London luxury property market cools as tax fears mount

Demand for London’s most expensive homes weakened in August amid concerns over potential tax increases by the new British government, according to property data firm LonRes.

Sales in prime central locations fell by 7.5 per cent year-over-year, while new sales instructions rose by 8.1 per cent. The average selling price for prime properties dropped by 4.2 per cent compared to last year.

LonRes attributed the cooling market to anxieties surrounding the Labour government’s upcoming budget announcement by Finance Minister Rachel Reeves on October 30.

Fears about increased taxes, particularly on wealthy individuals and non-domiciled taxpayers, have dampened sentiment at the high end of the market.

Although some estate agents reported interest from international buyers, others noted that existing international residents were considering selling their properties.