If you’re working on a probate case with diamond jewellery in 2025, don’t be surprised if the valuations look different to last year’s. The diamond market has shifted sharply, and not in favour of sellers. Executors expecting a windfall from inherited jewellery may need a reality check. Here’s what’s changed, and why valuations this year are more about realism than optimism.
The landscape for diamond valuations has transformed dramatically over the past 18 months. With natural diamond prices falling by up to 40% from their 2021 peaks, and the market flooded with increasingly affordable lab-grown alternatives, the implications for probate valuations are significant. For solicitors and executors managing estates, understanding these shifts isn’t just about managing expectations, it’s about ensuring HMRC compliance and protecting all parties involved.
Sharp Drop in Natural Diamond Prices
The natural diamond market is experiencing unprecedented turbulence. Prices have plummeted by up to 40% from their 2021 highs, with the average retail price of a 1-carat natural diamond falling from £6,819 to roughly £4,997 in just three years. This decline stems from multiple factors: post-pandemic spending corrections, China’s economic slowdown (where demand has halved year-on-year), and fewer marriages in Western markets.
Major industry players are struggling to stabilise the market. De Beers began 2025 holding its largest stockpile of unsold diamonds since 2008, forcing a 20% cut in mining output to prevent further price collapse.
Lab-Grown Diamonds Disrupting the Market
The meteoric rise of lab-grown diamonds (LGDs) has fundamentally altered the jewellery landscape. By 2023, these manufactured alternatives captured nearly 20% of global diamond jewellery sales, and now account for approximately half of all engagement ring diamonds sold in the US. This shift represents a seismic change in consumer behaviour and market dynamics.
Technological advances have driven extraordinary price reductions in the lab-grown sector. A 1-carat lab diamond that cost around £3,400 in 2020 now sells for merely £892—a staggering 74% price drop in just four years. These stones now retail for 10-20% of the price of equivalent natural diamonds, creating confusion about overall diamond values.
This market disruption creates particular challenges for probate valuations. Beneficiaries often mistake inherited diamonds’ value based on size alone, unaware that lab-grown alternatives have dramatically reshaped price expectations. Swift Values regularly encounters clients confused between LGDs and natural stones in inherited jewellery, highlighting the need for expert assessment that distinguishes between these fundamentally different assets for HMRC purposes.
The Probate Context: Why It Matters
The volatile diamond market creates significant risks for probate. Many executors rely on outdated insurance valuations or decade-old purchase receipts that bear little relation to today’s market reality. This disconnect can lead to serious issues when settling estates.
Overvaluing diamonds for probate has immediate financial consequences. Estates may pay substantially more inheritance tax than necessary based on inflated valuations that no longer reflect actual resale value. With diamond prices continuing to fall and industry experts anticipating further declines throughout 2025, accurate current market assessments are essential.
Conversely, undervaluing creates different problems. HMRC may question suspiciously low valuations, or beneficiaries might later dispute the handling of valuable items, potentially exposing executors to personal liability.
Looking Ahead: Protecting Estates in a Changing Market
In today’s volatile diamond market, last year’s numbers are no longer good enough. Swift Values ensures probate valuations reflect not just intrinsic quality, but the real-world market. For solicitors and executors, that’s the difference between ticking a box and staying out of trouble.
As diamond prices continue their downward trajectory, accurate probate valuations have never been more important. Whether handling a single inherited ring or an entire jewellery collection, obtaining current, HMRC-compliant assessments protects estates from unnecessary tax liabilities while providing executors with the documentation needed to fulfill their fiduciary responsibilities properly.
