London prime market pauses ahead of Budget

The final quarter of 2025 is unfolding under the shadow of growing speculation around potential property tax reforms, and the uncertainty is beginning to take a clear toll on the prime residential market. At LondonDom, we’ve seen this hesitancy play out across conversations with buyers and sellers alike—particularly those transacting at the upper end of the market.

Confidence among high-value home movers has weakened, with many buyers taking a step back from immediate decisions. Second-home purchasers and investors are proving the most cautious, even in locations where recent price adjustments have presented attractive value. For many, concerns around the potential extension of capital gains tax to include existing or future gains from higher-value homes have become a major factor in delaying transactions.

In Prime Central London, values have declined by 1.8% over the past quarter—the sharpest fall since the post-Brexit period in 2016. Prices in this ultra-prime segment are now approximately 24% below their 2014 peak. The broader market has seen a noticeable dip in new listings and buyer demand at the £1 million+ level, reflecting a widespread “wait and see” approach ahead of the Autumn Budget.

The timing of the speculation itself—months before the formal Budget announcement on Wednesday, 26 November 2025—has already had a tangible effect. When policy uncertainty is prolonged, buyers and sellers alike tend to pause, leading to fewer transactions and, paradoxically, potentially lower tax revenues in the short term.

Normally, the prime housing market is among the first to rebound during economic recoveries. However, in this environment, the opposite appears to be true. The market is now more dependent on needs-based movers, while discretionary buyers are largely sitting back until clearer guidance emerges. At LondonDom, we anticipate that any changes announced in the Budget will take time to filter through the market, with a more gradual recovery phase to follow. In the meantime, caution remains the prevailing tone. For those navigating high-value property decisions, strategic timing and trusted advice are more important than ever.