Wealthy homeowners in London are leaving and renting out their properties ahead of April’s abolition of the non-dom tax regime, analysis from Garrington Asset Management has found.
Rental values of flats in London’s most expensive postcodes have soared by 7.9% in the first three months of 2025.
Meanwhile Land Registry data shows that average London home sold for 1.1% less in February than in January.
Jonathan Hopper, Group CEO of Garrington, said: “Rising taxation and political uncertainty have led many wealthy UK residents to reassess their presence here, and a rapid recalibration of London’s prime property market is underway.
“Some of those leaving Britain have chosen to sell their London homes, but we’re starting to see a strategic shift as others retain their UK property assets and turn to the increasingly attractive lettings market instead.
“Prime rental values in London are now a third higher than their pre-pandemic average, and while our high and ultra-high net worth clients may have lost faith in the current government’s fiscal direction, their faith in prime UK property as a reliable, long-term asset remains as strong as ever.”
The number of homes priced at over £5m coming onto the market in February was up 30% compared to the same month last year, LonRes data shows.
Pippa Mitchell, director of Garrington Asset Management, said: “The dynamics driving London’s prime property market are being redrawn, but for those who understand them and think on a generational, rather than short–term, timeline, the capital remains one of the world’s most resilient and rewarding locations for property investment.
“That’s why many of the HNW owners navigating Britain’s shifting tax sands are increasingly opting to focus on lettings rather than sales. On an emotional level, this is about those who’ve acquired a rare, irreplaceable property in the capital keeping a home they love. And on a pragmatic level, a well-managed property asset will deliver consistent income year after year, yet can also be a home to live in whenever you wish.”
