The sale of UK residential properties by overseas private individuals has slowed down.
Research by Bowmore Wealth Group shows that 16,520 UK residential properties were sold by overseas individuals in total in the year to April 2026 versus 18,100 in the previous year.
Data provided by HMRC also shows that just 70 wealthy overseas individuals sold UK residential properties worth more than £5m versus 80 in the previous year.
The government abolished the non-dom tax status in the Autumn Budget in 2024 which may have led to an increase in property sales by wealthy overseas investors in the UK.
However, it seems that this pace of selling has subsided.
Bowmore points out that the increase in tax levied on buy-to-let investment has also made the UK residential property less attractive to both overseas and UK investors.
From 2027 the tax on income from property will be raised by two percentage points for investors.
Previous tax changes now prevent investors from deducting their mortgage interest payments from their rental income.
In addition, changes under the Renters Rights Act have made buy-to-let investing less attractive for example by making it far harder to bring a tenancy to an end and placing restrictions on rental increases.
Recent research from the Adam Smith Institute found that the number of individuals in the UK with a net worth of a million pounds or more has fallen 7% since 2024 and is at the lowest level since the Global Financial Crisis in 2008.
David Floyd, head of private clients of Bowmore Financial Planning, says: “It appears to be a period of readjustment for UK and oversees owners of UK property. Residential property, as an asset class, is having to face a number of challenges.”
“The Renters Rights Act is just that the latest catalyst that encouraged investors to reduce their exposure to residential property in favour of equities or short-term bonds.”
“Net yields on rental property in London are around 2% and over the decade UK house prices have fallen or stagnated in real terms.”
“When you can get a risk free 4.6% on a five year Government bond it makes the net yields on residential property look very low.”
“Those low net yields on buy-to-let property were justifiable when property prices were roaring away but not now.”
“The administrative burden of being a landlord, as opposed to being a stock market investor, have always been quite onerous and the new Renters’ Rights Act has added an extra level of uncertainty into being a landlord.”
