The investment potential of the London property market has stalled, raising concerns for individuals who have relied on rising house prices as a cornerstone of their financial planning, Rathbones, a leading UK wealth and asset management group, has warned.
Recent analysis by Hamptons found that in 2025, 14.8% of London homeowners sold their properties for less than they originally paid, overtaking the North East, which had topped the ranking in 2024. Simon Bashorun, Head of Advice in Rathbone’s Private Office, says this should ring alarm bells for those who rely on property for income or future planning.
“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,” he said. “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.
“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 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.
“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. For HNWIs, the smarter approach is to ensure property is just one part of a balanced plan. Global, liquid portfolios and structured tax‑efficient vehicles offer more flexibility, smoother succession outcomes, and better protection against shifting regulation.”
London replaces North East as region where sellers are most likely to sell at a loss
