The Autumn often marks a turning point in the housing market after the quieter summer months. Yet this year, the transition feels fraught rather than fresh. Anticipation around the Autumn Budget (due on the 26th of November) has stoked anxiety, with speculation mounting over possible new housing taxes, further capital gains reforms, and changes to stamp duty. Labour has signalled that wealth taxation remains firmly on the table, and property looks like a convenient revenue source to fill the Treasury’s coffers.
The consequences of such policies are already much reported. The UK lost an estimated 9,500 millionaires in 2024, according to Henley & Partners, the highest outflow on record. However, UBS projects that as many as 500,000 millionaires could leave the UK by 2028, representing a 17% decline in the country’s wealthy population. For global high-net-worth individuals, relocating to Dubai, Cyprus, Italy or Greece — where tax regimes are lighter and mobility easier — is increasingly straightforward.
"For the global wealthy, London is still desirable. They just no longer want to own it."
This is not just a super-prime story. Sentiment at the top end of the market sets the tone for the broader sector. If investors conclude UK property is no longer a reliable store of value, the ripple effects will be felt across London, the Home Counties and beyond. The Budget may prove decisive: reassurance could steady confidence; punitive measures could accelerate capital flight. Though it will come too late to allay uncertainty in the traditionally strong autumn property market.
Canary in the Diamond Mine
Few segments of the housing market better capture these shifts than London’s super-prime. The Prime London Monthly Briefing (August 2025) highlights that transaction volumes at the £10m+ level remain subdued, with activity still well below pre-pandemic averages. Beauchamp Estates report that £15m+ sales dropped 25% by volume and 34% by value in 2024, marking a five-year low. Prices have followed suit.
PrimeResi estimates that PCL values have fallen 20% since 2014, with losses of 9.6% in Bayswater and as much as 26.3% in Earl’s Court. As one corporate agency put it: the last decade has been a “lost decade” for prime central London.
“UK house prices are forecast to rise around 20% by 2029, while prime London may see less than half that growth.”
Forecasts are mixed. Two of the biggest corporate agencies project a cumulative rise in PCL prices of between 9.4% and 21.6% by 2029. Both lag behind the expected growth in mainstream UK housing, and they struggle against inflation running at around 4% per year.
Yet super-prime lettings tell a different story. A recent PCL lettings survey found that properties commanding over £1,000 per week more than doubled in volume in the first half of 2025. Property Industry Eye reports that ultra-wealthy clients are increasingly opting to rent rather than buy, drawn by flexibility and wary of tax exposure. Prime London property is clearly seen as a less desirable place to park capital than previously. A recent deal in Mayfair even crossed £75,000 per week — around £325,000 per month — illustrating the extraordinary rents the sector can command. These remain exceptional cases, but they underscore the strength of demand for occupation without ownership.
With political uncertainty, its traditional ‘safe haven’ status has been eroded, making its low returns even less desirable. London remains a global draw. The cultural, educational, and lifestyle advantages are unchanged. But for now, super-prime London is clearly defined by a tension between lifestyle pull and fiscal push.
Greater London Market
Beyond the trophy addresses of Knightsbridge and Belgravia, London’s mainstream housing market is also slipping in the face of affordability pressures. According to Rightmove, the average London asking price fell 2.6% in August to £666,983, 63% steeper than seasonal norms. Year-on-year, prices are effectively flat at +0.3%.
Yet activity is up. Rightmove data shows that sales agreed in July 2025 were 8% higher than the year before, the best July since 2020’s post-lockdown surge. Stock has risen too, with listings 10% above 2024 levels, helping mute price pressures. The market has become distinctly two-speed: homes priced correctly sell within 32 days; overpriced stock languishes for an average of 99 days before reductions. Emphasising how critical accurate pricing and sales strategy is, to avoid the trap of following the market down.
Affordability remains the critical constraint. The Bank of England has cut interest rates three times in 2025, bringing the base rate to 4.5%. Two-year fixed mortgage rates now average 4.49%, down from 5.17% a year ago, according to Rightmove’s daily mortgage tracker. Buyers are taking advantage, but uncertainty over further rate cuts persists.
“The UK lost 9,500 millionaires in 2024 — and as many as 500,000 could depart by 2028.”
Still, affordability caps remain binding. In 2024, seven London boroughs recorded outright price falls. Ealing dropped 4.9%, while Hammersmith & Fulham and Kensington both fell around 3–4%. These examples underline the fragility of growth even in prime inner boroughs.
The longer-term outlook is for subdued but positive price growth. London is unlikely to lead the national market as it once did, but depth of demand ensures it will remain competitive, especially in desirable locations.
Home Counties Market
The Home Counties — long the favoured compromise between London access and rural lifestyle — had a very difficult 2024. According to Investec, properties priced above £1m fell on average 9%, with sales taking 121 days to complete, making it the slowest regional segment.
The detail matters. Kent was hardest hit, with a 9.7% drop, while Berkshire fell 9.45%. Hertfordshire proved more resilient, down 8.3%, around £133,000 below initial asking prices. For families seeking space but reliant on mortgages, higher rates were particularly punishing. With remote working now entrenched, proximity to London carries less of a premium than before. Recent ONS data confirms stagnation: the South East posted a -0.1% fall year-on-year, while the East of England managed just +0.6% growth. Forecasts suggest underperformance ahead. Savills expects just 15.9% cumulative growth over five years, versus 23.4% nationally.
