The UK’s 2025 non-domicile (non-dom) tax reforms are sending shockwaves through London’s super-prime property market, driving a wealth exodus while boosting demand for high-end rentals. In a recent London Property Podcastepisode, host Farnaz Fazaipour and property expert Trevor Abrahmsohn explored the unintended consequences of these tax changes, including buyer migration and shifting market dynamics. While many wealthy individuals are saying “au revoir” to London, Abrahmsohn suggests it’s not a permanent goodbye. This guide unpacks the non-dom tax impact, market trends, and actionable strategies for investors, buyers, and sellers navigating London’s luxury real estate landscape in July 2025.
Non-Dom Tax Reforms: Triggering a Wealth Exodus
The new non-dom tax regime is reshaping London’s super-prime market by prompting wealthy individuals to reconsider their UK residency.
Tax Changes: As of April 2025, non-doms face 40% inheritance tax (IHT) on global assets after 10 years of residency, replacing the remittance-based system, leading to 10,800 millionaires exiting the UK in 2024–2025.
Destinations: Wealthy individuals are relocating to tax havens like Dubai (0% IHT), Monaco, and Singapore, reducing demand for London’s £5M+ properties by 20%.
Market Sentiment: Abrahmsohn notes that many non-doms view their departure as temporary, awaiting potential legislative tweaks or market stabilization by 2026.
Investor Strategy: Monitor non-dom migration trends and target tax-efficient jurisdictions for diversified investments while maintaining exposure to London’s long-term potential.
Super-Prime Rental Surge: A Market Bright Spot
The non-dom exodus is fueling unprecedented demand for super-prime rentals, offering opportunities for landlords.
Rental Demand: London’s super-prime rental market (£3,000–£10,000/month) has surged 15% year-on-year, driven by non-doms and international buyers opting to rent rather than buy amid tax uncertainty.
Prime Areas: Rentals in Mayfair, Knightsbridge, and Chelsea command 4–6% yields, with a 45,000-home private rental shortage pushing prices up 5% to £4,500/month on average.
Tenant Profile: High-net-worth renters, including bankers and tech executives, prioritize luxury amenities like concierge services, boosting occupancy rates to 95%.
Landlord Action: Invest in super-prime rental properties with premium amenities, and price competitively to capitalize on high demand and rental shortages.
Market Impact: Softening Prices and Buyer Migration
The non-dom tax changes are softening London’s super-prime market, creating a buyer’s market with unique challenges.
Price Corrections: Properties in the £2M–£10M range have seen 10–15% price drops, with average prices at £1,800–£2,200 per square foot in prime central London.
Buyer Migration: International buyers, historically 25% of super-prime purchases, are shifting to markets like Paris and Dubai, reducing transactions by 20% in 2025, as Abrahmsohn highlighted.
Buying Opportunities: A softening market offers 5–10% discounts on 66% of listings lingering over three months, attracting savvy investors and local professionals.
Buyer Tip: Negotiate aggressively on super-prime properties in areas like Belgravia, and lock in sub-4% fixed-rate mortgages (e.g., Nationwide’s 3.9% two-year fix) for affordability.
Market Dynamics: A Transitional Phase
London’s super-prime market is in transition, with opportunities for those who adapt to new realities.
Seller Challenges: Sellers face pressure to adjust pricing expectations, with 30% of £5M+ properties requiring cuts to attract buyers, as Abrahmsohn noted.
Local Buyers: UK-based professionals (e.g., lawyers, bankers) are filling the gap, accounting for 20% of super-prime purchases in 2025, up from 10% in 2023.
Future Outlook: Potential IHT threshold adjustments or investor visa reforms by Q4 2025 could restore confidence, signaling that the non-dom exodus may be a temporary “au revoir.”
Seller Strategy: Price properties realistically (£1,477–£2,200/sq.ft), and use professional staging to highlight unique features like proximity to Hyde Park to expedite sales.
Strategies for Navigating London’s Super-Prime Market
To thrive in London’s 2025 super-prime market, investors, buyers, and sellers should adopt these actionable strategies:
For Investors: Capitalize on discounted super-prime properties and diversify into high-yield rentals (4–6%) to offset reduced sales activity due to non-dom migration.
For Buyers: Target lingering listings for 10–15% discounts, focusing on areas like Chelsea with strong rental demand and long-term growth potential.
For Sellers: Align pricing with current market trends, and invest in premium marketing, including virtual tours, to attract local and international buyers.
For All: Partner with Property Wealth and experts like Trevor Abrahmsohn and Farnaz Fazaipour for tailored insights and access to exclusive opportunities in London’s super-prime market.
Expert Advice: Connect with Property Wealth to transform tax-driven challenges into profitable opportunities in 2025.
Thrive in London’s Super-Prime Market with Property Wealth
The 2025 non-dom tax changes are reshaping London’s super-prime property market, driving a wealth exodus but creating opportunities in rentals and discounted purchases. The London Property Podcast, hosted by Farnaz Fazaipour and featuring Trevor Abrahmsohn, delivers critical insights to navigate these shifts. At Property Wealth, our network turns challenges into actionable strategies, connecting you with London’s premier real estate prospects.
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