Investment Manager's Insider Report: London's Luxury Property Market Cooling Amid Tax Increase Fears
In the latest update from London's luxury property market, high earners are showing caution as concerns mount over potential tax hikes by the new centre-left government. According to property data firm LonRes, sales of prime central properties in London have dipped by 7.5% compared to the same period last year, while new sales instructions have seen an 8.1% increase. The average selling price for prime properties has also dropped by 4.2% year-on-year.
The post-election market bounce in July was short-lived, with attention now focused on potential tax increases ahead of Labour finance minister Rachel Reeves' upcoming budget announcement on Oct. 30. Nick Gregori, head of research at LonRes, highlighted the heightened negative sentiment among high-end property buyers, particularly in anticipation of 'non-dom' and other tax changes.
Prime Minister Keir Starmer's recent comments about a "painful" budget that places a heavier burden on those with broader shoulders has further fueled speculation about increased taxes for the wealthiest individuals. While some estate agents have noted strong interest from overseas buyers, others have observed current international residents looking to offload their properties.
In conclusion, the cooling demand for luxury properties in London underscores the impact of potential tax increases on high earners. The looming budget announcement on Oct. 30 has created uncertainty in the market, prompting both caution and strategic decision-making among property investors. Stay tuned for further updates on how these developments could affect your financial portfolio and investment decisions.