Market Insights August 2025

Please see below our August Market Insights outlining the key themes we’re seeing in the prime central London property market this month.

As always, the team and I would be delighted to discuss any property search or property management requirements you may have.

Best wishes

Jo Eccles

Founder and Managing Director, Eccord

+44 (0) 20 7244 4482

jo.eccles@eccord.com

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Tax change rumours cause uncertainty

Recent weeks have brought a flurry of speculation about reforms to UK property taxes, causing some anxiety for buyers as the Autumn Budget approaches.

One idea reportedly under consideration is to replace stamp duty with an annual property tax on properties worth over £500,000, charged at 0.54% between £500,000 and £1 million, rising to 0.81% over £1 million. Crucially, it’s understood the annual tax would only apply to newly transacted properties above that threshold, and existing stamp duty surcharges for second homes and overseas buyers would remain in place. 

This means for someone buying a £2 million property, the £153,750 stamp duty charge would be replaced by an annual tax of £12,150, while for a £5 million property, £513,750 stamp duty would be replaced by £36,450 a year. Whether buyers would be better or worse off would depend on how long they owned the property - in these two examples the tipping points would be 12.7 years and 14.1 years of ownership respectively. 

If this proposal did come to fruition it could herald the return of the 3 to 5-year purchase, with people once again moving up the ladder with each life stage, in contrast to the minimum 7 to 10-year timeline buyers have adopted in recent years in order to justify the stamp duty cost.

The second idea being floated is to remove the existing capital gains tax exemption for primary residences worth over £1.5 million. Considering most buyers in London have not made any gains in the last decade, and buying costs, stamp duty and refurbishment expenditure are all deductible, in reality most sellers would be unaffected. Those who have owned London properties for much longer periods - often downsizers - would be, however, making them far less likely to transact.

It's very likely that property taxes and council tax will be reformed in some way in the coming years, but for now these are only rumours and policy risk can cut both ways. Someone delaying a move in the hope of stamp duty being scrapped could find themselves facing not only an annual property tax on their new home but also capital gains tax on their sale.

None of our own clients are changing plans currently, but speculation does cause uncertainty in the market and heighten the existing feeling that the government is more focused on increasing the tax burden on wealthy and hardworking people, than on creating a foundation for growth and prosperity.

Buyers are seeing value and committing

The market remains difficult to navigate but buyers are seeing sufficient value to commit to property searches, encouraged by greater choice across the market and more realistic pricing. Our search team was busy throughout the summer this year, securing client purchases from £2.5 million to £14 million, and new enquiries for September are strong with new searches lined up for a private equity client in Hampstead, a US buyer seeking a London base and a family searching in Chelsea with a £5m - £6m budget.

Yet while supply has grown, quality remains mixed and many of the best homes still carry unrealistic price tags. Fatigued sellers are increasingly motivated to transact, but with 80% of them selling at a loss, the process can feel painful and buyers who go in too low, or who are insensitive or tactless in their approach, risk alienating them at the outset.  

We saw this recently with a buyer who had missed out on several properties, including a rare lateral £5 million flat in Chelsea. He was particularly frustrated because in that case he had offered more than the successful buyer and couldn’t understand why he had lost out. When he asked for our help, the underlying issue became clear. He arrived late to our meeting, came across as arrogant and was dismissive of our guidance. Ultimately, we chose not to represent him to protect our own reputation in the market.

For most sellers, the overriding priority is to avoid the risk of their sale falling through and having to start again, or the stress of a buyer chipping the price at the last minute. They want a credible, reliable, buyer who will give them a smooth, guaranteed sale – and those who can demonstrate they are a ‘safe bet’ are at a significant advantage.

American demand shows no sign of slowing

The first quarter of this year saw the highest number of British citizenship applications from Americans relocating to the UK in twenty years, and I was delighted to discuss the factors driving this trend with The Wall Street Journal and Spear’s Magazine.

While currency advantages have softened in recent months, we continue to work with new American clients arriving or planning to arrive in London, including one buying a ‘back up’ home for £5m - £10m which they will move into full time “if Trump runs for a third term”.

Besides politics, lifestyle and the absence of gun crime, the UK’s world-class schools are a powerful draw. This October (4th – 9th), I will be in New York City co-hosting an event for American families considering a UK education for their children. If you have clients or contacts who might be interested in attending, please get in touch or feel free to forward the details.

Heads from Eton, Wycombe Abbey and Wellington College will join us, providing a unique opportunity for a fireside chat with them discussing UK educational opportunities and application strategies.

The event details can be found here: Event details Monday 6th October