Many wealthy property owners who are fleeing Britain due to this month’s abolition of the non-dom tax regime are opting to rent out rather than sell their homes, according to Garrington Asset Management.

It suggested that a rebalancing from sales to rentals is occurring at the top end of the capital’s property market - and that this is a result of owners reluctance to part with “unique, trophy assets” and a desire to focus on a “generational, rather than a short-term, timeline”.

It highlighted data from LonRes that shows the average rent agreed on flats in prime central London rose 7.9% in the first three months of this year compared to the last three months of 2024.

Average rental values

At the same time, average rental values of prime central London flats are now 11.3 higher than they were a year ago.

It compares to data from Land Registry showing the average London home sold for 1.1% less in February than in January.

LonRes said that the number of homes prices at more than £5million was up 30% in February compared to the same month last year.

It follows the Government’s announcement that it is scrapping the non-dom tax regime this month, forcing wealthy UK residents with income from overseas to pay tax on their worldwide assets.

Strategic shift

Jonathan Hopper, of Garrington, said: “Rising taxation and political uncertainty have led many wealthy UK residents to reassess their presence here, and a rapid recalibration of London’s prime property market is underway.

“Some of those leaving Britain have chosen to sell their London homes, but we’re starting to see a strategic shift as others retain their UK property assets and turn to the increasingly attractive lettings market instead.

“Prime rental values in London are now a third higher than their pre-pandemic average, and while our high and ultra-high net worth clients may have lost faith in the current government’s fiscal direction, their faith in prime UK property as a reliable, long-term asset remains as strong as ever.”

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