The capital is no longer hot property — prime prices have fallen, meaning you can get more for your money. And experts say you can’t blame it all on Labour
By Emanuele Midolo
Dear American multimillionaires looking to buy a home in the UK, I have good news for you: if you have $1 million to splash, you can now get more bang for your buck in London.
The annual Wealth Report published today by the estate agency Knight Frank shows $1 million (about £800,000) now buys you 34 sq m (365 sq ft) in London, up from 23 sq m (248 sq ft) a decade ago — a 43 per cent increase. This makes the British capital better value than it has been for years.
To put it into context, a 200 sq m (2,150 sq ft) penthouse in, say, Marylebone, would now cost you just short of $5.9 million, compared with $8.7 million it would have cost you ten years ago.
This is because prices have constantly gone down over the past couple of years, while tax rises have dissuaded buyers from moving here, leading to one of the most stagnant periods for the London luxury property market in decades.
Plummeting prices and a favourable currency fluctuation mean that, although bricks and mortar in the capital is still among the most expensive in the world, it is significantly more affordable than it was a decade ago.
London has seen the biggest shift since 2014, says Liam Bailey, the global head of research at Knight Frank. “The three markets that stand out where actually you’re getting more for your money now ten years on are London; Monaco (5 per cent more space), where you’re getting 19 sq m for your million dollars rather than 18 sq m; and New York (2 per cent more space), with 34 sq m rather than 33 sq m.”
How much space $1 million gets you in London and elsewhere
Searching for a luxury home in London? You can get even more for your money in other places.
mericans already made up a quarter of the buyers of the capital’s most expensive properties last year, according to the ultra-prime agency Beauchamp Estates, based on data from the property portal LonRes.
“That’s great for London,” says Camilla Dell, a buying agent and founder of the buying agency BlackBrick, of the latest figures. Some 25 per cent of Dell’s clients are Americans. “We’re pretty busy, despite the fact that the super-prime end of the market is coming down — and that’s just a fact.”
“I’ve just signed on a £20 million deal for an American client. We saved almost 25 per cent from the original asking price. Because there are very few transactions at this end of the market there’s more supply, buyers have more choice, which is fantastic. I’m inundated with options. I’ve got a dozen options for a single client in Mayfair. That’s unheard of.”
Dell says she is buying a property for an American in Chelsea near Sloane Square for close to £5 million. “They want to be close to the action,” she says. And it’s not just Americans: many other nationalities whose currencies are pegged to the dollar, such as in the Middle East or Asia, would benefit from this too.
The London prime property market could do with more millionaires. The Wealth Report calculated that the number of UK residents with assets of $10 million of more has gone up ever so slightly last year, from 55,152 in 2023 to 55,667 in 2024 — a 0.9 per cent rise. But the UK lags well behind regions such as North America, where the number of millionaires over the same period went up by 5.2 per cent, Asia (5 per cent) and even continental Europe (1.4 per cent). Recent figures claim that 11,000 millionaires left the UK last year, 157 per cent more than the previous year.
The reason for that, Bailey from Knight Frank says, is tax. And it’s not even entirely Labour’s fault, he argues.
“It actually wasn’t the last budget, it was Jeremy Hunt’s [the former Conservative chancellor]. As soon as Hunt talked about non-dom abolition and serious reform, that really slowed the market down.”
This is echoed by Paul Finch, a director and head of new homes at Beauchamp Estates, who says: “Over the past six months we have seen a dramatic shake-up in the prime central London property market which has been disrupted by a combination of stamp duty rises, the abolition of the non-dom regime and fears over capital gains tax rises and inheritance tax changes.”
Stamp duty for overseas buyers purchasing a second home in London can be up to 19 per cent. “It was 1 per cent back in 1979,” he says. “This has resulted in a significant outflow of wealthy people from the London market. Mostly these are domestic UK residents and also overseas residents with UK passports who are selling up in London and relocating to Dubai, Switzerland, Monaco, Miami and the French Riviera.”
If the traditional markets of London, Monaco and New York have become more affordable, “emerging” cities like the ones mentioned by Finch have seen the opposite trend.
Where’s up and down in the world’s luxury housing market?
“For most of these markets there’s been a massive price uplift and therefore the amount of space you can get for your million dollars has shrunk quite considerably,” Bailey says.
The two main factors remain the same — house prices and taxes — but reversed. Dubai, in particular, has seen an eye-opening 147 per cent rise in property prices over the past five years.
Although it has slipped from last year’s second place to third, the emirate has seen a 16.9 per cent growth last year, a percentage point more than the previous year.
The other cities at the top of Knight Frank’s list are Seoul (18.4 per cent rise last year) and Manila (17.9 per cent), followed by Dubai, then Riyadh (16 per cent) and Tokyo (12.1 per cent).
Benign taxation, the Wealth Report shows, is also acting as “a pull factor” for some who have chosen to look elsewhere: again Dubai, but also Switzerland and Italy.
Daniel Daggers, the founder of the property advisory DDRE Global, who is based in London but also buys and sells homes for the super rich in Dubai, says records will continue to be broken there “but at a less ferocious pace”.
The next 12 months will be crucial, Daggers believes. “People are still enjoying it but there isn’t the same growth as before,” he says. “That’s what we’re telling our clients, that we need to look at the sustainability of these markets. There is a sense that the champagne is still flowing but the music is slowing.”
