While much has changed in the past five years a newly published government report offers fascinating insight into the motivations of overseas property buyers investing in the UK before the pandemic, Brexit finalisation, and the introduction of the Stamp Duty surcharge on non-UK residents.
Back in 2020, HMRC commissioned a comprehensive study to understand what drove non-resident buyers to purchase property in the UK. The findings – only now released – are based on nearly 300 interviews with individuals who had bought homes while living outside the country. Though circumstances have evolved since then, the results offer a valuable snapshot of how international buyers viewed the UK property market and what influenced their decisions.
London Leads the Way
Unsurprisingly, London topped the list as the most popular destination, with 38% of respondents purchasing their most recent property in the capital. Flats and apartments were significantly more popular than houses, with the average purchase price sitting at £442,000. However, nearly 1 in 10 transactions exceeded the £1 million mark, underlining the importance of the super-prime sector to overseas investors. Buyers who were aware of the then-upcoming Stamp Duty surcharge typically purchased more expensive properties (averaging £504,000) than those who were unaware (£337,000).
Why Buyers Chose the UK
The most common reasons for buying UK property were deeply personal:
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57% had family or personal ties to the country
- 45% cited personal familiarity with the UK
- 42% saw it as a safe investment destination
These motivations were especially strong among high-value property buyers, who also took a long-term view—78% planned to hold onto their purchase for more than five years. Over two-thirds (63%) of respondents said their purchase was made with rental income in mind, particularly outside of London. Meanwhile, homes purchased in the capital were more likely to be used as secondary residences or for family use.
What Impacted Buying Behaviour?
When the survey was conducted, only 63% of respondents were aware of the forthcoming 2% SDLT surcharge on overseas buyers. Of those who were, nearly half (47%) said it made them less likely to purchase again in the UK—compared to 34% of those who were unaware. Other deterrents mentioned included Brexit and the Covid-19 pandemic, both of which were cited as reasons for delaying or reconsidering future UK property purchases.
Long-Term Optimism
Despite short-term challenges, 74% of buyers still expected the value of their UK property to increase over the next decade. Only 6% anticipated any price decline, reflecting strong faith in the long-term stability of the UK property market.
Looking Ahead
Although the market has since been shaped by new tax regulations and global events, this research reinforces the enduring appeal of UK real estate—particularly in London. While recent policy shifts may be dampening some enthusiasm from international investors, the fundamentals that once made the UK attractive—stability, familiarity, and long-term growth potential—remain compelling. With new reforms, tax changes, and shifting political landscapes continuing to shape the outlook for overseas buyers, it will be interesting to see how these motivations evolve in the years ahead. For now, the UK remains on the radar of global investors—and for many, still represents a safe and strategic place to buy property.
Source: Prime Resi Backlink