Yet the Home Counties’ demise should not be overstated. Affordability will improve as rates ease, and the appeal of combining country and capital remains strong. For now, the market is buyer-friendly, and looks like good value with its fundamentals intact. If London prices continue to look unstable, this sector may even show strength, as buyers opt for a lifestyle change earlier to beat the market.
UK High-End & National Market
Zooming out, the national picture is one of stabilisation. Halifax reported house prices rose 3.3% in 2024, while Nationwide put growth at 4.7%. Rightmove notes that August’s UK seasonal dip of -1.3% leaves prices broadly flat year-on-year. Supply is recovering, with agents averaging 65 properties on their books, a level not seen since pre-Covid.
However, first-time buyers face acute challenges. Rightmove data shows that since 2022, average mortgage repayments have exceeded rental costs — a reversal of long-standing norms. In July, the average time to secure a buyer was 62 days, though competitively priced stock continues to shift quickly.
Investment dynamics are shifting. For decades, UK property was the default safe haven. Now, diversification is accelerating. Investors are allocating more capital into gold and overseas equities, even Bitcoin, citing liquidity and reduced political risk. Property remains illiquid and vulnerable to policy shifts.
Forecasts diverge. Some estimates put UK property to rise 23.4% by 2029, compared to just 9.4% for PCL. With the OBR predicting a more pessimistic 9.5% cumulative growth nationally by 2029, but even bullish takes suggest the market will deliver only modest returns. Even prized regional markets are struggling. Devon, for example, has seen demand cool as affordability tightens. While lifestyle appeal remains strong — especially for second homes — liquidity is thin and price growth has been largely flat since 2023. Analysts see limited upside compared with more active regional hubs.
Lettings Market
If sales markets are subdued, lettings are running hot. As previously mentioned there is a growing shift among ultra-wealthy clients from buying to renting. For many, renting is a hedge against tax uncertainty, with greater returns on capital to be found elsewhere.
At the wider level, ONS data shows average UK rent hit £1,343 in July 2025, up 5.9% year-on-year. In London, the average is £2,249, a 6.3% increase. Regional divergence is marked: rents in the North East rose 8.9%, while Yorkshire & Humber rose just 3.5%.
The lettings market faces a structural challenge in the form of the Renters’ Rights Bill, now nearing its final stage. It will overhaul eviction processes, require landlord registration, and increase compliance obligations. The last English Private Landlord Survey suggested nearly 30% of landlords plan to sell some or all of their properties in response.
" Average London rent has surged to £2,249 a month, up 6.3% in a year."
Yet yields remain attractive. Paragon Bank puts the national average yield at 6.7%, with the North East and Cumbria topping 8%. London yields are lowest at 5.5%, though rising rents help offset thin margins. Despite regulatory headwinds, professional landlords still see opportunity — especially outside the capital.
In short, lettings are buoyant, driven by supply shortages and demographic pressure. The challenge is whether policy will deter private landlords faster than institutional investors can fill the gap.
Buy-to-let lending has shown signs of revival, with new loans in early 2025 up sharply on the previous year. Improved rental yields and easing mortgage rates have tempted some landlords back, yet the sector still represents only around 8% of all new mortgage lending, down from more than 15% a decade ago.
Meanwhile, geopolitics are reshaping wealth flows globally. The Trump presidency has created a pro-dollar, pro-growth environment, continuing to draw capital away from Europe — with only the UAE attracting more millionaires last year. A settlement in Ukraine could see sanctions on Russia lifted, restoring flows of Russian capital into prime European markets, though this remains speculative.
Meanwhile, instability in Israel and the wider Middle East is helping London’s ailing role as a safe haven, but competing jurisdictions like Dubai, Italy and Greece are aggressively marketing themselves to footloose HNWIs. For global investors, the UK is no longer the default choice. The question is not “why London?” but increasingly “why not elsewhere?”
Mainstream UK property may deliver 1–4% annual rises, accumulating to around 20–23% by 2029.
Looking ahead, most forecasts suggest moderate growth. Mainstream UK property may deliver 1–4% annual rises, accumulating to around 20–23% by 2029. Prime central London is expected to underperform. Lettings, especially at the high end, look stronger, driven by international demand and limited supply.
The broader question is whether UK property remains the default benchmark for desirability. The trend of millionaire outflows, rising tax burdens, and global competition suggest the market’s privileged status is at risk. Yet the fundamentals — London’s culture, education, and financial centre; the Home Counties’ enduring family appeal; the country’s legal and financial transparency — still currently remain.
The Budget in November looms as the pivotal moment. If it reassures, confidence could quickly stabilise. If it punishes, wealth may continue to leave, with ripple effects across the market. A silver lining could be the prospect of Stamp Duty reform — one of the few measures with cross-party support. Loosening its suffocating grip would free up turnover in the housing market, with many viewing it as among the most damaging taxes to the economy.
For now, buyers and sellers remain engaged but cautious. The UK property market is no longer on autopilot. It is negotiating its future, delicately balancing its role as a home, a store of wealth, and a political football. Watch this space.
