In a significant shift in the UK property market, foreign buyers are retreating from the real estate scene, with only 1 percent of prospective buyers in the first quarter of 2025 being based overseas. This marks a decrease from 1.2 percent in 2024, according to data from estate agency Hamptons International, representing the lowest proportion since the agency began tracking this data in 2008.
The decline is largely attributed to a combination of increased stamp duty costs for non-UK residents and the recent abolition of the non-domiciled (non-dom) tax regime. As reported by The Times, foreign buyers of property in England and Northern Ireland are now facing a 2 percent stamp duty surcharge, which has added to the financial burden of investing in UK real estate.
“Tax changes have stemmed the flow of overseas house hunters,” said Aneisha Beveridge, Head of Research at Hamptons. “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 impact of these changes has been particularly pronounced in central London, a city that has historically attracted global buyers. Only 2.9 percent of applicants for homes in prime areas such as Kensington, Chelsea, Westminster, and the City of London were based overseas in 2025, a stark drop from a peak of 7.9 percent in 2009.
Despite the decline in foreign buyers, Beveridge noted that the UK’s cultural appeal and legal stability continue to attract some international investment. However, the financial case for buying property, especially in high-end markets, has weakened significantly. “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, have led many to opt for renting instead,” she added.
Interestingly, the data reveals a geographic shift in foreign buyer interest. While London remains a focal point for global buyers, more overseas applicants are now considering northern regions of England. In the first quarter of 2025, 10 percent of international applicants were looking to purchase in the north, a notable increase from just 5 percent in 2015.
In terms of demographics, European nationals comprised the largest share of international inquiries at 43 percent, followed by North America at 16 percent, the Middle East at 14 percent, and South Asia at 7 percent. Notably, North American interest, particularly from the US, has more than doubled since 2008, driven by a strong US dollar and broader political considerations.
Recent data from Knight Frank’s Wealth Report further highlights the long-term price shifts in London’s property market. In 2025, $1 million (approximately £800,000) now buys 34 square meters of property in London, a 43 percent increase in space compared to a decade ago.
In addition to the property market, the UK has also implemented significant changes to taxation rules affecting individuals with non-domicile status. Prior to April 6, 2025, UK residents with their permanent home outside the UK were not required to pay UK tax on foreign income. However, from this date, the rules for the taxation of non-UK domiciled individuals have ended, replacing the remittance basis of taxation with a new tax regime based on residence.
Under the previous system, UK resident non-domiciles who hadn’t become deemed-domiciled could choose to be taxed on the remittance basis, meaning they paid tax only on UK income and gains, and on foreign income and gains only when remitted to the UK. From April 6, 2025, all former remittance basis users will pay tax at the same rate as other UK resident individuals on any newly arising foreign income and gains.
There is, however, a 100% relief on eligible foreign income and gains for new arrivals to the UK during their first four years of tax residence, provided they have not been UK tax resident in the 10 tax years immediately prior to their arrival. Former remittance basis users will still be liable for tax on foreign income and gains that arose before April 6, 2025, when they remit those amounts to the UK.
Moreover, a new Temporary Repatriation Facility will be available for individuals who have previously claimed the remittance basis, allowing them to remit foreign income and gains that arose prior to the changes at a reduced rate. This facility will operate for three tax years, with rates set at 12% for the first two years and 15% in the final year.
The recent tax reforms have sparked criticism from various quarters, including MP Richard Tice of Reform UK, who warned that over-taxation is driving millionaires away. He highlighted the significant exodus of wealthy individuals from the UK, particularly in light of the changes to non-dom rules and the broader tax environment.
According to analysis, London is losing its millionaire residents at a rate comparable to Moscow, with 30,000 millionaires having left in the last decade. In 2014, London was home to 245,100 millionaires, but this number dwindled by 12% to 215,700 in 2024. The only city that experienced a higher proportion of millionaire loss was Moscow, where the number of residents with liquid assets over $1 million fell by 25% due to geopolitical tensions.
The data indicates that the UK as a whole lost 10,800 millionaires to overseas countries in 2024, more than double the number who left in 2023. Each millionaire who departed last year would have contributed at least £393,957 in income tax annually, equating to the tax contributions of 49 average taxpayers.
Christopher Groves, a partner at the international law firm Withers, remarked that the UK has been “slowly strangling the golden goose” with its progressive tax regime, which sees the top 1% paying 29% of all income tax. He emphasized that the global market for investors and entrepreneurs is highly mobile, and many wealthy individuals have numerous options for where to establish residency.
Matthew Braithwaite, a client partner at Wedlake Bell, noted that the non-dom reforms have led to a spike in millionaires leaving the UK, exacerbated by the increasingly hostile tax environment over the past decade. He pointed out that jurisdictions like Dubai, Jersey, and Italy have become more attractive alternatives for wealthy individuals.
The Treasury has been approached for comment regarding these developments, as the UK continues to navigate the complexities of its tax regime in a post-Brexit landscape.
