Savvy Buyers Seize Value Opportunities in the Luxury Market – TNT

High-end property sales slowed in the second quarter of 2025, with the number of £5m-plus transactions marking the second-lowest quarterly total since 2020, according to Savills.

A comprehensive analysis of the entire market – including both new builds and resales – shows just 103 sales completed in Q2, representing a 15% decline compared to the same period in 2024. The downturn reflects the continued drag from recent tax changes and wider economic uncertainty affecting buyer confidence at the top end of the market.

However, sales volumes remain resilient by historical standards, standing 18% above the pre-Covid average recorded between (2017 and 2019).

The total amount transacted over H1 was £1.93bn, down 14% year-on-year.

“Prime Central London remains price sensitive, with market activity subdued as the winding down of the non-dom tax regime and growing economic caution weigh on buyer confidence. But savvy buyers are keeping momentum afloat,” commented Nick Maud, director of research at Savills.

“Prices across the capital’s prime markets are offering significant value. Those taking advantage of the value on offer tend to be younger domestic buyers, who are less likely to be immediately concerned about inheritance tax liability. Consequently, the classically more domestic neighbourhoods are holding up strongest.”

According to Savills, under 30s accounted for 24% of Savills London buyers in the first half of 2025, this compares with 19% over the same period last year, and 12% a decade ago.

“With the Autumn Budget approaching, the government will be examining ways to raise revenue,” said Maud.

“While there will always be a temptation to link taxes to fixed assets such as property, there are also lessons to be learnt from previous ill-fated mansion tax proposals. Ultimately, valuation challenges, and failure to distinguish net vs gross wealth, and the risk to asset-rich, cash-poor owners outweighed the modest revenue potential.”

According to Savills, Belgravia continues to lead the market for £5m-plus homes in H1 2025, favoured by both domestic and international buyers.

Sales here accounted for 12% of all £5m-plus sales in the first half of the year. Chelsea has now moved into second place with 11% of sales, overtaking Kensington, which now ranks third at 10%.

The £10m-plus market faced some of the toughest conditions in the first half of 2025, with 56 sales — 13% fewer than the same period in 2024 (64 sales).

“There is no doubt that appetite for the top end of London’s market has stalled following tax changes introduced at the last budget. But there is life in the market still, driven by decisive buyers and motivated vendors, with a flurry of deals taking place over £10m over the last few weeks,” said Richard Gutteridge, co-head of prime central London.

“Buyers are taking a wait-and-see approach amid softer market conditions, with most activity concentrated on turnkey properties located on the most desirable streets in prime London postcodes.”