International buyers continue to seek UK homes despite UK economy concerns

21.03.23

Despite the UK economy and house prices in many sectors currently falling, prime residential property is a sector of the market which continues to flourish as a popular choice for international HNW and UHNW clients looking to relocate or invest.

Whilst these properties have predominantly been in prime Central London, there’s also a keen interest in trophy assets located outside of the capital, although, through a lack of supply, particularly in the countryside, these transactions are undoubtedly fewer in number.

Why is the UK such an attractive place for international buyers?

There are several reasons for this stable trend. One explanation for those moving from overseas is the UK offers an advantageous time zone, being roughly equidistant between North America and Asia.

For all international buyers, English Law is viewed as a safe, stable and secure system under which to buy and own assets, both from a financial and family perspective. The schooling system is also favoured by many international families who then require a bolt-hole in the UK whilst their children are based here.

One huge attraction for US citizens, in particular, is the property tax benefits. State property taxes in the US, particularly in New York and California, are very high. Compare this to the UK, where acquisition taxes are far higher (in the form of stamp duty land tax), but the holding costs are far lower (being limited to council tax and service charge for flats), meaning if US buyers are holding their UK assets for any length of time, it may prove a cheaper alternative to US real estate.

Will the housing market prices dip for high-value houses?

Having spoken to several agents over the last few days, they are still seeing that there is a healthy appetite from individuals in the Middle East, the States and Asia. It is likely that throughout 2023 we will continue to see premium sales continue apace and valuations continue to hold, particularly while stock remains low.

By Charles Miéville, partner for residential property at Forsters LLP