Why US buyers are investing in the UK’s prime real estate market - Lawrence Stephens
As record numbers of American buyers enter the UK’s prime property market, LPF Member, Lawrence Stephens’ Directors Alexa Kordowicz and Leigh Sayliss explore the drivers of this movement and highlight the critical tax considerations that must be addressed to protect investments and preserve long-term financial efficiency.
Transatlantic Migration at a High
The UK has become an increasingly compelling destination for wealthy US buyers. Statistics from the Home Office reveal a 30% year-on-year rise in US applications for UK citizenship, with more than 6,600 Americans applying in the year to March 2025. The first quarter of 2025 alone saw 1,931 applications, which marks the highest quarterly total in twenty years.
While well-publicised celebrity relocations have drawn headlines, the reality is that London and its surrounding countryside are seeing a structural migration trend, driven by lifestyle aspirations, political disillusionment in the US, and the pursuit of security and stability.
Prime London and the Cotswolds Dominate the Map
American buyers are now reported to be the largest group of non-British purchasers of prime central London real estate, particularly in Mayfair, Marylebone, Chelsea, and Belgravia. Outside of the capital, the Cotswolds has become a sought-after destination for those seeking rural charm without compromising access to the City.
The appeal goes beyond property. The UK offers wealthy families a combination of cultural familiarity, English-speaking convenience, and lifestyle benefits, from lower private school fees to access to free healthcare. The relative safety of the UK education system is also a significant factor for US parents, with factors such as school shootings being a persistent fear in the US.
Currency Strength and Lifestyle Shifts
With the US dollar at strong levels against the pound, American buyers have increased purchasing power in the UK. Combined with a softening property market and the post-pandemic rise of flexible working, many Americans are taking advantage of the opportunity to establish a second home abroad or relocate permanently.
The UK continues to be viewed as a safe haven for capital, offering global prestige, heritage, and proximity to continental Europe - factors that resonate strongly with high-net-worth individuals.
The Importance of Early Advice
Despite the allure, the tax landscape for American buyers in the UK is complex. Early engagement with advisers qualified in both US and UK tax law is crucial, ideally before any property offer is made.
Key considerations include:
· Stamp Duty Land Tax (SDLT): Surcharges apply to second homes and to non-residents, often adding significantly to acquisition costs.
· Capital Gains Tax (CGT): The UK regime differs markedly from that in the US, and although tax treaties mitigate double taxation, unexpected liabilities can arise.
· Inheritance Tax (IHT): At a rate of 40% on UK assets, IHT can represent a significant exposure for US families. While relief may be available via tax treaties, the UK’s thresholds are substantially lower than the US equivalent.
· Ownership Structures: Personal, trust, or corporate ownership each carry differing implications, including potential exposure to the Annual Tax on Enveloped Dwellings (ATED).
With the right planning, these risks can be mitigated. Structuring ownership appropriately at the outset allows clients to protect assets, optimise their tax position, and avoid costly mistakes.
A Growing Transatlantic Trend
The attraction of the UK for American families shows no signs of slowing. As divides deepen in the US, the UK’s unique combination of cultural heritage, stability, and lifestyle benefits continues to draw high-net-worth individuals seeking both security and opportunity.
At Lawrence Stephens, our Residential Real Estate and Tax teams work seamlessly to provide bespoke advice to clients, navigating the nuances of high-value property acquisitions while safeguarding long-term wealth.
About Lawrence Stephens
Lawrence Stephens is a leading London law firm with a reputation for delivering strategic, pragmatic advice to high-net-worth individuals, families, and businesses. Our Residential Real Estate team specialises in prime and super-prime transactions, while our Tax team provides sophisticated planning advice. Together, we ensure our clients’ acquisitions are structured for both immediate success and long-term financial efficiency.
About Alexa and Leigh
Alexa Kordowicz is a Director in the Residential Real Estate team at Lawrence Stephens. She specialises in all aspects of residential property work, including freehold and leasehold sales and purchases, remortgages, licences to alter and transfers of equity. Her main practice is in prime central London.
Leigh Sayliss is a Director at Lawrence Stephens, leading the Tax team. He advises on tax aspects of a wide range of corporate sales and acquisitions, including on structuring for commercial and residential property acquisitions and property development.
Get in touch:
Alexa Kordowicz
Director - Residential Real Estate
+44 (0)20 3837 9854 | +44 (0)7849 638390
akordowicz@lawstep.co.uk
Leigh Sayliss
Director - Tax
+44 (0)20 3897 7274 | +44 (0)7521 426938
lsayliss@lawstep.co.uk