London’s IPO market has been stuck in a prolonged slowdown since 2021, held back by economic and geopolitical uncertainty, persistent outflows from UK equities and a valuation gap with overseas and private markets, according to Ken Wotton, managing director of public equity at Gresham House. This has left many companies reluctant to test the public markets.
Despite the FTSE 100’s recent rally, returns from new UK listings have been disappointing. Data from AJ Bell shows that investors who bought into all 20 companies that floated in the past year would have lost money on average. UK IPOs delivered an average return of –3.3% in 2025, compared with a strong 35.7% in 2024.
However, the outlook is starting to brighten. Dan Coatsworth, head of markets at AJ Bell, says several factors are now moving in the right direction, including clearer tax policy from Chancellor Rachel Reeves, easing inflation, falling interest rates and the UK market’s strong performance in 2025.
Regulatory reform is also helping to shift sentiment. Natalie Bell, a fund manager at Liontrust, notes that the UK’s main market listing rules have been overhauled, removing key obstacles such as restrictions on dual-class share structures and making it easier for companies to raise additional capital after listing. Similar reforms are also being introduced for the AIM market, improving London’s appeal to fast-growing businesses.