London’s luxury property market is set for its worst year since 2020, having failed to score even a single £100 million transaction, as concerns over the new Labour government’s tax measures damped sentiment among wealthy and discretionary buyers.

Data from broker Savills Plc show residential sales above £5 million ($6.3 million) tumbled 23% in the first three quarters from the same period a year earlier, putting them on course for the least since the Covid-19 pandemic locked down London. While 2023 saw at least two £100 million-plus deals, the biggest transaction this year was American fashion designer Tom Ford’s purchase of an £80 million home in Chelsea. 

Still, a handful of notable deals were wrapped up in 2024, including those by Philip Muelder, partner and head of services at private equity firm Permira Holdings, and Julien Lobry, partner at hedge fund manager Parvus Asset Management.

Stuart Bailey, head of super prime sales at Knight Frank blames the uncertainty around the general election in the first half of the year and then the angst around Labour’s tax-heavy budget for the lack of blockbuster sales. “The budget bashed wealth creators in this country, and as a consequence, London will be a net exporter of wealth in the next couple of years,” said Bailey. Demand was down and supply was also lower, as sellers were hesitant to list, he added.

The broader slump in the London market, partly driven by hikes to stamp duty and the abolition of the preferential tax status enjoyed by ultra-rich UK residents officially domiciled overseas, has prompted some desperate sellers to offer discounts of as much as 30% over the past year. With prices starting to look attractive, there were a few other noteworthy purchases this year despite the downturn. Many of them took place in the West London enclaves of Holland Park and Notting Hill.

In October, Abu Dhabi’s ruling family bought a £61.5 million property in Holland Park. Permira’s Muelder bought a £34 million property in the same district in April. Back in 2022, the Mirror reported that Muelder bought a seven-bedroom Alpine ski chalet in the Swiss village of Verbier from Prince Andrew for roughly £20 million.

Indian tycoon Harish Ahuja, who owns apparel empire Shahi Exports Pvt., bought a property in neighboring Notting Hill for £21 million in July. Lord Charles Robert Teviot, a hereditary peer, purchased a home a short walk from Holland Park, on one of London’s most expensive streets, for £20.5 million a few months earlier. Parvus’ Lobry snapped up a £22.5 million mansion in Kensington in May.

Knightsbridge slump

In Knightsbridge — a district home to the luxury Harrods department store — zero £20 million-plus deals took place in 2024, according to people familiar with the matter. Some brokers blame the lack of a dominant landowner in the neighborhood having a negative impact on values, compared with the nearby Grosvenor Estate in Mayfair and Cadogan in Chelsea, where long-established aristocratic landlords can invest in regeneration and handpick tenants.

“Knightsbridge suffers from a large stock of outdated apartment buildings, and old period properties that need refurbishment,” said Paul Finch, director of new homes at Beauchamp Estates, a London brokerage. “The scandals and negative media publicity that has hit Harrods this year has also really damaged the image of the area,” he added, referring to sexual abuse allegations against the late Harrods owner Mohamed Al Fayed.

Mayfair proved popular for mega deals in 2024, partly due to buyers choosing the neighborhood over Knightsbridge, according to Finch.

Natasha Poonawalla — the wife of Indian vaccine tycoon Adar Poonawalla — bought a £42 million Mayfair property in April. It’s a five-minute walk from the one purchased by her husband for about £138 million at the end of 2023 — the biggest deal of last year.

William Chisholm, the American co-founder of private equity firm Symphony Technology Group, also bought a £20 million property in Mayfair earlier in the year.

“Taxation costs in London remain significantly lower than rival cities including New York, Hong Kong, Singapore, Mumbai, Berlin and Madrid,” said George Brooksbank, chief executive officer of investment firm Fairway Capital, which sold a £26 million apartment on the site of a former Rolls Royce HQ in Mayfair last month. That makes London real estate an attractive investment despite a mix of headwinds, he added.

Representatives for Poonawalla and Muelder declined to comment for this story, while those for Chisholm, Lobry and Lord Teviot didn’t respond to requests for comment.

To be sure, price cuts have been a major factor in getting sales across the line this year. Notable properties like the palatial Marylebone mansion owned by West Ham United Football Club Chairman David Sullivan and the stately home in Denham owned by business tycoon Mike Jatania have dropped asking prices by as much as £10 million.

“Like the Four Horsemen of the Apocalypse, the combination of stamp duty rises, changes to the non-dom regime, the election and the uncertainty generated by the new government has created a staccato style market with stagnation,” Beauchamp Estates’ Finch said. “Billionaires and investors are selling up in London and relocating to sunny wealth hubs like Dubai, the French Riviera and Monaco.”