Dawes London November 2025
The autumn market has seen us transact on a 6-bedroom family apartment in Cornwall Mansions, Kensington. This sale was conducted entirely off-market to a Turkish family moving to London.
Since our last update, we’ve had elections on either side of the pond and the long-awaited 'budget of doom’. I’m sure everyone has had quite enough budget update emails, but I have briefly summarised the changes for residential property in eight bullet points below.
Interest rates were reduced yesterday by 0.25% to 4.75%, but intel from our top mortgage brokers suggests that mortgage rates will rise in the short term following the budget. Currently, you can get a 2-year fixed rate of 3.96% or a 5-year fixed rate of 3.84%.
Having discussed the abolishment of resident non-dom (RND) status with numerous clients, the major 'tooth suck' is IHT exposure. The RND community not tied by their children's education appears to be leaving London at a disconcerting rate. Monaco, Milan, and Dubai are the most talked-about destinations as alternatives. This will have an evolving effect on the central London market, but we predict it will, in the short term, put more pressure on the rental market, which is already very short of properties to let.
Even with broader challenges, we have several dedicated clients, both British and international, who trust in the UK, our world-class education, and see London as a wonderful place to live.
The Best Place to Live in London?
We are honoured to manage the sale of No. 17 St Leonards Terrace, working with our friends at Russell Simpson, who wrote this piece with our clients, who have owned this very special home for over 50 years.
Smith Terrace is one of the prettiest streets in Chelsea and is very close to our hearts. We were delighted to source and advise on the acquisition of the only house on the street with a double garden for esteemed developers Jubilee Partners. We can't wait to see this one redeveloped.
Here's a summary of the recent tax changes affecting residential property in the UK:
Capital Gains Tax (CGT): CGT rates on residential property sales remain unchanged at 18% for basic rate taxpayers and 24% for higher rate taxpayers. However, the CGT rates on non-residential assets (shares and commercial properties) have increased to 18% and 24%.
Stamp Duty Nil-Band Reduction: Starting April 1, 2025, the nil-band threshold for Stamp Duty will revert to £125,000 from £250,000, increasing tax bills for many buyers.
First-Time Buyer Stamp Duty Changes: The threshold for first-time buyers will decrease from £425,000 to £300,000, and the maximum property value for relief will drop from £625,000 to £500,000, impacting primarily first-time buyers in London.
Increased Stamp Duty for Additional Properties: Effective October 31, 2024, the stamp duty surcharge for second homes and rental properties will rise from 3% to 5%, applying to the entire purchase price.
Increased Stamp Duty for Companies: The flat rate of Stamp Duty for companies purchasing residential properties over £500,000 will increase from 15% to 17%.
Inheritance Tax (IHT) Threshold Frozen: The IHT threshold will remain at £325,000 until 2030.
Abolition of Non-Dom Tax Status: The non-dom tax status will be eliminated from April 2025, which will have ramifications for the Prime London property market.
Annual Tax on Enveloped Dwellings (ATED): The ATED charge will increase by 1.7% for the 2025/26 chargeable period.