Wealthy Brits Exodus as UAE Residents Take Over High-End London Properties
In a significant shift for London's luxury property market, around 70% of sellers of high-value properties are non-domiciled individuals who have left the country following the tax perks' abolition by Chancellor Rachel Reeves in April. This exodus, coupled with fears of a potential new wealth tax on assets above £10 million, has led to a dramatic downturn in the £5m+ market, which has hit its second-lowest level since 2020.
The volume of ultra-prime homes (worth over £15m) has decreased by 13% since last year, according to reports from luxury estate agents. However, the Gulf's ultra-rich are taking advantage of this situation, purchasing "fabulous prime and super-prime homes" in London, as stated by buying agency Eccord. Emirati buyers, in particular, have been active in the market, acquiring luxury penthouses and mansions, especially in prestigious areas like Knightsbridge. Their motivations often include diversifying assets internationally, securing safe investments amid global uncertainties, and gaining access to London's elite social and business networks.
The Labour government's tax changes for non-domiciled residents have led to a mass exodus of the wealthy, with approximately £694 million worth of "super prime" homes being sold in London in the past six months. Simultaneously, luxury estate agents have reported a trend of non-domiciled individuals relocating to Dubai and Abu Dhabi, while Emiratis are buying their deserted mansions in London.
Amidst these changes, there are concerns within the Labour party about the potential for harsher levies on the rich. However, Business Secretary Jonathan Reynolds has dismissed this idea as "daft". Some newcomers to Britain are now subject to full-fat tax rates after just four years, a significant departure from the long-standing domicile system that attracted international wealth.
Despite the challenges, London's luxury property market continues to evolve, with the Gulf's ultra-rich playing an increasingly prominent role. As the market adapts to these changes, it will be interesting to see how it shapes up in the coming months.
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