There’s been an influx of mortgages issued worth more than £5 million, driven by non-doms departing from the UK.
In 2024 there were £3bn worth of mortgages at the £5m+ mark, a 22% increase on the previous year, according to analysis from chartered accountancy firm Lubbock Fine
Non-doms are being replaced by wealthy UK residents after the UK government announced that they would have to pay UK tax on overseas earnings from April 2025.
As a result many non-doms are relocating to Dubai, Portugal, Italy and the US, where tax regimes are more favourable for wealthy foreign residents.
Andrew Noton, partner at Lubbock Fine, said: “With more non-doms leaving the UK market a significant number of new prime properties have been added to the market.
“Wealthy UK residents are now seizing the opportunity to snap up those properties and move up the property ladder.
“These wealthy UK buyers are most often using mortgages – rather than cash – to fund purchases.
“They either prefer to or need to borrow the sums required rather than sell their down some of their other investments or they have to fund the purchases from future income.
“Non-doms on the other hand more frequently paid in cash. Not all of the non-doms leaving the UK are selling their properties, many are keeping them and renting them.”
“The UK property market is seen as much more stable than many overseas residential property markets.”
The Foreign Income and Gains (FIG) regime came into effect on April 6 2025.
Under the new regime, new UK tax residents won’t pay tax on foreign income and gains for the first four years of their residency, regardless of whether the income is brought into the UK.
Noton added: “The new FIG tax treatment is very attractive to overseas wealthy individuals.
“These individuals have substantial buying power, but they are primarily opting to rent first – rather than committing to high value property purchases.”
The number of new sales instructions in the first six months of the year in prime central London (PCL) was 32% higher than the five-year average (excluding 2020), Knight Frank data shows.