The Hamptons International Applicant Index suggested this decline in demand was due to the effects of Brexit, the pandemic and higher stamp duty costs.
Just before the Brexit referendum in 2015, 2% of all house hunters in Britain were based overseas.
Demand from international buyers for property in Prime Central London (PCL) has also dwindled, again falling to the lowest share on record. In Q1, this made up 2.9% of applications compared to 4% in 2024 and 5.7% a decade ago.
Hamptons put this down to suppressed price growth, where average prices had risen by just 3% over the decade, as well as higher stamp duty and other tax changes.
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Growing interest from buyers in America
The report suggested that the drop in demand was due to fewer Europeans moving to Britain as, in 2008, they accounted for 48% of all overseas house buyers. By the last quarter, Q1 2025, this had declined to 43%.
This fall in interest from Europeans was particularly notable in France and Italy, Hamptons said. However, it added there had been a “slight recovery” in recent years as demand was currently higher than in 2020, just after the UK officially left the EU and this slipped to 37%.
Weaker demand has been more prevalent in the PCL market, with interest from Europeans accounting for 44% of applications in Q1 this year compared to 55% in 2008.
This is slowly being replaced by buyers from North America, primarily the US. Applications from buyers in this region reached a record high of 16% in the first quarter of the year, more than double the share of 6% back in 2008.
Some 74% of applicants from North America want to move to Britain permanently, while 26% are looking for a second home or investment property.
Broken down by country, Americans and Canadians make up the largest overseas buyer group, overtaking French people and people from Hong Kong.
Demand from buyers in the Middle East has also risen and made up 14% of all international applicants in Q1, representing a new high and up from 8% in 2008. Hamptons’ data found that more buyers from the Middle East were deciding to relocate to Britain permanently, accounting for 81% of applicants in Q1. This was also the highest on record and up from 11% a decade ago, when most Middle Eastern applicants were buying a second home.
On the other hand, there has been a fall in the number of applicants from Hong Kong wanting to purchase property in Britain. This has slipped from its peak of 17% in 2020, just before the launch of the British National Overseas (BNO). Hong Kongers were the most common international applicants in 2019 and 2020, but by Q1 this year, they only made up 2% of applications – a record low.
International buyers seeking homes in the North
London is the main part of Britain appealing to house hunters from overseas, with 54% of all applicants seeking property in the English capital in Q1.
A tenth of international applicants were interested in property in the North of England, up from 5% a decade ago. Three-quarters of the applicants wanting a home in the North of England were looking to relocate permanently.
Hamptons noted significant demand for property in Liverpool, attracting 49% of all international applicants seeking a purchase in the North.
This rising interest in the North has coincided with a fall in demand for property in Southern regions, with regions around London accounting for 29% of international applications, compared to 40% in 2015.
Majority of international buyers want permanent homes
Hamptons said more applicants from overseas were looking for permanent homes in Britain, rather than holiday or investment properties.
The share of international applicants looking for a second home or buy-to-let (BTL) property in Britain has fallen by more than a third in the last five years, dropping from 30% in 2019 to 19% at the start of this year.
The firm attributed this to the higher stamp duty for international purchasers and changes to non-dom tax status.
Tax changes influencing international buyer interest
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.”
