What is the current outlook for the UK property market?

• 20 July 2021
• News
• Residential property
,
• US/UK

Last updated: September 2026

High-value London homes remain popular

Property experts from across the industry agree that while many areas of the UK residential property market are slowing in light of recently increased costs of finance and wider political concerns in general, trophy assets continue to be a popular with international buyers, both as a place to call home and for investment purposes.  For US buyers, demand for UK residential property, and London in particular, has proved notably resilient. While recent changes to the UK’s non‑dom regime have prompted some international purchasers to reassess their position, US buyers have generally been less impacted. In Prime Central London, US buyers continue to be drawn to high‑quality apartments, period houses and landmark developments that combine heritage value with modern living, with schemes such as The Whiteley and 1 Mayfair attracting American buyers seeking a London home to live in when spending time in the UK, whether or not they ultimately relocate here. Given the new FIG regime, there has also been a marked increase in interest in renting super prime properties, particularly given the Stamp Duty Land Tax and Inheritance Tax implications of owning a property.

Potential political changes

Despite tax changes, it is hoped that Prime Central London property will remain attractive to foreign purchasers given values today in some cases are 25% down on pre-Brexit prices in real value terms making for a good long-term investment, this is in spite of changes over the years to SDLT, which have included:

• The introduction of a surcharge of 2% for non-UK resident purchasers completing on purchases from 1 April 2021.
• A surcharge of 3% introduced in April 2016 for purchasers who already owned a residential property anywhere in the world (and were not replacing their main residence) at the time of completion.
• An increase in the above 3% rate to 5% introduced on 31 October 2024.
• A “high value council tax surcharge” to be implemented in April 2028, which will lead to a charge of between £2,500-£7,500 p.a. for properties over £2m.

This means that SDLT rates for individual purchasers can now be as high as 19%.

Particular interest from the US

In terms of the international marketplace, Knight Frank continue to see steady interest from US-based buyers, with demand coming from established wealth centres across both the East and West Coast. While some buyers have repositioned domestically in recent years, prime city markets are showing renewed resilience, particularly where supply remains limited and pricing has adjusted.

Jason Mansfield of Knight Frank, Head of US Residential comments: 

“Although we support clients with their property needs across the United States, New York remains the primary destination for many of our international buyers. Despite broader economic uncertainty, pricing has held steady, rental values continue to rise, and constrained inventory is underpinning overall resilience. Demand remains diverse, and the city continues to provide the long‑term stability and depth that many of our clients seek.

Los Angeles is also demonstrating notable resilience at the top end of the market. While the past year brought meaningful challenges – including tax changes, higher insurance costs and the impact of last year’s fires – activity has remained robust. Sales above $30 million have been strong, and although some buyers initially explored moves to lower‑tax states during Covid, many are now returning. Pricing is becoming more realistic, new wealth segments are active, and several key neighbourhoods appear well positioned as we move through this year.”

Comparatively, the UK still remains attractive due to its lower holding costs, the current low exchange rate, a great education system and other niche factors. We are, for example, seeing instructions from US clients with an interest in British history, acquiring diverse properties from listed country estates to apartments in very high end Central London conversions where the historical importance of the property is a unique draw. These attractions are however increasingly set against concerns over high borrowing costs both for owner occupiers and those with investment properties, particularly as these rising costs cannot be offset against income tax.

Paddy Dring of Knight Frank, Global Head of Prime Sales and Private Office comments on Americans in London:

“In recent years, the profile of international buyers in Prime Central London has shifted subtly, reflecting a market attuned to wider global dynamics. Americans have strengthened their position as the leading overseas purchaser group, rising from 9.4% in 2023 to 13.1% in 2025. Demand from China has eased slightly – from 10.9% to 8.6% – while interest from France and Italy has fluctuated but remained consistently engaged, underpinning an ongoing appetite for lifestyle-driven acquisitions.

Taken together, these movements point to a market that is recalibrating around buyers who prioritise stability, quality, and long term fundamentals. Despite geopolitical uncertainty and evolving tax environments worldwide, London continues to stand out for its transparency, liquidity and reliability – attributes that international purchasers consistently value. These qualities reinforce its status as a steady anchor within the global luxury landscape.”

UK-US cross border issues

Against this backdrop it is important to draw attention to the specific US-UK cross border issues that may arise from US connected persons owning UK property. It is essential to incorporate these UK assets into an individual or family’s wider tax, estate and wealth plans.

We explain some of the key crossborder issues at play and reveal the planning options available to protect against these risks.

Disclaimer

This article reflects the law as of September 2026. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.