Tax changes in the UK turn trophy house buyers’ market around in late 2024
London’s super-prime residential property market had a quieter year in 2024, with fewer mega-deals taking place at the very top of the price scale.
Real estate agents specializing in London’s most luxurious homes reported no property sales exceeding £100 million ($125.6 million) this year. For comparison, during the 2021-2023 period, super-prime property deals averaged $1.5 billion per quarter.
The highest recorded price for a super-prime property in 2024 was £80 million, paid by film director and fashion designer Tom Ford for a mansion in Chelsea. This was a sharp contrast to 2023, when multiple high-value deals were made, including the £138 million sale of Aberconway House in Mayfair to billionaire Adar Poonawalla and the £113 million purchase of Hanover Lodge in Regent’s Park by fellow Indian billionaire Ravi Ruia.
A Quiet Year for Super-Prime Properties:
Many ultra-wealthy buyers paused their property investments in 2024, waiting for clarity on the UK’s general election, new Labour government, and changes to property taxes such as Stamp Duty and the non-dom regime.
While the ultra-prime segment (£20 million and above) saw a drop in activity—down 25% to 35%—the lower super-prime market (£10 million-£25 million) fared better.
“We’ve completed over 12 major deals for homes valued above £10 million across Prime Central London (PCL) this year, but it’s been a challenging period for properties worth over £20 million,” Paul Finch, director and head of new homes at Beauchamp Estates, told The National.
For example, a six-bedroom Belgravia mansion, once the Italian embassy, sold for £21.5 million just before UK Chancellor Rachel Reeves announced a Stamp Duty increase for overseas buyers from 5% to 7%. Tom Ford’s Chelsea mansion purchase also occurred shortly before the autumn budget.
Rising Activity Before the Budget:
Between August and October, there was a surge in sales as sellers rushed to close deals before the new tax changes. Peter Wetherell, founder and executive chairman of Wetherell, highlighted this “wave of activity,” particularly from American and Indian buyers who acted quickly to beat the Stamp Duty rise.
Knight Frank’s Global Super Prime Intelligence report supported this trend, showing that London was the only city among 12 global markets to record an increase in $10 million-plus property sales during the third quarter. Prime Central London saw 51 such sales, up from 47 in the previous quarter.
Discounts and Price Negotiations:
Price negotiations also became more intense in 2024, with buyers gaining an edge. Average discounts in the PCL market rose to 8.6% in the third quarter, compared to 7.7% earlier in the year. Additionally, 79% of prime property sales during this period were completed below the initial asking price.
Despite these discounts, sales volumes rose. Compared to the second quarter, volumes increased by 7.2% in Q3 and were up 14% compared to the 10-year average.
Changing Buyer Demographics:
The origins of London’s super-prime buyers shifted in 2024. A strong dollar attracted American buyers, while economic struggles in the UK and Europe kept many local and European buyers on the sidelines.
“Middle Eastern and American buyers dominated the luxury homes market this year, accounting for nearly 50% of sales for properties worth over £20 million,” said Mr. Finch. Buyers from Saudi Arabia, the UAE, and Qatar were particularly active, alongside some Indian, Chinese, and Hong Kong buyers, though their numbers were lower than American and Middle Eastern purchasers.
Location Trends:
Certain areas in London performed better than others. While property prices in Knightsbridge and Belgravia fell by 5.6% in Q3, South Kensington saw a modest 1.2% price increase.
“Sales in Belgravia, Westminster, and Whitehall have been slower this year,” Mr. Finch said. “However, areas like Bayswater, Notting Hill, and the Hyde Park Estate remain popular, particularly with Middle Eastern, American, and European families. Chelsea, St John’s Wood, and Notting Hill have also seen strong performance.”
In contrast, Mayfair continues to be the standout location for super-prime property. Despite price drops in neighboring areas, Mayfair has remained stable, with buyers seeking high-quality homes. Strict planning restrictions limiting new properties above 2,150 square feet in Mayfair and other central areas will likely sustain property values for years to come.
Exciting Developments in Mayfair:
Mayfair’s appeal is boosted by luxury developments like 1 Mayfair and 100 Piccadilly.
1 Mayfair, with apartments ranging from 3,000 to 10,000 square feet and prices starting at £35 million, is set to become a landmark address. “We’ve seen significant interest from Middle Eastern buyers, particularly from Saudi Arabia, Bahrain, the UAE, and Qatar,” said Lars Christiaanse, group director of sales at Caudwell, the developer behind 1 Mayfair.
Similarly, One Carrington in Mayfair offers 29 luxury apartments, including a £25 million four-bedroom penthouse, while 100 Piccadilly features 36 high-end residences.
Looking Ahead to 2025:
While global sales of $10 million-plus properties fell 8% in volume and 17% in value in Q3 2024, experts are optimistic about London’s super-prime market in 2025.
“There’s significant pent-up demand, and the first half of 2025 will be extremely busy,” Mr. Finch said. Buyers from the US and Middle East, particularly Saudi Arabia, the UAE, and Qatar, are expected to drive the market.
Mr. Wetherell predicts a 30% increase in Mayfair sales in 2025, with high-end property values rising by 1% to 2%. “The most sought-after homes will see price growth, while other properties are likely to remain stable,” he concluded.
