As global financial markets react to heightened volatility and newly imposed US tariffs, questions are arising around the impact on real estate, particularly in London’s prime property market. 

In 2008–2009, we saw a clear flight to safety. At the height of the global banking meltdown, with names like Lehman Brothers, Bear Stearns, and AIG dominating headlines. Many of our clients turned to London property as a tangible, stable alternative to volatile stocks and bonds. Activity surged, driven both by opportunists and those seeking the security of bricks and mortar.

However, there are critical differences between the 2008 financial environment and today’s market:

Stamp Duty Dynamics: During the 2008 crisis, the highest stamp duty rate was just 4%, and the government raised the 0% threshold to stimulate transactions. Today, overseas buyers of additional properties may face rates as high as 19%.

Interest Rate Environment: Following the collapse of Lehman Brothers, the Bank of England rapidly reduced base rates from 4.5% to 2% within months. Today, despite speculation of future cuts, the base rate sits at 4.5%, and dramatic reductions appear unlikely.

Change in Tax Incentives: The removal of historic tax advantages for buy-to-let investors has largely reduced the appeal of property as a yield-focused investment.

As a result we don’t anticipate a sudden rush of overseas buyers flooding the market, despite the current financial volatility. That said, we are seeing notable momentum from UK domestic buyers those upsizing, downsizing, or purchasing second homes.

London’s prime property prices have retreated to levels not seen since the last financial crisis, catalysed by changes in non-dom taxation and increased stamp duty. For buyers who’ve been waiting patiently on the sidelines, Dell believes the tide has turned in their favour.

One more stark contrast to the 2008 era: foreign buyers can no longer purchase through offshore corporate structures to avoid inheritance or capital gains tax. The playing field has changed substantially, limiting some of the fiscal benefits that once drew international capital to London.

People are understandably nervous right now. In times of financial fear, many pause, especially those who have suffered losses in the markets. But for the brave, there are real opportunities. One of our overseas clients, currently transacting, put it perfectly: ‘Buying a place in this turmoil seems crazy, but that’s why I think offering something like this makes sense. No one is transacting on anything anywhere.’

As the global financial picture continues to evolve, Dell’s message is clear: London may be down—but for the right buyers, it’s far from out.

• Camilla Dell is managing partner of the property consultancy Black Brick *