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Foreign ownership of UK property plummets

Foreign ownership of UK property plummets

Overseas ownership of UK properties has decreased significantly since 2015. The value of property assets held by foreign companies has increased, but the number of purchases has slowed due to Brexit and regulatory changes, according to Search Acumen.

The number of UK properties owned by overseas investors has significantly decreased since 2015, as Brexit and increased regulation have dampened investor appetite. While the value of property assets held by foreign companies has reached an all-time high, increasing by 40% or £38.5 billion in three years, the volume of purchases has notably slowed, according to analysis by Search Acumen.

In 2024, 3,171 properties were registered, which is just over half the number registered in 2019. Andrew Lloyd, director at Search Acumen, highlighted that the size of property wealth currently under the ownership of overseas companies is “eye-watering.” He noted that the decline in ownership indicates either that investors are storing capital outside the UK, suggesting a decline in global appeal, or that the UK’s property transaction system is becoming more stringent.

Measures to increase transparency have been strengthened in recent years. Anti-money laundering regulations, such as the Register of Overseas Entities, have been implemented to deter illicit purchases.

Lloyd suggested that the likely answer to the decline in ownership is a combination of factors. The UK’s exit from the EU had significant economic consequences, with new taxes and rules for overseas investment playing a critical role in the decline since 2022, making the UK a less attractive place post-Brexit. He also noted that reduced anonymity following the introduction of the register might have deterred some purchases.

Additionally, rising interest rates, higher borrowing costs, falling yields, and slow capital growth have likely made speculative investment less rewarding. Geographically, Jersey has overtaken the British Virgin Islands as the top country for holding UK wealth through overseas companies, possessing £57 billion worth of UK property assets. This accounts for a significant 25% of all properties registered under overseas company ownership, followed by the British Virgin Islands at 21%, Guernsey at 13%, and the Isle of Man at 11%.

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BQ

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