of gun crime also makes London attractive. The prestige of UK private schools with many catering to the American education system remains a big draw.
Some of this is due to the dollar-sterling exchange rate, giving Americans bang for their buck.
“Only the highly mobile move for tax reasons,” says Jo Eccles, of Eccord.
Behind closed doors
One of the biggest changes Jo has seen in her 19-year career is the move for so many properties being sold off-market. “Many of the properties we sell over £10 million never reach the open market,” agrees Jamie. “Most buyers will have professional representation. Relationships in the high-net-worth marketplace are crucial because, in the upper echelons of market value, few properties reach open advertising.”
In 2020, roughly 30% of the properties Jo acquired for clients were off-market. Last year, this went up to 47%, rising to 73% for properties worth more than £20 million. For homes below £20 million, about 50% are sold off-market. “This makes it almost impossible for buyers to see the whole market without a buying agent,” she says.
The market fragmented as the pandemic pushed many good selling agents away from traditional companies to work in one to three-man bands or as independent consultants. New players, such as Sotheby’s, have carried out “talent raids” on big corporates. Jo estimates that two-thirds of properties she has acquired over the past three years have been through agents the client has never heard of. One acquisition she worked on involved personally speaking to 136 estate agents and brokers to cover the whole market.
This makes the market bigger and more complex. “As well as selling agents, we will be on WhatsApp groups, speaking with banks, the rental market and mortgage brokers,” explains Jo. “They might tell us about a client on bridging finance for a home which is tricky to refinance, do you have anyone who might want it? This has ballooned and arguably is the biggest challenge for buyers.” The opacity of the high-net-worth space is furthered by high-profile sellers wanting their homes to be out of the public eye.
Where are the value opportunities?
There are significant regenerations taking place north of Hyde Park, such as Finchatton’s Whitely development, driving up the value of the area. Jo recommends buying with at least a seven to ten-year investment view on these properties.
“With Central London properties only seeing modest capital growth over the last ten years, we’ve seen many people looking slightly further out for higher yields,” comments Jamie. He cites Earlsfield in Southwest London as an example, with properties now regularly hitting £1,000 per square foot. A good house on a prime road in Chelsea recently sold for £1,200 a square foot. “The gap between these primary areas and the ‘doughnut’ around them has narrowed as people have been looking for space rather than address, as the domestic market has become more of a driving force,” he explains.
Several areas have been transformed by large central freeholders, who have put significant investment into high street regeneration. Cadogan Estates, the freeholder for much of Chelsea, Sloane Street and Sloane Square is an example of this. The company invested in high streets across the area, having a significant impact on the values of Kensington and Chelsea Borough properties. Having a central freeholder can be a good indicator of how the area will perform over the long term, Jo suggests.
There are plenty of ways owners can add (or subtract) value to homes. One house that Jamie worked with has a floor that drops as the room floods to become a swimming pool. Another client and keen Porsche collector redesigned his house to allow his cars to be driven into the drawing room. “The higher the value, often the more extravagant the design. And unfortunately, for these purposes, we’re not allowed to talk about it,” he smiles.
This article is intended to be for information purposes only and should not be relied on as professional advice. Readers should seek professional advice for their individual circumstances.
Subscribe to our Insights
Subscribe to our newsletters to receive our latest news and insights
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.
Authors
Topics