Following the abolition of the non-dom tax regime, many wealthy individuals are leaving London yet choosing to rent out their prime properties, driving up rental prices while the sales market experiences a slowdown.
London’s luxury property sector is experiencing significant changes as a result of the recent abolition of the non-dom tax regime in April 2025. This policy shift has led to an exodus of high net worth (HNW) individuals from the capital, with around 10,800 millionaires leaving the UK last year, a number second only to China, according to Garrington Asset Management.
Despite departing, many wealthy owners are choosing to retain their prestigious London properties, opting to rent them out rather than sell. This trend is driving a notable increase in rental prices across the city’s most exclusive neighbourhoods. Pippa Mitchell, a director at Garrington Asset Management, explained the situation to Property118, saying: “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.”
Mitchell also highlighted the personal and practical reasons behind this approach. She said: “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.”
Data from LonRes supports this shift towards lettings, revealing that rents for flats in prime Central London increased by 7.9% in the first quarter of 2025 compared to the previous quarter. Over the past year, average rents have risen by 11.3%, signalling strong demand for high-end rental properties.
Conversely, the sales market for luxury homes is showing signs of cooling. According to Land Registry figures, average London house prices fell by 1.1% between January and February 2025. There is also an increased supply of homes priced above £5 million, with a 30% rise in listings in February 2025 compared to the same month last year, and a 21.1% increase annually in total £5 million-plus property listings.
This combination of rising rental prices and a more cautious sales market illustrates a changing landscape in London’s luxury property sector, shaped significantly by tax policy changes and the resulting behaviours of high-net-worth individuals.
Source: Noah Wire Services
- https://www.willowprivatefinance.co.uk/london-prime-residential-property-market-april-2025 – This article supports the claim that London’s prime residential market is navigating a crossroads, with prices cooling from their peak, yet there is still a strong international demand. It also outlines a positive long-term trajectory for the market.
- https://www.surreyworld.co.uk/community/real-estate-trends-whats-in-store-for-the-luxury-property-market-in-2025-4999329 – This source highlights emerging trends in London’s luxury property, such as a focus on wellness technology, which parallels the idea of HNWIs customizing properties for personal reasons. It also mentions Marylebone’s rise as a super-prime area.
- https://europeanproperty.com/the-european-luxury-property-market-in-2025-key-trends-and-investment-hotspots/ – This article discusses the transformation of the European luxury property market in 2025, including evolving investment trends, which could relate to changes in tax policies and their impact on property decisions.
- https://www.ennessglobal.com/insights/press/islay-robinson-featured-tatler-insights-londons-super-prime-property-market-2025 – This source provides insight into personalization and customization in luxury London properties, aligning with the emotional reasons HNWIs retain properties. It also highlights demand for diverse architectural styles.
- https://www.property118.com – Property118 is a platform where Pippa Mitchell, a director at Garrington Asset Management, might share insights on the dynamics of London’s prime property market. However, specific articles or statements may need to be retrieved from their site directly.
- https://landregistry.data.gov.uk – While not directly providing real-time data or specific articles, the Land Registry website offers access to property data, which could support claims about house price fluctuations and supply changes in London’s luxury market.
- https://news.google.com/rss/articles/CBMiTkFVX3lxTE1xNndCclVpYVZBMEtuZmRSbWFMbFZCXzdNbFlIOFJrYWZmaE5yV3ZsRHJ2SEpLTjZWNFFUWmRBc00zYk1vRWpSSFcyejVQdw?oc=5&hl=en-US&gl=US&ceid=US:en – Please view link – unable to able to access data
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
References April 2025 tax policy change and Q1 2025 rental data. Likely current given recent timing indicators.
Quotes check
Score:
8
Notes:
Pippa Mitchell quote appears original. Property118 and Garrington Asset Management are cited, but original attribution for exact wording requires source verification.
Source reliability
Score:
7
Notes:
LonRes and Land Registry data are credible. Garrington expertise acknowledged, though original interview source (Property118) requires reputation assessment.
Plausability check
Score:
8
Notes:
Market patterns align with tax-driven HNW behaviour. Statistical claims (7.9% rental increase, 30% listing rise) require direct source validation but appear contextually plausible.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
Narrative aligns with recent policy changes and demonstrates logical cause-effect relationships. Data sources are credible though require full provenance traces for absolute verification. No factual anomalies detected in temporal claims or statistical patterns.
