The investment potential of the London property market has ground to a halt, it’s claimed.
This is raising concerns for those who have used rising house prices as a central assumption of their financial planning.
The message comes from wealth and asset management group Rathbones, which cites research from lettings and sales agency Hamptons.
The agency has detailed the regions in which most homeowners sell for less than they paid and found London leading the way.
Simon Bashorun of Rathbone’s Private Office says this should ring alarm bells.
“London property is no longer the low‑risk cornerstone of wealth planning that many high‑net‑worth families assume it to be and those with property as part of their portfolio need to give its future consideration,.
“The market’s slowdown exposes three vulnerabilities for those leaning too heavily on real estate: concentration risk, illiquidity, and a rising policy and tax burden.”
He says while property can still play a role, using prime London homes or buy‑to‑lets as the backbone of retirement or estate plans is increasingly precarious.
The tax environment has shifted materially: higher stamp duty surcharges, the new Mansion Tax, and growing talk of high‑value council tax supplements all erode returns.
And he warns that unlike diversified investment portfolios, residential property typically lacks tax‑efficient reliefs, most notably Business Relief, which means property flows straight into the inheritance‑tax calculation.
He goes on to state: “With frozen IHT thresholds pulling more estates into the net, families relying on property risk being forced into distressed sales at death simply to meet liabilities – there is increased chance their asking price will be nowhere near what was once hoped.
“Add to this the practical constraints – slow sales processes, volatile valuations, and diminishing rental viability – and the risks compound.”
This article is taken from Landlord Today