London's luxury property market sees sharp decline after tax breaks end

The luxury housing market in London recorded a significant decline in sales in April 2025. The reason is the expiration of stamp duty tax relief, which was in effect until March 31 of this year.

According to data from a LonRes analysis, sales of premium properties in prestigious areas of the British capital decreased by 26.2% compared to the same period in 2024. Comparison with the pre-epidemic years (2017–2019) reveals a further weakening of the market – the decline in transaction volume reached 22%.

The expiration of the so-called "tax holidays" led to increased demand in late March, followed by a sharp decline in April. The market, which until recently was dominated by a strong position of sellers, is starting to orient itself towards the interests of buyers.

In April, luxury property prices fell by 2.9%, while the number of new listings increased by 8.1%. The total number of properties on the market increased by 45% compared to April 2020.

Tax changes with different impacts on price segments

The middle price segment has been hit hardest, with the stamp duty rate for second home buyers rising from 3% to 5%. However, the luxury segment – properties worth over £5 million – has remained relatively stable.

“The market for properties priced above £5m was not affected by either the March peak or the April slump,” said Nick Gregory, head of research at LonRes. However, there has been some slowdown in activity in this segment, although levels remain close to those of the previous year.

Opposite trend in rents

The luxury rental market in London is showing a reversal. Although the number of new contracts decreased in April, rental prices increased by 5.1% year-on-year. Compared to the pre-epidemic period, the growth reached 33%.

Based on materials from prianproperty.com