Prime London Property Falters Under Labour
The prime London property market is feeling the pressure, with new figures revealing it has underperformed the wider UK housing sector since last summer, a surprising twist given its historical resilience under Labour governments.
As reported in CityAM, data from estate agents Benham and Reeves shows average London house prices have dipped 0.5 per cent since July 2024. The downturn is more pronounced in affluent areas, with prices in Kensington and Chelsea falling by 14.6 per cent, and Hammersmith and Fulham down 12.4 per cent.
“The prime London market is a very different beast compared to the rest of London, let alone the UK,” said Marc von Grundherr, director at Benham and Reeves. “While the market was already sluggish before the election, the Labour victory accelerated the decline.”
He pointed to several contributing factors: the government’s decision not to extend stamp duty relief, the freezing of inheritance tax thresholds, and significant changes to the non-dom tax regime.
CityAM reports high-end London house prices slipping as political shifts and tax changes rattle the market.
Jonathan Hopper, CEO of Garrington Asset Management, noted that political uncertainty and rising taxes have prompted an exodus of wealthy residents. “Many are rethinking their ties to London,” he said. Still, he stressed that confidence in prime UK real estate as a long-term investment remains intact.
While sales have slowed, the rental market is thriving. CityAM highlights data from Lonres showing rents for prime central London flats jumped 7.9 per cent in Q1 2025 from the previous quarter, and are now 11.3 per cent higher year-on-year. According to Hopper, prime rents are around a third higher than pre-pandemic levels, reflecting a shift in demand as high-net-worth individuals opt for flexibility and service quality amid an evolving UK landscape.
In the meanwhile, the billionaire and millionaire exodus from the UK gathers pace, as ultra-left Labour policies drive out wealth creators like Ian and Richard Livingstone, owners of a £9bn property empire and top Goldman Sachs banker Richard Gnodde, who have now fled to Monaco and Milan to escape punitive tax crackdowns.
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