Harrods Estates is closing after 130 years as non-dom tax and stamp duty changes affect London’s luxury property market.

An iconic Knightsbridge department store has closed its last remaining office after a perfect storm of stamp duty hikes, the scrapping of the non-dom tax rate and a shift in tastes among wealthier shoppers left it heavily exposed.

For the better part of 130 years, Harrods Estates has occupied a rare corner of the London property market. Founded in 1897 on the ground floor of a famous Knightsbridge department store, it spent decades connecting the British aristocracy with wealthy international consumers and some of the capital’s most desirable addresses. Princess Diana’s stepmother, Countess Raine Spencer, served as director for ten years, lending the production the touch of a real celebrity archive.

However, now the final chapter has been written. The agency has confirmed what it called the “very difficult” decision to close its last remaining office in Brompton Road, ending operations from the Home Counties to Monte Carlo.

Mr Shaun Drummond, director of residential properties at Harrods Estates, said the closure was part of a wider strategy to focus on luxury retail. The service will continue for existing tenants, home owners and those who have started selling, but even these arrangements will end in phases, ending completely in March next year.

The demise of this storied name was caused by a confluence of forces that attacked the high end of the London market. Chief among them is the government’s decision to end the non-dom tax regime, a move that has proven to discourage overseas buyers from considering a move to the capital. Compared to stamp duty costs of up to 19 per cent for foreign buyers, the effect has been stark: Savills calculates that average prices for houses priced at £4.5 million and above fell by 4.8 per cent last year.

The geographical dynamics of prime central London have changed, too. Knightsbridge, once the undisputed pinnacle of luxury living in the capital, has been overtaken in popularity by wealthy buyers by Mayfair, Belgravia and Notting Hill. According to Rosy Khalastchy, director at Beauchamp Estates, the new generation of Middle Eastern shoppers no longer share the desire of their parents and grandparents to sit within walking distance of a Harrods store.

Then there is the reputation of the late Mohamed Al Fayed, who owned Harrods until he sold it to the Qatar Investment Authority for £1.5 billion in 2010. Allegations of historic sexual abuse against Al Fayed, who died in 2023, caused reputational damage that some industry figures believe drove clients to rival agencies.

Others point to strategic confusion under Qatari ownership. The local arm is said to be heavily dependent on a small pool of international buyers and sellers whose preferences can change quickly. One telling anecdote came in the summer of 2024, when a visiting lawyer found a large section of the Knightsbridge store given over to a luxury housing exhibition in Saudi Arabia – an interesting choice given the well-documented rivalry between Qatar and Saudi Arabia.

For those who remember the agency’s success under managing director Mark Collins, who built an enviable client list of high-net-worth individuals and opened four London offices, the closure will feel like the end of an era. As Khalastchy remembers, there was a time when every important retailer in central London wanted to be listed with Harrods Estates, and Countess Spencer’s presence at the property launch added real star power.

The brand’s website now carries a solid banner in all caps confirming that it is no longer accepting new inquiries. A spokesperson for Harrods said that the wind down follows the end of the office lease and that there are plans in place to ensure that there is no disruption to the remaining customers.

In the wider realm of London’s luxury properties, the closure of Harrods Estates serves as a warning. A brand name alone, however glorious, offers little protection when the tax landscape becomes hostile, the consumer demographic changes and the competition is hungry. The era of wealthy foreigners making their way to Knightsbridge just because the name Harrods was over the door seems to be over for good.