"Whilst sentiment is cautious and many have ruled out London for now, others still value its appeal as a place to live and do business in, and we continue to see examples of investors and buyers attracted here for a diverse range of reasons"
- Jo Eccles - Eccord
Shifts ahead of the autumn Budget
“After a busier-than-expected summer, the forthcoming Budget is having an impact and September activity has been muted as a result, with more buyers and sellers adopting a wait-and-see approach. With the Budget scheduled for the end of November and the holiday season immediately after, in reality, this means many will wait on the sidelines until early 2026,” explained Eccles.
“There is a window of opportunity for buyers who are prepared to transact before the end of the year, with many fatigued sellers – some who have been on and off the market for the last two years – eager to secure a quick, clean sale in the next three months. Some sellers remain incredibly discretionary, however, and in those cases we are still having to play lengthy waiting games for their expectations to come down.”
Eccles noted that houses continue to demonstrate greater resilience than apartments, reflecting domestic and needs-driven demand. “One £4.4m house we were considering for a client in Hampstead had three serious buyers and a full asking price cash offer within one week of coming to the market,” she said.
“The top end above £10m remains discretionary and is experiencing the greatest downward pressure on prices, as the pool of buyers has shrunk since the end of the non-dom regime and many are holding off buying until there is more tax certainty.
However, high-value transactions are happening, for example, a £24m apartment in Kensington has just exchanged within a week. High net worth buyers are acting decisively when they see genuine value and opportunity,” Eccles added.
She also highlighted a noticeable pattern among some clients who are stretching budgets to secure preferred locations or larger homes. “Interestingly, of our clients' buying, several have shown a preference to stretch budgets in order to secure their preferred location or larger space. We have just acquired a property in prime Chelsea for a European client who had been renting and was ready to buy with a budget of £3m - £4m. Having shown them the options across peripheral areas such as Battersea and Fulham, alongside prime Chelsea and Belgravia, they chose to stretch to the top end of their budget to remain in their preferred location. This is a classic example of buyers having to think long term with their purchase decisions.”
Possible tax reform could shift buying patterns
“One property tax reform reportedly under consideration is to replace stamp duty with an annual property tax on primary residences worth over £500,000, charged at 0.54% between £500,000 and £1 million, rising to 0.81% over £1 million,” Eccles said.
“This means for someone buying a £1 million property, the £43,750 stamp duty charge would be replaced with a £2,700 annual tax, or for a £2 million property, £153,750 stamp duty would be replaced by an annual tax of £12,150. Whether buyers would be better or worse off would depend on how long they owned the property - in these two examples, the tipping points would be 16.2 years and 12.7 years of ownership, respectively.
“If this proposal did come into effect, it would bring the welcome return of the 3-to-5-year purchase, with people once again moving up and down the ladder with each life stage, in contrast to the minimum 7-to-10-year timeline buyers have adopted in recent years.
“Several of our clients have indicated they would welcome this change, as it would allow them to buy for the here and now rather than attempting to futureproof their purchase in order to justify the stamp duty cost. In recent years, we’ve had to encourage clients to think carefully about how many children they might have and when, or where their toddlers might go to secondary school – despite it being difficult to plan that far ahead with any certainty.”
Inflows of capital balance out exits
“Whilst sentiment is cautious and many have ruled out London for now, others still value its appeal as a place to live and do business in, and we continue to see examples of investors and buyers attracted here for a diverse range of reasons,” Eccles noted.
“At an institutional level, there has been a recent influx of international developers backing London for the long term. For example, Arada, a Dubai-based developer backed by UAE and Saudi royalty, has just acquired a £230m majority stake in high-end developer Regal, and Norges Bank has recently made a £306m investment in Mayfair and a £570m purchase of a 25% stake in the Covent Garden estate.
“On an individual level, UK universities remain a significant draw and we’re seeing a growing number of European families considering buying a property here for children who are studying in the UK for degrees and master's, and are likely to remain when they start their careers. This cohort will wait for further tax certainty in November, but buying a London property over the mid-term is strongly on the cards for them.
“American buyers also continue to make up a significant proportion of our client base, either relocating here full-time or acquiring pieds-à-terre in case they wish to live here in the future. This is being fuelled by political uncertainty, but specifically over the past month or so, a growing nervousness about potential future restrictions on the movement of capital from the US.”
