The United Kingdom’s luxury property market has proven to be an appealing choice among the world’s wealthiest individuals. Data shows that the UK is home to the fourth highest number of billionaires worldwide (146), following only China (814), the United States (800) and India (217).
London is no exception. In fact, according to the same research report, the capital is home to the second highest number of billionaires by city (97), after New York (119). There is also no shortage of high-net-worth individuals who reside in London.
Considering all that the city has to offer, it’s hardly surprising that it attracts significant numbers of both local and international prime property buyers. Below, we share a handful of the many reasons that London boasts enduring appeal from both a lifestyle and property investment perspective. And, we talk about how buyers outside of the UK can best navigate the property market.
1. Cultural depth
London has deep cultural roots, with almost 2,000 years of history having shaped the city. It boasts close to 140 museums and has hundreds of libraries. Various literary giants hail from the UK, and the city’s theatre and entertainment scene is abuzz with classical plays, modern productions, musicals and other music performances.
2. International diversity
Today, London is a melting pot of cultures, with over 300 languages spoken – apparently more than any other city in the world. It is home to cosmopolitan neighbourhood and offers culinary experiences from around the globe. Adding to the vibrancy, the city also regularly plays host to many high-profile international cultural and sporting events.
3. Business centrality
Adding to London’s diversity, the city is a major business and financial hub that draws professionals from around the world. Its location, central to EU, Asian and US time zones, and its business-friendly regulation also make it the ideal location for international headquarters, and London’s great transport links add convenience.
4. Design innovation
London is well known for its historical, diverse and innovative architectural features. And branching out beyond this domain, the city is also a node of activity among designers from various disciplines. World-renowned design schools, like the Royal College of Art and Central Saint Martins, are located in London, and the London Design Festival promotes the city as the design capital of the world.
5. Art abundance
In a similar vein, London’s art scene is deeply woven into the historical fabric of the city. Now, London leads the UK’s visual arts sector, which is currently the third largest global art market, according to The 2024 Art Basel and UBS Global Art Market Report. The report also notes that the UK remains a hub for the sale of some of the world’s most valuable artworks.
6. Natural beauty
Although London may be known for its iconic buildings, from Big Ben to Buckingham Palace, there is also much to be said about the natural beauty found in and near to the city. Across Britain, there are 46 Areas of Outstanding Natural Beauty, while London itself is dotted with beautiful walkways, parks and gardens, including Kew Gardens.
7. Tourist appeal
The UK is expected to receive 39.5 million visits in 2024, with a spend of £34.1 billion. There is no shortage of tourist appeal across the UK, from its history and royal tradition to its culture and natural beauty. The same can be said of London and the surrounding regions, with plenty of day trips and activities for all age groups, including numerous outings for children.
8. Sporting action
A tourist attraction in and of itself, the UK’s sporting scene is a global draw. From Wimbledon to the Premier League; the London Marathon to Formula E, among other events, the UK offers a wealth of sporting activity each year. Looking more broadly at physical activity in the UK, including grassroots sport, this contributes £39 billion to the UK’s economy.
9. Educational excellence
The UK is one of the world’s leading centres for higher education, with the University of Oxford topping the list of the best universities in the world, followed by the University of Cambridge that takes the second spot in the UK and fifth place globally. London itself is home to a number of top-ranking universities too, namely Imperial College London, UCL, King’s College London and London School of Economics and Political Science
10. Historical significance
In spite of London being a frontrunner in innovation across various sectors, it maintains its historical charm. As mentioned, the city has been moulded by almost two millennia of history, and this rich heritage is reflected in a number of its buildings, museums, galleries, tourist sites, culture and tradition. The region also features a number of prime historical properties that allude to a bygone era, adding to the region’s age-old beauty.
What should international prime property buyers know about the UK property market?
It’s not difficult to see why London and the broader UK region appeals to many UHNWIs and HNWIs, including those from around the world looking to invest in a primary or secondary property. For international investors, the UK property market offers additional appeal and significant advantage in that there are no legal impediments for foreign buyers. The purchase process does, however, still contain legal components, which buyers will need to carefully acquaint themselves with and prepare for with the help of professional legal guidance.
There are also a number of important factors to carefully consider when looking to invest in prime property in the UK. For the full picture, we recommend working closely with a team of professionals, including a reputable estate agent, a solicitor or conveyancer and a knowledgeable financing representative. But, to offer buyers a starting point, we have summarised some of the key points to be aware of when investing in property as an international.
Property considerations
• Regional variances – Property prices vary drastically across the UK. London properties, for example, generally tend to be more expensive compared with properties in other parts of the UK, over-indexing when it comes to super prime residences. The area may also play a role in the property style, which may include castles in Scotland, country estates in the Cotswolds or prime beach properties on the south Coast. So would need to be considered in terms of local amenities and business opportunities, as well as transport links. It’s essential for buyers to understand these differences and to consider their investment goals when making a purchase decision
• Property type – When purchasing property in parts of the UK, it’s important to be aware that there is a difference between leasehold and freehold properties. Leasehold properties grant ownership of the building, while the land remains owned by a landlord, while freehold grants ownership of the building and land on which the property is located
Legal and tax considerations
• Documentation – Various documents may be required, such as ID, proof of address, and depending on the financing arrangement, proof of funds and proof of the source of funds. In some cases, additional documentation, like the individual’s tax number, may be necessary
• Taxes – For foreign property buyers, surcharges associated with Stamp Duty Land Tax may apply. International buyers should investigate how mortgage repayments, if applicable, might be taxed. It’s also important to note that other tax obligations may come into play in the case of a rental or sale of the property
• Residency – It’s worth noting that purchasing a property in the UK does not automatically grant the buyer residency or citizenship, which remains a separate application process
Financial considerations
• Interest rates and currency fluctuations – International buyers should be mindful that the UK mortgage market is highly advanced, with many providers offering a wide array of lending solutions. However, not all will specialise is servicing the needs of overseas clients. It’s also essential to consider factor currency fluctuations, when considering the property cost and financing.
• Financing options – While mortgaging options are available to international individuals, they are likely to be more complex to arrange given the consideration of multiple jurisdictions and overseas sources of income or wealth, so working with a specialist in international lending is always recommended.
Cash purchases are also allowed, but that, of course, requires the buyer to have a significant amount of capital readily available and may also have tax implications. There is, however, a favourable short-term finance option, known as international bridging loans, which literally closes the gap.
Why are bridging loans an ideal solution for international prime property buyers?
Bridging finance is an excellent way to help international property investors expand in the UK market, especially for high value transactions.
In general bridging loans typically have less stringent eligibility criteria compared with standard mortgages and can therefore be approved faster and are well-suited to property investments as well as for funding prime residential purchases, significant refurbishment plans and/or property auctions, which typically require purchase funds to provided within 6 weeks of the auction date.
Find out why Tenn is the best choice for bridging finance
Tenn understands the UK property market in detail and is uniquely set up to offer bridging loans for high value property transactions for both UK and overseas clients. We are experts in complex lending and have offered high-value bridging finance to numerous international clients for both real estate in London and overseas territories.
Our clients use international bridging finance to complete international property purchases quickly and to release equity from non-UK property. We can specialise in multi-jurisdictional loans and bridging finance when the loan capital won’t be deployed in the same country as the asset. So if you want to join the 146 billionaires already resident in UK please get in touch.