Non-dom tax reform plan hits prime prices

Prime Central London property prices are expected to fall one per cent this year, instead of the one per cent rise predicted in January. Knight Frank has revised its forecast due to a deterioration in demand for the capital's most expensive homes.

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This is due, at least in part, to the proposal to change the tax system for non-UK domiciled individuals -aka non-doms - in the spring Budget. Non-doms are not fleeing London in droves, said Stuart Bailey, head of super-prime sales, London at Knight Frank, but are choosing either to wait out the uncertainty or find a bargain.

"Uncertainty is having some effect, but sales are hardly falling off a cliff as a consequence. Mostly, it's a wait-and-see," said Bailey.