Demand for UK property from international buyers hits record low

The proportion of international applicants – or people registering to buy a home – in Great Britain fell to 1% in Q1 2025, the lowest level on record, according to Hamptons.

In Prime Central London (PCL), 2.9% of prospective buyers were based overseas, down from a peak of 7.9% in 2009.

The decline in demand has been predominantly driven by fewer Europeans relocating to Great Britain.  Europeans made up 43% of overseas house hunters in Q1 2025, down from 48% in 2008.

Prospective buyers from North America have increasingly replaced Europeans.  They accounted for 16% of international house hunters looking in Great Britain in Q1 2025, more than double the 6% recorded in 2008. Nearly three-quarters of this group are looking to make a permanent move.

International buyers are increasingly looking to buy in the North of England.  One in ten (10%) overseas applicants were looking to buy in the North in Q1 2025, up from 5% in 2015.

Chart 1 – Proportion of applicants looking to buy from overseas

Source: Hamptons

Who’s buying?

The combined effects of Brexit and the pandemic, alongside higher stamp duty costs, have dampened international buyer interest in Britain’s property market.  Overseas-based applicants registering with an estate agent made up 2.0% of all house hunters across Great Britain in 2015, before the Brexit referendum.   By Q1 2025, this figure had halved to 1.0%, the lowest proportion since our records began in 2008.  These applicants must have an address registered abroad or an international phone number when registering with an agent to be defined as being based overseas (see note to editors).

Prime Central London (PCL), which includes Kensington and Chelsea, Westminster, and the City of London, has traditionally been the heartland of international buyers.  Here, overseas applicants fell to the lowest share on record, making up 2.9% of all house hunters in Q1 2025, down from 4% in 2024 and 5.7% a decade ago.

Sluggish price growth in PCL, where average prices have grown by 3% over the last 10 years according to Land Registry, combined with stamp duty increases and broader tax changes, have weighed on demand.

Chart 2 – Proportion of all international applicants in Great Britain

Source: Hamptons

Long-term, the decline in demand has been predominantly driven by fewer Europeans relocating to Great Britain.  Back in 2008, Europeans accounted for 48% of overseas house hunters; in this most recent quarter, the figure has fallen to 43%.

In particular, appetite has weakened from buyers based in France and Italy, many of whom would have relocated to the UK for work purposes.  However, there has been a slight recovery in recent years after European applicants reached a record low of 37% in 2020, when the UK officially severed ties with Europe.

Table 1 – Where overseas house hunters come from: % of all international applicants

Source: Hamptons

The drop in demand for property, specifically in PCL, from Europeans has been starker.  Here, Europeans made up 44% of all prospective buyers coming from overseas in Q1 2025, down from 55% in 2008.

However, Americans have increasingly replaced buyers from Europe.  Applicants from North America, primarily from the United States, accounted for a record 16% of all international buyers looking to purchase a property in Great Britain during the first quarter of this year (table 1).  This figure has more than doubled since 2008, when they made up 6% of all overseas applicants.

Nearly three-quarters (74%) of applicants from North America are looking to make a permanent move to Great Britain, with the remaining 26% seeking to buy a second home or investment property.

At country level, Americans and Canadians are now the largest single international buyer group from overseas – a title previously held by the French for most years leading up to Britain’s departure from the EU, and more recently, Hong Kongers.

Demand from Middle Eastern buyers has also risen.  This year, they made up 14% of all international applicants looking to buy in Great Britain, marking a new high and up from 8% in 2008. More of these buyers are choosing to relocate to Great Britain too.  In Q1 2025, 81% of applicants from the Middle East were looking for a permanent new home, the highest on record and up 11% compared to a decade ago when many were purchasing second homes in the UK.

Meanwhile, the number of applicants looking to buy from Hong Kong has declined since peaking at 17% in 2020, just before the launch of the British National Overseas (BNO) visa. They were the most common international applicants in 2019 and 2020.  In Q1 2025, they made up 2% of all overseas house hunters, the lowest proportion on record.

Interestingly, back in 2020, 39% of those looking to move to Great Britain from Hong Kong were looking for a home outside of London.

Table 2 – Top three international applicants by country in each year

Source: Hamptons

Where are they buying?

London remains the primary focus for overseas house hunters, with 54% of all international applicants looking to purchase in the capital during the first three months of this year.

However, there’s been a renewed interest in central London.  In the first quarter of this year, 45% of overseas applicants registered to buy a home in Inner London, up from 33% a decade ago, when the market neared its peak.

However, those searching for more affordable homes are looking beyond the capital.  One in ten (10%) international applicants were seeking a property in the North of England (North East, North West, and Yorkshire & The Humber) this year, up from 5% a decade ag0. Three-quarters (75%) of these house hunters are looking to buy a permanent home, with the remaining 25% searching for a second home or investment property.

Table 3 – Where international buyers are looking: % of all international applicants

Source: Hamptons

Liverpool has emerged as the star of the north, attracting 49% of all international applicants looking to buy in the North of England during the first quarter of 2025. While 34% are searching for an investment property here, more buyers are looking to make a permanent move.  Europeans accounted for roughly two-thirds of the international interest in Liverpool homes.

Much of the interest in the North has come at the expense of that in the southern regions (South East, South West, & East).  These regions surrounding the capital have gone from accounting for 40% of all overseas property searches in 2015 to just 29% in Q1 2025.

What are they buying?

Overseas applicants are increasingly seeking a permanent residence in Great Britain rather than a holiday home or investment property.  The proportion of international applicants seeking a second home or a buy-to-let property has decreased by over a third in the last five years, from 30% in 2019 to 19% in Q1 2025.

This fall in demand predominantly comes from the rise in stamp duty, as well as changes to the non-dom tax classification.

Back in 2021, it was announced that overseas nationals would pay a 2% stamp duty surcharge on top of existing rates.  An increase in the surcharge attached to all second home purchases in October 2024 means that international buyers purchasing a second home in England now pay a 7% surcharge on a property purchase.  This change, and the ending of the stamp duty holiday in April, brings the bill for an international citizen to £113,750 for a million pound second home; an effective tax rate of over 11%.

Chart 3 – Proportion of all international applicants in Great Britain

Source: Hamptons

Aneisha Beveridge, head of research at Hamptons, said: “Political events worldwide continue to influence demand for UK property from international buyers.  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.

“The case for buying a home, particularly in Prime Central London, has become increasingly tenuous for some international buyers.  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.

“While Europeans used to be the driving force, with many relocating here for job purposes, Brexit has put a pause to that.  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 £1m 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.”

Read the orginal article: https://propertyindustryeye.com/demand-for-uk-property-from-international-buyers-hits-record-low/