Overseas buyers at record low – but American and Middle Eastern demand reshapes market

The proportion of international buyers registering interest in UK property has dropped to its lowest level since records began, according to the latest research from Hamptons – but shifting global trends are offering new opportunities for estate agents.

In Q1 2025, just 1.0% of all prospective buyers in Great Britain were based overseas, half the level seen in 2015 and the lowest recorded by Hamptons since 2008.

The decline has been driven largely by falling demand from European nationals, many of whom previously relocated for work or investment but have now been deterred by Brexit, tougher immigration rules, and rising acquisition costs.

Prime Central London (PCL) – historically the UK’s international buyer stronghold – has seen its overseas share fall to 2.9%, down from 4.0% last year and a peak of 7.9% in 2009.

INTERNATIONAL HOUSE HUNTERS

Across the board, Europeans made up just 43% of international house hunters in Q1 2025, down from 48% in 2008.

However, the picture isn’t one of uniform decline. Buyers from North America and the Middle East are showing rising interest – and are increasingly looking to make permanent moves rather than purchasing second homes or buy-to-let properties.

North American buyers, predominantly from the US and Canada, now account for 16% of international applicants (up from just 6% in 2008), with nearly 75% intending to relocate.

MIDDLE EAST

Meanwhile, applicants from the Middle East now make up 14% of all overseas interest – the highest on record – with 81% seeking a permanent UK residence.

For agents, this shift represents a new direction for international sales strategy. Overseas buyers are also showing greater interest outside the capital.

One in 10 international applicants are now looking in the North of England – double the proportion recorded a decade ago.

LIVERPOOL

Liverpool leads the way, accounting for nearly half (49%) of all international searches in the North, with Europeans comprising the bulk of interest.

These changes also reflect increasing caution among international buyers regarding tax liabilities.

Since 2021, overseas nationals have faced a 2% stamp duty surcharge on top of standard rates.

Following the October 2024 rise in second home surcharges, the total levy for a £1 million purchase now exceeds £113,000 for a non-UK resident – contributing to a 36% fall in demand for second homes and buy-to-let properties since 2019.

MARKETING STRATEGY

Despite the overall dip in international registrations, estate agents working in areas of high-end, urban, or emerging regional demand are advised to adapt strategies.

Understanding the needs of relocating buyers – particularly those from the US and Middle East – will be key to unlocking this new phase of the international market.

While London remains the top destination for foreign applicants (54% of all international searches), the North, Inner London and key urban hubs offer untapped potential for agents who can speak directly to the evolving profile of today’s overseas buyer.

PLAYING POLITICS

Aneisha Beveridge, Head of Research at Hamptons, says: “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.”

TENUOUS

And she adds: “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.

DRIVING FORCE

“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.”