It looks like the posh property market in London is taking a breather, but experts say it’s just a temporary dip.

According to Knight Frank, fewer wealthy buyers are splashing out on million-pound homes in London. The number of offers for homes over £5 million is way down compared to the last few years, especially when you consider 2020, the year of the pandemic.

It’s not just the big spenders who are holding back. While more people are registering to buy homes under £5 million, the number of people interested in those luxury pads is down.

And it’s not just the buyers who are being cautious. More sellers are listing their homes, probably because they’re realising prices won’t be soaring anytime soon and interest rates aren’t going to come down quickly either.

Prices Dipping, But Experts Say Don’t Worry

All of this is putting pressure on prices, which have fallen slightly over the last year. But Knight Frank says that while prices have dipped in prime central London, the market is still strong, with more affordable areas like Wandsworth and Dulwich seeing price increases.

Labour’s Tax Plans Could Affect The Market

There’s a bit of political drama going on that could affect the luxury property market. The Labour Party has said it would change the rules for “non-doms,” wealthy people who don’t pay UK tax on their overseas earnings. This has made some big spenders nervous, but experts think Labour might soften their stance if they get into power.

The Bottom Line

Overall, it looks like the London property market is taking a pause, but experts say it’s a temporary thing. The long-term outlook for luxury properties is still positive, with pent-up demand and a healthy economy expected to drive prices up again in the years to come.