Long considered a safe haven and prestigious location for global luxury real estate, London is now seeing this market lose its luster. What caused this sudden reversal and weakened the appeal of the British capital ?
For several quarters now, the luxury real estate market in London has been showing signs of weakness unprecedented since the Covid-19 pandemic. According to data from the first three quarters of 2025, transactions for properties valued at over €5 million fell by 18% year-on-year, returning to levels similar to those seen during the lockdowns of 2020. This decline affects all categories : no sales of more than £50 million (approximately €57.5 million) have been recorded for the second consecutive year, a situation not seen since 2011.
Tax pressure driving capital away
The cause of this crisis ? Mainly fiscal and political upheavals that have impacted the UK’s attractiveness to the wealthiest individuals. In April 2025, the government abolished “non-domiciled” status, a tax regime that allowed wealthy foreigners to significantly reduce their taxes on global income after a long period of residence in the UK.
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