Non-doms and policy changes

• The UK government’s crackdown on non-domiciled (non-dom) tax status (limiting it to four years and tightening conditions) has prompted many wealthy overseas residents to leave the UK or consider alternatives such as Italy (with its attractive flat-tax regime).
• Despite this, many non-doms are not selling their London homes — instead, they are holding onto them as long-term investments or renting them out, reflecting continued faith in London’s long-term appeal.

Market supply trends

• Overall supply in prime central London (PCL) rose by 32% above the five-year average in H1 2025 (excluding 2020).
• Supply above £5 million increased by a more modest 14%, and above £2 million by 22%, indicating that most new listings are in lower price brackets.
• Contributing factors to increased supply:
  • Stock overhang from last year’s stamp duty deadline
  • Landlords exiting due to tighter regulations
  • Political uncertainty delaying or shifting seller plans
  • Higher council tax on second homes prompting sales

Demand and price movements

• Number of exchanges above £5 million fell 15% year-on-year to June, highlighting the dampening effect of non-dom exits at the very top end.
• Below £5 million, transaction volumes remained stable.
• Offers made in PCL and prime outer London (POL) rebounded in June, up 21% year-on-year, suggesting renewed buyer interest despite policy headwinds.

Price trends

• PCL prices fell 2.5% in the year to June — the sharpest decline since April 2024 and second largest since March 2021.
• POL prices rose 0.9% over the same period but declined 0.4% in the last quarter, the largest drop since November 2023, suggesting a slowdown is taking hold in outer prime areas too.
• Nationwide data shows UK-wide prices grew 2.1% in June, the weakest growth rate in two years.

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