Labour’s tax assault on wealth is helping to drive rich buyers away from Britain and could bring the era of large-scale ultra-luxury residential developments in London to an end, property experts have warned.
A new report from property consultancy Knight Frank suggests that St John’s Wood Square, a 120-home development due for completion in 2028, could be the last major “super-prime” residential scheme of its kind to be built in the capital.
The warning, reported by The Telegraph, comes amid growing concern within the property industry that a combination of tighter planning restrictions, weaker demand at the top of the market and an increasingly hostile tax environment is making London less attractive to the world’s wealthiest buyers.
Branded residences, which combine privately owned luxury apartments with services more commonly associated with five-star hotels, have become an increasingly important part of the international prime property market.
London has previously been home to some of the most prestigious examples, including the Mandarin Oriental residences at One Hyde Park and the OWO Residences by Raffles in Mayfair.
But while the international market is expanding rapidly, London risks being left behind.
Knight Frank figures cited by The Telegraph show that the number of branded residential developments worldwide has almost tripled in a decade, rising from 354 schemes in 2015 to 903 by the end of 2025, with the total expected to pass 1,000 during 2026.
London, however, is facing competition from destinations including Dubai, the United States and Thailand, while European countries such as Italy and Greece have actively sought to attract internationally mobile wealthy residents.
Britain appears to be travelling in the opposite direction.
Since coming to power, Labour has abolished the non-dom tax regime and wealthy residents have also faced changes affecting inheritance, investments and capital gains. With further tax rises repeatedly discussed ahead of the Budget, uncertainty has become another factor for people capable of moving themselves, their businesses and their capital elsewhere.
Hedge fund billionaire Chris Rokos is among the latest high-profile figures reported to be considering relocating his tax residency, with Greece his expected destination.
For Labour, the departure of wealthy individuals may provide a politically convenient headline. For Britain, however, the danger is that the Treasury loses not only those individuals but their investment, spending, businesses, employees and future tax contributions.
Rupert des Forges, of Knight Frank, told The Telegraph that a “realignment of capital” was taking place at the upper end of the market, with buyers reducing the amount they intended to spend in Britain because of both purchasing costs and attitudes towards wealth.
The difficulties are not solely the result of national tax policy.
Westminster City Council introduced planning rules in 2021 restricting the size of new homes to 200 square metres in areas including some of London’s most expensive neighbourhoods.
St John’s Wood Square obtained planning permission back in 2015 and will contain apartments averaging around 300 square metres.
Gareth Stow, chief executive of the development, told Knight Frank that it was “probably the last super-prime scheme in London of any scale”.
The result is an extraordinary contradiction. London remains one of the world’s great cities, with its history, culture, financial sector, restaurants, schools and international connections giving it advantages that rival cities would dearly love to possess. Yet Britain is increasingly making it harder and more expensive for precisely the people capable of investing significant sums here to do so.
Capital, unlike Labour’s tax policy, does not recognise national loyalty. Wealthy individuals can move, investors can choose another country and developers can build elsewhere.
Dubai, Greece, Italy and other international competitors understand that reality and are competing for mobile wealth. Britain risks treating it instead as an inexhaustible resource which can simply be taxed again whenever the Treasury needs more money.
The consequences stretch beyond whether another multimillion-pound apartment is built in Mayfair.
High-end residential development supports architects, engineers, builders, designers, hospitality workers, property professionals and numerous specialist businesses. Wealthy residents also spend money throughout the wider economy and, depending on their circumstances, contribute substantial sums in taxation.
Meanwhile, the international luxury market itself is evolving. Knight Frank’s research found increasing demand for developments offering elaborate health and wellness facilities, including longevity clinics, cryotherapy, hyperbaric oxygen treatment and other so-called biohacking services.
Other global cities are racing to capture that market.
London, once an obvious destination for international capital, now risks watching it head for the departure lounge.
A government spokesman told The Telegraph that property markets were affected by numerous factors and pointed out that stamp duty forecasts are independently produced by the Office for Budget Responsibility.
The Government also said it was focused on delivering the homes Britain needs through measures including its Social and Affordable Homes Programme, which it said would drive a major revival in council housebuilding.
Building affordable homes is important, but it does not answer the warning being sounded at the other end of the market.
A successful economy does not have to choose between homes for ordinary families and attracting wealthy investors. It should be capable of doing both.
Instead, Labour increasingly appears determined to discover how much tax, regulation and hostile rhetoric internationally mobile wealth will tolerate before it simply goes somewhere else.
London spent generations establishing itself as one of the safest and most attractive homes for global capital.
Destroying that advantage could prove considerably easier than rebuilding it.
Worth reading in full: https://www.telegraph.co.uk/business/2026/09/14/labours-wealth-raid-has-killed-off-ultra-luxury-homes-in-lo/
