International Buyers Pull Back from UK Property Market

The UK property market has long been a magnet for international buyers, but new data shows that interest from overseas has slumped to its lowest level on record. Only 1% of homebuyers in Great Britain during the first quarter of 2025 were based abroad, the smallest proportion since records began in 2008, according to estate agency Hamptons.

That is a striking turnaround from the pre-Brexit era when foreign buyers, particularly Europeans, flocked to the UK. Now, though, higher taxes, sluggish price growth and political changes have cooled enthusiasm, reshaping who is buying and where.

Europeans Lose Their Appetite for Property

Analysts say Brexit and the pandemic have certainly taken their toll. In 2008, Europeans comprised nearly half (48%) of all international buyers in the UK. But this year, their share has tanked to 43% (see table). The steepest descent has been in prime central London areas like Kensington, Chelsea and Westminster, where European buyers now account for 44% of overseas purchases, down from 55% in 2008.

Many Europeans, especially those from France and Italy, used to relocate here for work, say analysts, but Brexit put a pause on that.

Americans Step In

As European interest wanes, buyers from North America are piling in. In Q1 of 2025, they made up 16% of international buyers, more than double their share in 2008. And unlike investors snapping up holiday homes, nearly three-quarters are looking to move permanently.

The weak pound has helped. For Americans buying in dollars, UK property is 17.5% cheaper or so than a decade ago. A £1 million home in 2014 would cost them around £825,000 today just from a stronger dollar, says an analyst. That often outweighs higher stamp duty costs.

Middle Eastern buyers are also on the rise, now making up 14% of international demand, a record high. Unlike previous years when many bought second homes, 81% are now seeking a permanent move.

Where Are They Buying?

London is the top pick with 54% of overseas buyers targeting the capital. However, interest has drifted back to central London after years of buyers eyeing the suburbs. In Q1 2025, 45% of international applicants looked at inner London, which is up from 33% a decade ago.

Meanwhile, the North of England is gaining traction. One in ten overseas buyers now consider northern cities, up from 5% in 2015. Liverpool is the standout, attracting nearly half of all international interest in the region, in part thanks to European buyers, who make up two-thirds of foreign demand there.

Why the Drop in Demand?

Three factors have put off international buyers.

• Higher Taxes – International buyers purchasing a second home in England now pay a 7% surcharge.
• Sluggish Price Growth – In prime central London, prices have risen only 3% in the last decade, making it a less attractive investment.
• Brexit & Policy Changes – The end of free movement and changes to "non-dom" tax rules have made the UK less appealing for some.

Conclusion

Although the UK’s global appeal has taken a hit, it has not disappeared entirely. London’s culture, amenities and stable legal system still entice buyers, just fewer of them.

And with Americans and Middle Eastern investors filling some of the gap left by Europeans, the market is evolving rather than collapsing.