London Property Market Update 2025: Mansion Tax, UAE Buyers, Greenwich & Leasehold Reform
London’s property market never stands still. In December 2025 four stories are dominating conversations: the new mansion tax, a tidal wave of UAE capital, Greenwich being crowned the capital’s hottest spot, and the biggest leasehold shake-up in decades. In the latest London Property Podcast episode, host Farnaz Fazaipour unpacked every angle. Here is your complete guide to what is happening and exactly how to position yourself.
The New Mansion Tax: Who Pays and How the Market Reacts
The so-called “mansion tax” arrived in April 2025 as an additional 2–3% stamp duty surcharge on homes worth over £2 million and a rumoured annual wealth levy on properties above £5 million. The effects are already visible. Transactions above £2 million have fallen 31% year-on-year in prime central London. Sellers in Knightsbridge, Belgravia and Kensington are now accepting 10–15% below asking price to move before further measures land in the Spring Budget. Many owners over 55 are accelerating downsizing plans to escape the bracket entirely. For cash buyers and investors, this is creating the deepest prime discount window since 2009.
UAE and Middle Eastern Money Floods Back In
While some domestic wealth heads for the exit, Middle Eastern buyers are charging in the opposite direction. UAE investors alone completed £1.8 billion of London acquisitions in the first three quarters of 2025, the highest figure since 2017. Favourite targets include new-build riverside schemes in Nine Elms, Battersea Power Station Phase 4 and Canary Wharf’s latest towers. Golden-visa style residency perks, political stability and the weakness of sterling make London look remarkably cheap against Dubai and Riyadh prices. Expect this capital flow to keep supporting prime new-build values even if the second-hand market softens.
Greenwich Crowned London’s Best Place to Live 2026
Greenwich has just been named London’s number-one neighbourhood for 2026 by the Sunday Times. Riverside charm, outstanding schools, the O2, Royal Park, DLR and Jubilee line links, plus a vibrant village feel have pushed average prices up 9% this year alone. Three- and four-bedroom Victorian and Georgian houses now routinely change hands above £1.5 million and new riverside developments sell off-plan in days. Rental yields still sit at a healthy 4.8–5.6%. For families and investors wanting capital growth plus lifestyle, Greenwich is currently unmatched.
Leasehold Reform: Freeholders Fight Back
The Leasehold and Freehold Reform Act finally became law in summer 2025, extending leases to 990 years at zero ground rent and capping service charges. Major freeholders have launched a string of High Court challenges, delaying implementation in thousands of blocks. Marriage values above 80 years have been abolished, instantly adding 3–8% to flat values in prime postcodes. Leaseholders are celebrating; freeholders are selling portfolios at discount to avoid future losses. Savvy buyers are snapping up leasehold flats with under 90 years remaining because the uplift is now almost guaranteed.
Your December 2025 Action Plan
Cash buyers should target £2 million-plus houses in prime central London at 10–15% below peak values. UAE-style investors should focus on new-build riverside schemes with strong rental covenants. Families and long-term investors must move fast on Greenwich before the 2026 spotlight pushes prices another 10–12%. Leasehold flat hunters should look for sub-90-year leases in Belgravia, Chelsea and South Kensington, the post-reform gains are effectively locked in.
Thrive in 2025 with Property Wealth
Mansion tax pressure, Middle Eastern inflows, Greenwich’s rise and leasehold reform are redrawing London’s property map faster than ever. At Property Wealth we are already securing off-market prime stock at genuine discounts, placing clients into the strongest UAE-backed developments and winning Greenwich houses before they reach the open market.
Ready to turn today’s headlines into tomorrow’s profit? Connect with us today and let our specialist team show you exactly where London’s smart money is moving right now.
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