What could be deterring purchasers?
International demand for property in the UK has dropped to its lowest level since records began in 2008, as tighter tax rules, Brexit, and pandemic-related disruption continue to weigh on overseas buyer appetite.
According to the latest data from residential estate agent Hamptons, just 1% of prospective property buyers in Great Britain were based overseas in the first quarter of 2025, compared with 2% in 2015, before the Brexit referendum.
The fall has been particularly steep in Prime Central London (PCL), which includes boroughs such as Kensington and Chelsea, Westminster, and the City of London. In Q1 2025, only 2.9% of all home-seekers in the area were from abroad, down from 4.0% the previous year and 5.7% a decade earlier.
A combination of subdued price growth — just 3% over the past 10 years in PCL, according to Land Registry figures — alongside increased Stamp Duty and changes to tax rules, has diminished interest from overseas.
“Political events worldwide continue to influence demand for UK property from international buyers,” said Aneisha Beveridge (pictured), head of research at Hamptons. “But more recently, it’s tax changes that have stemmed the flow of overseas house hunters.
“Stamp duty increases, particularly for those purchasing second homes, combined with Brexit and amendments to the tax treatment of non-doms, have added to costs and reduced the lure of property in the UK.”
European nationals, once the largest group of international buyers, now make up a shrinking share. In 2008, they accounted for 48% of foreign interest in UK housing. That figure has since declined to 43%, with France and Italy showing the sharpest drop, as fewer citizens relocate for work.
Though European demand reached a low of 37% in 2020 — coinciding with the UK’s official exit from the EU — there has been some recovery since. Still, in PCL, European buyers represented just 44% of international applicants in Q1 2025, down from 55% in 2008.
In contrast, American buyers have taken a greater share of the market. North American applicants — mainly from the US — now make up 16% of international property seekers in the UK, more than double their 6% share in 2008. Of those, 74% are planning to settle permanently, while 26% are targeting second homes or investment properties.
Applicants from North America now form the largest international buyer group, overtaking the French and more recently, buyers from Hong Kong. Interest from the Middle East is also growing. In Q1 2025, Middle Eastern buyers accounted for 14% of international applicants, a rise from 8% in 2008. The majority (81%) are now planning to relocate permanently, up from 70% a decade ago.
Demand from Hong Kong has waned following a peak in 2020, just prior to the introduction of the British National Overseas (BNO) visa. In Q1 2025, they made up just 2% of foreign buyer registrations, the lowest on record. At the time of the BNO scheme’s launch, 39% of Hong Kong applicants were looking outside the capital.
“While Europeans used to be the driving force, with many relocating here for job purposes, Brexit has put a pause to that,” Beveridge said. “They have been increasingly replaced by Americans, spurred by the strength of the dollar and potentially influenced by political events at home.
“A home in the UK that would have cost someone buying in dollars £1 million a decade ago, effectively costs them around £825,000 today due to currency changes alone. In most cases, this would offset the rise in Stamp Duty.”
London remains the primary destination for foreign buyers, with 54% aiming to purchase in the city during the first quarter of 2025. Central London has seen a resurgence in interest, drawing 45% of international registrations — up from 33% a decade ago.
However, more overseas buyers are now looking beyond the capital for better value. The share of international applicants targeting the North of England rose to 10% in Q1 2025, double the proportion from 10 years earlier. Among these, 75% intend to live in their new home full-time.
Liverpool has emerged as a northern hotspot, attracting nearly half (49%) of all international interest in the region this year. While 34% are eyeing investment opportunities, the majority are aiming to settle permanently, with Europeans accounting for about two-thirds of the demand in the city.
By contrast, the share of international buyers targeting the South East, South West, and East of England has fallen from 40% in 2015 to 29% in Q1 2025.
Fewer overseas buyers are now purchasing second homes or rental properties. That share has dropped from 30% in 2019 to 19% in Q1 2025. This trend aligns with a series of tax changes, including a 2% surcharge for non-UK buyers introduced in 2021 and an increase in second home duties implemented in October 2024. As a result, a foreign buyer acquiring a £1 million second home now pays approximately £113,750 in stamp duty, an effective rate above 11%.
“The case for buying a home, particularly in Prime Central London, has become increasingly tenuous for some international buyers,” Beveridge said. “For those immigrating for an undetermined period, the cost of buying property and the prospect of little or no capital growth, as seen over the last decade in PCL, have led many to opt for renting instead.
“That said, access to all the amenities and culture that London offers, combined with the country’s robust legal system, continues to attract money from overseas from those looking to buy.”
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