The UK’s reputation as a must-have location for wealthy overseas house buyers has taken a knock today after a leading estate agency claimed that activity is at its lowest ever.

Hamptons says the number of overseas house movers registering to buy property dropped by 1% during the first three months of this year, and by 2.9% in London’s central areas.

This drop is predominantly due to fewer Europeans coming to live and work in the UK, who made up 45% of foreign house hunters in 2008 but now represent 43%.

But what may worry some prime central London agents more is that overall the number of overseas house hunters within the UK market has dropped from 5.25% to 2.9% over the past seven years.

Hamptons blames this trend squarely on Brexit, the COVID pandemic, change to the ‘non-dom’ tax scheme and recent hikes in Stamp Duty, and are the reason for what ‘sluggish’ price growth in boroughs such as Kensington and Chelsea, Westminster and the City of London, where property values have risen by just 3% over the past ten years.

The agency says this foreign house buyers ‘exodus’ would be more dramatic if it wasn’t for the increased number of US citizens seeking to buy a ‘safe haven’ home in the UK at the moment, with many also looking for investment properties in the North of England.

“Political events worldwide continue to influence demand for UK property from international buyers,” says Aneisha Beveridge, Head of Research at Hamptons.

“But more recently, it’s tax changes that have stemmed the flow of overseas house hunters.  Stamp duty increases, particularly for those purchasing second homes, combined with Brexit and amendments to the tax treatment of non-doms, have added to costs and reduced the lure of property in the UK.

“The case for buying a home, particularly in Prime Central London, has become increasingly tenuous for some international buyers.”