Billionaires and multimillionaires worried about possible tax rises spent £244 million less on ultra-luxury property in the first six months of this year compared with 2023, according to data shared with The Times.
Deals for properties in London worth more than £15 million between January and June this year were worth a combined total of £795 million — this is a 23 per cent fall in value from the £1.039 billion seen in the same six months in 2023, the analysis shows.
This prime duplex on Charles Street, Mayfair, has just sold for almost £15 million
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While the number of actual sales at this price point was almost identical (46 compared with 45 a year ago), the size of the properties being bought by billionaires is dramatically smaller, as these wealthy buyers become more cautious about investing.
The average prime house or mansion bought in the first six months of this year has 6,500 sq ft of space, compared with 11,200 sq ft in 2023. Meanwhile, the apartments being bought at this price point are also smaller: 4,000 sq ft today compared with 7,380 in 2023.
The analysis was carried out by the luxury agency Beauchamp Estates using a combination of its own data and the LonRes property transaction database, which covers the majority of luxury purchases in London.
Separate analysis by LonRes, covering June 2024, showed a similar slowdown. The data showed 17 per cent fewer transactions in that month, which was in the direct lead-up to the general election, and an 8.4 per cent dip in new instructions.
A penthouse with a two-bedroom apartment at Oceanic House in Westminster, central London, was sold for £15 million recently
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Inside the penthouse at Oceanic House
Luxury agents said the sharp slump in the amount of money being spent on prime properties — the first since 2021 — came as a result of growing concern among the super-rich about an imminent government clampdown on Britain’s 74,000 non-domiciled residents (“non-doms”), which has reduced how much money foreign buyers are prepared to commit to London property.
Non-doms pay little or no tax on money they earn overseas — an attractive prospect for multimillionaire or billionaire buyers here. However, in the spring budget, the former chancellor Jeremy Hunt announced he would axe the special status, while Labour has since said it will be even tougher on non-doms.
“This has already resulted in a huge numbers of high-net-worth individuals [roughly defined as having liquid assets between £5m and £30m] and ultra-high-net-worth individuals [assets over £30m] actively exploring leaving the UK … as most high-powered businesspeople are digital nomads and can effectively operate from anywhere around the globe,” Mark Pollack, co-founder of Aston Chase, a luxury agency, says.
“We fear this will prove to be a huge own goal for the UK and particularly damaging to the London economy.”
Figures released this week showed the amount of tax paid by people with non-dom status hit £8.9 billion in the 2022-23 financial year, up six per cent on the previous year. The number of non-doms rose to 74,000, up from 68,900 the previous year — but this was before Jeremy Hunt’s announcement of a toughening of the rules.
Pollack adds that prospective super-wealthy buyers from overseas — who agents say mainly come from the US, India, Saudi Arabia and the United Arab Emirates — are also wavering because of rumoured plans to increase the rate of capital gains tax, the levy that sellers pay on the profits from a second home, or even to introduce it for the sale of first homes. “This would have disastrous consequences,” he warns.
A penthouse and staff flat in Greybrook House, opposite London’s Claridge’s hotel and valued at £21.5 million, sold in December 2023
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Beauchamp says that, amid fear over tax rises, international buyers are increasingly focusing on low-tax destinations like Dubai. It said last year there were twice as many deals for homes valued at more than £15 million in Dubai than in London. It also highlighted that Miami and the French Riviera were now proving more popular than London.
“Some of this is due to the general election and uncertainty over a Labour government and taxation,” Paul Finch, a Beauchamp director, says.
Beauchamp’s figures, which show the 23 per cent fall include properties bought by residential buyers and investors. However, taking out the figure for investors and including only residential buyers, the figure was £731 million in the first six months of this year, a 12 per cent drop from the £829 million spent during the same period of 2023.
“We are still seeing offers on big houses and mansions, but the offers are substantially below the asking prices so are not being accepted by vendors,” Finch says.
Peter Wetherell, whose luxury Wetherell agency dominates the luxury market in Mayfair, says he has a large number of trophy homes on the market.
“Mayfair normally has between 150 and 175 properties listed available for sale. As of today, we have 250 listed, a record-high number.”
Wetherell highlights that the market in mansions priced at more than £25 million is moving slowly. “We are currently marketing an unmodernised mansion on Piccadilly for £29.95 million. It went under offer, but then the Middle East buyer backed out. Likewise we have another mansion priced at £42 million. This has had offers, but nothing close enough to the asking price to be accepted by the seller.”
Nick Gregori, head of research at LonRes, says: “We know many buyers and sellers are playing a waiting game — mainly hoping for better economic news and political stability — and the recent general election campaign is likely to have added to this sense of caution.”
David Byers is deputy property editor
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