The number of UK residential properties sold by overseas individuals fell by almost 9% during the latest tax year, according to HMRC figures obtained by Bowmore Wealth Group.
Non-resident individuals sold 16,520 homes in the year to 5 April 2026, down from 18,100 during the previous 12 months.
Activity also declined at the top end of the market, with 70 non-residents selling properties worth more than £5m compared with 80 a year earlier.
Bowmore says the figures suggest the pace at which overseas owners are disposing of UK residential property has begun to ease following a period of adjustment to tax and regulatory changes.
PRIME SALES SLOW
The abolition of the non-domiciled tax regime, announced in the Autumn Budget of 2024, had been expected to encourage some wealthy overseas owners to reassess their UK property holdings.
However, the latest figures indicate that fewer non-residents sold during 2025/26 than in the preceding year.
Bowmore also points to the tax treatment of buy-to-let property and reforms introduced through the Renters’ Rights Act as factors affecting the relative attraction of residential investment.
From 2027, income tax rates applying to property income are due to increase by two percentage points. Individual landlords are also unable to deduct their full mortgage interest costs from rental income before calculating tax.
PROPERTY FACES COMPETITION
David Floyd, Head of Private Clients at Bowmore Financial Planning, says: “It appears to be a period of readjustment for UK and overseas owners of UK property. Residential property, as an asset class, is having to face a number of challenges.
“The Renters’ Rights Act is just the latest catalyst that encouraged investors to reduce their exposure to residential property in favour of equities or short-term bonds.
“Net yields on rental property in London are around 2% and over the decade UK house prices have fallen or stagnated in real terms.
“When you can get a risk-free 4.6% on a five-year Government bond it makes the net yields on residential property look very low.
“Those low net yields on buy-to-let property were justifiable when property prices were roaring away but not now.
“The administrative burden of being a landlord, as opposed to being a stock market investor, has always been quite onerous and the new Renters’ Rights Act has added an extra level of uncertainty into being a landlord.”
