London’s prime property market has seen a shift this year as high-net-worth (HNW) owners have switched from selling to renting out their homes.
Pippa Mitchell, director at Garrington Asset Management, said the move from selling to renting was down to wealthy owners not wanting to lose one-off, trophy homes, choosing to “focus on a generational, rather than short-term, timeline”.
Research from LonRes found the average rent agreed for flats in prime central London rose by 7.9% in the first three months of 2025 compared to the end of last year.
Rental values for these flats were 11.3% higher than the same time in 2024.
Sale prices in London stayed flat as more luxury homes hit the market.
Land Registry figures showed the average home in London sold for 1.1% less in February than in January.
Additionally, LonRes found the number of properties above £5m coming onto the market in February rose by 30% compared to last year.
The number of these homes listed for sale went up 21.1% over 12 months.
The shift in the market picked up after the Labour Government confirmed plans to abolish the non-dom tax regime from April, bringing higher taxes for wealthy UK residents with income from abroad.
According to estimates, 10,800 millionaires left the UK for good in 2024, with only China seeing higher outflows.
Jonathan Hopper, group chief executive officer at Garrington, said: “Rising taxation and political uncertainty have led many wealthy UK residents to reassess their presence here, and a rapid recalibration of London’s prime property market is underway.
“Some of those leaving Britain have chosen to sell their London homes, but we’re starting to see a strategic shift as others retain their UK property assets and turn to the increasingly attractive lettings market instead.
“Prime rental values in London are now a third higher than their pre-pandemic average, and while our high and ultra-high net worth clients may have lost faith in the current government’s fiscal direction, their faith in prime UK property as a reliable, long-term asset remains as strong as ever.”
Garrington Asset Management has expanded its specialist property management service to deal with increased demand.
Mitchell now leads the business, along with Benoit Gallaga, after a strategic acquisition.
Mitchell said: “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.
“On an emotional level, this is about those who’ve acquired a rare, irreplaceable property in the capital keeping a home they love.”
Mitchell added: “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.”
