Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting to read:%0A%0A {0} %0A%0A {1}
Residential: Discount For Overseas Buyers In Prime Central London Residential: Discount For Overseas Buyers In Prime Central London

Residential: Discount For Overseas Buyers In Prime Central London

Millie Harper • 26/10/2022

Despite political uncertainty and a relatively gloomy economic outlook, the wall of capital targeting prime central London (PCL) residential opportunities continues to be robust, with overseas investors continuing to look to deploy money into London. This should be of no surprise, with the sector potentially offering good value for cash-rich investors.

Despite strong growth since summer 2021, PCL capital values remain 9% lower than 2015. PCL values peaked in January 2015 at £1,830 psf (365-day average) and fell to a low of £1,505 during the pandemic. Since then, values have increased to £1,671, but this remains 9% below the 2015 peak.



The key reason for the drag on values since 2015, has been the change in the way Stamp Duty Land Tax (SDLT) is calculated. This pushed up the amount of tax a PCL buyer would typically pay. Previously, SDLT was calculated using a single flat rate of tax on the entirety of each residential purchase. The 2014 reform introduced a new progressive system where different rates apply to each portion of the amount paid within each price band. The reform increased the amount of tax paid on property purchases over £125,000.  

A £2.5 million property in PCL, SDLT before the December 2014 reform would have cost £175,000. After the reform, it cost £213,750, with that reduced slightly to £211,250 post mini-budget.

The UK Government has since followed up the wide-ranging 2014 SDLT reform with a raft of additional measures intended to target investors. These include: 

  • An extra 3% tax on additional properties, introduced in 2016. This added £75,000 to the SDLT bill for the purchase of a £2.5m property, taking the overall amount payable to £288,750 (£286,250 post mini-budget);
  • An additional 2% surcharge for overseas buyers, introduced in 2021. Adding another £50,000 to the tax bill;
  • A suite of new taxes applied to purchases made by companies, partnerships, and collective investment schemes. 


As well as these tax changes, the period between the Brexit Referendum and the UK leaving the EU undermined buyer confidence in the market and created further uncertainty, with the pandemic quelling demand even further, due in part, to its impact on people who travel internationally.

These challenges – and the limited bounce back – means that there are now attractive opportunities for those looking to purchase in PCL.  


The greatest differentiator in value is likely to come from the weakness of sterling. The declining value of the pound means that overseas buyers are likely to get more for their money, despite having to pay higher SDLT.

Financial instability has caused the pound to drop against other currencies. Take the US dollar for example - in January 2015 the UK to USD Spot exchange rate was 1.51, and this is now only 1.13.   

If we take into account the PCL capital value discount (2015 vs 2022) and the depreciation of the pound, overseas buyers are receiving a healthy discount in PCL. Discounts range from 17% with the Australian dollar to 32% with the US dollar. A 32% discount on a £2.5 million property is £800,000, which certainly outweighs the higher SDLT bill. 

We expect this discount to attract overseas buyers and help protect the PCL market from the looming economic headwinds.  


Sources: Cushman & Wakefield, Moody's, LonRes (365 day average)

For further information on prime central London residential values, please contact Millie Todd.

Insights in your inbox
Subscribe to get our latest research, thought leadership, insights, and news.


London Big Ben Westminster Bridge sunset

UK MarketBeat

Analyse quarterly UK commercial property activity across office, retail and industrial real estate sectors as well as the Central London residential market. Find data on supply, demand and pricing trends at the market and submarket levels.
Edward Bavister • 15/07/2024
REsidential Forecast
Article • Investment / Capital Markets

Residential Forecast 2024

Explore the Residential Forecast for 2024 by Cushman & Wakefield, offering insights into the UK housing market. Uncover trends in house prices, sales market shifts, and rental market projections.
Millie Harper • 04/07/2024
pillows on hotel double bed

Hospitality Market Trends & Data

The latest hospitality market insights are based on the in-depth analysis of our extensive data sets, surveys of investors, operators and lenders and up-to-date market intelligence from our team members on-the-ground in all major European markets.

Bořivoj Vokřínek • 11/04/2024

How we can help

Residential - Capital Markets
Our national Residential Investment & BTR team leads the UK market in providing expert advice to investors and developers looking for new residential investment opportunities, or who wish to acquire, develop or dispose of rented portfolios. 
Learn More
Capital Markets

Are you ready for what’s next in the real estate industry? Our Capital Markets team advises institutional and private owners, occupiers, investors and developers on their most significant transactions.

Learn More
Equity, Debt & Structured Finance

In an increasingly competitive and complex environment for real estate investment, financing structures and deal terms that maximise value are more important than ever. With deep domain expertise in financing and a strong track record of completing transactions at exceptional terms, Cushman & Wakefield can help you find the right solution.

Learn More


Get in touch and we can assist with any additional information you need.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All