International buyers shun top end of the London housing market

The number of international buyers looking to buy London mansions has fallen to its lowest recorded level as stamp duty increases and broader tax changes weigh on housing demand.

The proportion of international applicants – or people registering to buy a home – in Great Britain fell to one per cent of all buyers in the first quarter or 2025, its lowest level on record, according to estate agents Hamptons.

The decline in demand was driven by fewer European buyers, as well as the general effect of higher stamp duty and the end of the non-dom loophole.

“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,” Aneisha Beveridge, head of research at Hamptons, said.

“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,” Beveridge added.

During the first quarter of 2025, only 15.8 per cent of prime London properties had found a buyer, marking a 3.9 per cent reduction on the previous quarter, according to Benham and Reeves.

The average property in prime central London is 21.2 per cent lower than its peak in June 2014 – a saving of £1.2m on the average prime central London property, which is currently worth £4.6m, according to Savills.

“The case for buying a home, particularly in Prime Central London, has become increasingly tenuous for some international buyers,” Beveridge added.

Stamp duty on a £20m super-prime home is just under 12 per cent for the portion above £1.5m, amounting to around £2.3m – equivalent to years of renting a super-prime housing.

“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,” she said.

Wealthy Americans make up an increasing proportion of London’s super-prime market – applicants from North America, primarily from the United States, accounted for a record 16 per cent of all international buyers looking to purchase a property in Great Britain during the first quarter of this year, according to Hamptons.

Estate agents Cluttons, too, has experienced a “noticeable uptick in demand” from the US post-election.

But the American demand only goes some way towards making up for the retreat of other international buyers – as other buyers fall away, they are now  the largest single international buyer group from overseas.