London’s mansions are struggling to sell
There were just 10 sales above £30 million in the 12 months to July, compared with 38 in the previous period
LONDON’S most expensive homes are having a tough time selling, with both demand and deals down. According to a new report from real estate company Knight Frank, there were 22 per cent fewer sales above £10 million (S$17 million) in the 12 months to July, compared with the same time period from 2022 to 2023.
The picture is gloomier for the priciest properties. There were just 10 sales above £30 million, compared with 38 in the previous period. In total, super prime sales volume in London came in at £2.77 billion in the 12 months to July, down from £4.3 billion in the period ending in July 2023.
“Sentiment in prime central London is significantly down,” said buying agent Camilla Dell, founder of Black Brick. “The current market reminds me a little bit of the financial crisis in terms of what I’m seeing in terms of the volume of stock available, price reductions and nervousness in the market from vendors.”
Brokers chalk much of the market uncertainty to July’s election, which was well-flagged to be a shift in government during the proceeding year. The Labour Party, which won a resounding victory, had been consistently polling higher than the Conservatives, who had been in power for over a decade. High interest rates also weighed on sentiment; the Bank of England delivered its first cut in four years just this August.
Uncertainty has now shifted onto the ramifications of the new government, specifically uncertainty surrounding a new tax regime, said Stuart Bailey, head of super prime sales London at Knight Frank. Tax hikes have been floated by the new Labour government, including possible increases to capital gains and inheritance taxes, which will be revealed in the upcoming UK budget, set for Oct 30.
It’s also likely that the government will overhaul its system for the 74,000 individuals living in the UK who do not pay tax on their non-UK income, known as “non-doms”. These include some of the world’s richest people and those who have reached the highest rungs of finance; more than 20 per cent of the UK’s highest-earning bankers have been non-doms at some point, according to 2022 research. Famously, the wife of Rishi Sunak, Britain’s former prime minister, also claimed non-dom status.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
The unanswered questions around higher tax regimes and plans to do away with preferential tax treatment for wealthy foreigners have been spooking rich buyers, brokers said.
“The budget is making people wait and see – so it does not matter whether it is good, bad or ugly. The point is that it’s uncertain, so people are hesitating now,” said Bailey.
The report said that properties in prime central London above £10 million are 14 per cent below their peak in September 2015. That’s even more dramatic in US dollars, where the decline is 25 per cent, given the weakening of the pound since the Brexit vote in 2016. This is seen in the amount of American buyers coming into the London market, whose US dollars go further than in the past.
“If you are a buyer, and especially a cash buyer, it’s blatantly a good time to be buying right now at this low point, when there’s not too much competition with other buyers,” said Bailey of the current super prime market, which he characterises as “frustrating”, especially at the top end. “But we are just in a vacuum period of sitting on the fence with nothing happening until the budget.”
Share with us your feedback on BT's products and services
