Each spring and summer, buyers from the Middle East descend on London, eager to find themselves a bolthole in the British capital.
This annual migration began in the 1970s when the first oil-rich buyers from gulf states began to explore real estate investment in London, buying up some of its biggest and most expensive homes in the process. Owning a London home became a must-have status symbol and the Arab Spring of 2011 encouraged fresh waves of investment as buyers sought to bank their money in a safe, secure environment.
Today the lure of London – with its great shopping, nightlife, history, culture, and pleasantly cool climate – is even stronger amongst buyers from Saudi Arabia, Qatar, and the UAE.
Not only do they want to summer in Europe but the weakness of the British pound against international currencies pegged to the dollar makes UK real estate look like a very good deal right now.
Beyond its lifestyle benefits Middle Eastern property investment in London property is driven by its reputation as both a safe haven and a global financial hub.
And although London has not seen the kind of price growth evident in emerging markets like Dubai in recent years, its sheer stability makes it an attractive market for investors alarmed by geopolitical uncertainties elsewhere.
Trophy purchases included the former Cyprus Embassy on Park Street, Mayfair, sold to a Middle Eastern tycoon for £25m, and a mansion in Holland Park, sold to members of Abu Dhabi’s Al Nahyan royal family for £61.5m
During 2024, buyers from the Middle East played a massive role in super prime sales in the British capital, accounting for one in five sales over £20m according to house price analyst LonRes.
Perhaps not completely coincidentally 20 per cent of Black Brick’s clients in 2024 were from the Middle East.
With big budgets to play with, investors from the Middle East tend to look for prestige property in well-established neighbourhoods close to Hyde Park, notably Mayfair, Knightsbridge, Kensington, and Belgravia.
East access to high end shopping, in particular Harrods, is important to these buyers, as is proximity to green space.
Some opt for highly serviced lock up and leave modern apartments, whilst some are willing to take on substantial townhouses and mansions with space for extended family and staff. Middle Eastern buyers tend to want turnkey homes with lavish interiors, rather than fixer uppers or homes in dated buildings. Lifts and air conditioning are musts, and buyers also appreciate lateral space with high ceilings, and separate staff quarters.
Middle Eastern buyers of investment, residential and commercial property have brought a huge injection of cash to London, spending an average of £87.27m each, up 24 per cent from £70.46m in 2023.
All overseas buyers have had to swallow a series of bitter pills in recent years, including a recent increase in Stamp Duty for buyers of second homes from three to five per cent. This means that, in total, an international buyer spending £5m on a second home would need to pay just over £860,000 in Government buying taxes, at a rate of just over 17 per cent.
The other big change, introduced in April 2025, is the beginning of the end of the non dom system which had allowed high net worth international buyers to live in the UK and pay tax only on their UK income.
Once the non dom system is phased out it will be replaced with a new residence-based test which will bring foreign earnings into the UK’s inheritance tax system.
However, and despite reports of long-time residents selling up and leaving Britain, big ticket sales have continued almost unabated. Christie’s International Real Estate says that the number of super prime transactions in the final quarter of 2024, in the immediate aftermath of the non dom announcement, were double that of the same period in 2023.
London’s prime property market has seen little in the way of price growth since its 2011 to 2014 boom, thanks to a combination of global and national uncertainties, high buying costs, and a general air of caution.
And pundits disagree on the direction prices will take this year. Estate agent Knight Frank is forecasting annual price growth of two per cent in Prime Central London (PCL) this year, but Savills predicts a drop of four per cent.
Of course much will depend on how the various global flashpoints play out but Black Brick supports Savills’ more conservative view of the potential for price growth because in a buyers’ market with plenty of new stock coming onto the market price sensitivity is the name of the game.
However the latest data from house price analyst LonRes suggests that 2025 won’t be a total wash out. Average sale prices in prime London inched up 0.6 per cent year-on-year during February – the first price rise recorded since the summer of 2023.
And in the same month there was an encouraging jump in activity levels for prime central London homes valued at £5 million or above, up 13.8 per cent compared to February 2023, and 33 per cent more than the pre-pandemic average.
Taking Next Steps with a Buying Agent
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