The Labour government has made boosting economic growth its central mission, working to position the UK as a top destination for global investment. In the property market, however, little encouragement is needed.
After all, it is estimated that almost 200,000 properties in the UK are already owned by foreign buyers, according to data from estate agents Benham and Reeves.
Typically, this demand is perceived to come from a few concentred regions, such as the Middle East or east Asia. However, a quieter but powerful shift is under way, and there is a growing force in the property investment landscape: the emerging global middle class.
An expanding global investor base
Raw Capital Partners recently surveyed 300 UK mortgage brokers to understand where international demand has been coming from over the past five years. The results reveal a far more geographically diverse investor base than many might assume.
While traditional strongholds like Europe, the Middle East and UAE remain key sources of investment (30 per cent of UK brokers say they have worked with clients from these regions in the past five years), significant demand is also emerging from North America (25 per cent), South America (25 per cent), and Central America and the Caribbean (24 per cent) – surprisingly, just 23 per cent of brokers reported working with clients from east Asia.
Furthermore, regions often overlooked in discussions around UK property investment – such as Australia and Oceania (20 per cent) and Africa (16 per cent) – are clearly playing a growing role in brokers’ businesses.
Indeed, the fact that one in six brokers are now working with clients from Africa aligns with a trend that our team has observed in recent years: as emerging economies experience rapid growth – Africa, for example, will be the second fastest-growing region globally this year – the emerging middle classes of these countries are turning to the UK property sector as an investment destination.
Exploring the UK’s global appeal
Why is this the case? Well, on top of the potential for capital growth and rental yields that buy-to-let assets can provide, it is a famously desirable place to work, live and visit.
Indeed, the UK’s rich cultural heritage has long been a draw for overseas buyers. Beyond its historical appeal, the country is renowned for its transparent legal framework and stable political system, offering investors – particularly those from countries facing economic or political uncertainty – a strong sense of security.
Furthermore, in spite of the periods of economic turbulence the UK has faced in recent years, it remains one of the world’s most resilient and reliable markets, further reinforcing its attractiveness as an investment destination.
For example, the latest Office for National Statistics data shows that the average price of a property grew by 4.6 per cent in the year to December 2024 to reach £268,000 – almost £100,000 higher than the average price a decade ago (£176,000 in December 2014). Meanwhile, between 2013-14 and 2023-24 average rental prices rose from £176 to £237 per week – a 34 per cent increase.
Considering the challenges of this period – Brexit, the pandemic, the cost of living crisis, and various economic and political uncertainties – such growth is remarkable. With the economic climate improving and a new government in place, the prospects for further expansion look promising.
It’s no surprise, then, that investors around the world continue to view the UK as a prime place to make property investments.
Brokers need help to manage needs
Despite the significant demand coming from overseas investors, 62 per cent of UK mortgage brokers reported that too few lenders cater to non-UK borrowers, mainly because mainstream lenders are hesitant to finance international clients due to issues like the absence of a UK credit score or verifiable income history.
Moreover, 66 per cent of brokers report that borrowers require more guidance on changes in recent tax and regulatory changes, such as higher stamp duty surcharges, and stricter energy performance certificate requirements.
These shifts, combined with the renters’ rights bill and the uncertain nature of non-dom status reforms, are creating additional challenges for brokers and their overseas clients.
Therefore, lenders need to help brokers access flexible solutions and comprehensive support in navigating the complex regulatory landscape.
Developing expertise in international markets and understanding the unique financial profiles of emerging global middle-class investors will be crucial to meeting their evolving needs, and will ultimately lead to an uptick in market activity across the UK’s property sector.
Tim Parkes is chief executive of Raw Capital Partners