It was the second year since 2011 in which no sales above £50 million (S$86 million) were recorded, data from property company LonRes revealed

London’s luxury property market is set for its worst year since 2020, after a series of tax measures dampened sentiment among wealthy and discretionary buyers.

It was the second year since 2011 in which no sales above £50 million (S$86 million) were recorded, data from property company LonRes revealed.

While 2024 brought in at least four £50 million-plus deals – including one mansion bought for £139 million – the biggest transactions this year were around the £40 million mark.

Data from broker Savills shows that, in the first three quarters of 2025, residential sales above £5 million tumbled 18 per cent from the same period a year earlier – putting them on course to be the lowest since the Covid-19 pandemic locked down London.

Frances McDonald, director of research at Savills, blames the slump on the uncertainty prior to the UK Budget statement in November, and the angst around the ruling Labour Party’s abolition of a system that allowed wealthy foreigners, or so-called non-doms, to avoid UK taxes on their overseas earnings.

The most discretionary, top end of the market is experiencing the greatest downward pressure on prices, McDonald said.

The pool of buyers who are typically interested in this price point had already shrunk after the end of the non-dom regime, and some who remain, are hesitant to act, McDonald said.

The broader slump in the London market, driven partly by hikes to the stamp duty transaction tax, and the coming so-called mansion tax on homes valued at more than £2 million, prompted some desperate vendors to offer discounts of as much as 50 per cent over the past year.

Many of this year’s noteworthy purchases took place in the desirable West London enclaves of Holland Park and Notting Hill.