London's property market has seen a 19% increase in inquiries this January, suggesting renewed confidence after difficult years. However, the Middle East conflict has created divergent buyer behaviors. UK clients now hesitate due to war-related economic concerns, while Middle Eastern buyers, previously nonchalant about London property, now seek opportunities as Dubai transactions dropped 24% in Q1 2026.

The Dubai market, which saw prime villa prices surge 94% between 2020-2024, has been destabilized by conflict. In contrast, London presents a buyer's advantage with prices 22% below the 2015 peak and inventory levels 14% higher than last year. Savills forecasts modest price movements this year, creating favorable conditions for motivated buyers amid the uncertainty.

UK Chancellor Rachel Reeves' recent proclamation of Britain as a "safe harbour" comes late for many expats who have already considered alternatives. To attract wealthy investors back to London, policymakers should reinstate the £2mn investor visa, reconsider inheritance tax policies, and extend the Foreign Income and Gains regime from four to ten years.