Rachel Reeves blow as grim figures suggest taxes ravaging huge sector | Politics | News
The numbers have heartbreaking consequences for Rachel Reeves (Image: Getty)
Tax changes were one factor behind the decline in the UK’s leading market in the second half of last year, an expert said. Analysis of premium London property transaction data by postcode from the Land Registry Jefferies London He claimed that monthly transaction levels fell by 31% compared to the first half of the year.
Data shows an average of 1,431 property transactions were completed per month in premium London postcodes in the first half of 2025. However, this fell to an average of 987 transactions per month in the second half; only three prime London postcodes (with houses in the top 5% to 10% of the market for value) have seen a rise in activity.
Damien Jefferies, founder of Jefferies London, commented: “Our latest research reveals just how far London’s leading market has fallen in the second half of 2025, with transaction volumes falling quite significantly in all but a handful of postcodes.
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Fiscal changes and changing non-dom rules contributed to the decline, an expert says (Image: Getty)
“This slowdown reflects wider conditions in the main central London market, where a combination of tax changes, revisions to off-dom rules and prolonged high interest rates are putting heavy pressure on buyer demand.”
Chancellor Rachel Reeves announced in the November 2025 Budget that basic and higher tax rates on property, dividends and savings income will increase by two percentage points.
Additionally, a new “High Value Council Tax Surcharge” will be introduced for homes valued over £2 million in England.
The Landlords Alliance suggests this would cost homeowners between £2,500 and £7,500 a year, depending on the property value.
Additionally, on 31 October 2024, the stamp duty land tax (SDLT) surcharge applied to second homes was increased from 3% to 5%.
Non-Doms avoid paying tax in the UK on money they earn abroad because their permanent home for tax purposes is outside the country.
Labor promised to abolish the status in its 2024 General Election manifesto, but this policy has been changed.
Ms Reeves announced changes to the Temporary Repatriation Facility, which allows non-former residents to bring assets into the UK at a reduced tax rate.
Mr Jeffries added: “As a result, fewer deals are being reached and transactions are taking longer to complete, which is clearly reflected in the decline in activity seen in the second half.
“Renewed uncertainty about the current situation in the Middle East has added an additional layer of complexity for many international buyers, particularly those affected by the weakening of their currencies against the pound.”
“Of course, such events can also offer increased windows of opportunity, and the premium London market remains one of the most desirable global destinations for high-end buyers.
“All things considered, it will be interesting to see how buyer activity levels change in the first half of 2026.”
