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    Home»Property»The collapse of boomers’ million-pound property dream
    Property

    The collapse of boomers’ million-pound property dream

    August 9, 20262 Mins Read


    Others are wary that the market could fall even further and want to sell so that they can put the money to better use elsewhere, says Watson.

    Lucian Cook, at Savills, says: “For the very wealthy who are responsible for a sizeable chunk of IHT receipts, other assets have become more important [than residential property].

    “The increased exposure to taxes, most notably stamp duty, as well as the political uncertainty seen over the past decade have put downward pressure on central London prices.”

    This toll has also hit other parts of the prime housing market, he adds. Though many areas saw house prices surge after lockdown, this proved short-lived at the higher end of the market.

    Britain’s luxury property market has been disproportionately hammered by a succession of punitive tax changes.

    George Osborne, the former chancellor, introduced new stamp duty bands for more expensive properties in 2014 – including a 10pc charge on the value between £675,000 to £1.5m and then a 12pc rate above £1.5m.

    Then in 2016, came a three percentage point surcharge for anyone purchasing a property in addition to their main residence.

    In 2024, Rachel Reeves raised this to five percentage points. That was after the Tories also introduced a two percentage point surcharge for overseas buyers in 2021.

    This means that the marginal top rate of stamp duty payable on a luxury home is now 19pc.

    An overseas buyer purchasing a £5m second home in London will have to pay £863,750 in tax. Even for a UK buyer purchasing their main home at this price, the bill is more than half a million pounds.

    Heightened political uncertainty and changes to the non-dom tax regime for wealthy internationals have also deterred global buyers.

    And there is a wider story of UK property market strain. Affordability has hit a wall and high interest rates have been hammering buyer demand since 2022.

    After adjustments for inflation, house prices are roughly the same as they were at the end of 2003.

    But it is the top end of the London market where dreams of rising asset prices have completely died.

    “If, after you have done improvement works and paid stamp duty, you can break even, you have done well,” says Watson.



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