Why More UK HNW and UHNW Investors Are Buying Property Abroad in 2024

Key Facts and Figures

• Global Real Estate Allocation: On average, 32% of European UHNWIs’ wealth is allocated to primary and secondary homes, with the figure rising to 59% in Austria and 42% in Italy ​(Knight Frank
• ‍UK Millionaire Outflows: In 2023, the UK saw a net outflow of 3,200 millionaires, the third highest globally, driven by rising taxes and political uncertainty ​(Find a Wealth Manager)‍
• Golden Visa Popularity: Portugal, Spain, and Greece offer attractive Golden Visa programs, with investments starting at €280,000 (Portugal) and €500,000 (Spain). These programs offer residency, visa-free travel in the Schengen Area, and tax exemptions on foreign income​(Find a Wealth Manager)‍
• Top Destinations: The most favored property destinations for UK HNW and UHNW investors include Portugal, Spain, the UAE, the US, and France​(Knight Frank)‍
• Property Market Growth: Prime residential property prices saw significant growth in 2022 in key markets such as the Algarve (15.3%), Athens (13%), and Prague (16.3%)​(Knight Frank)‍
• Residency Demand: Around 12% of European UHNWIs plan to apply for a second passport or new citizenship in 2023, with Austria and Switzerland leading this trend​(Knight Frank)

Economic and Portfolio Diversification

One of the main motivations for UK investors buying property abroad is diversification. As the UK’s economic landscape continues to experience volatility—partly due to inflation, rising interest rates, and the lingering effects of Brexit—international real estate provides a safeguard. The global property market presents a way for HNW and UHNW individuals to hedge against domestic risks. According to the 2023 Wealth Report, 29% of European UHNW individuals already own homes abroad, underscoring the widespread appeal of overseas property as a stable asset class.

Furthermore, currency movements have made international property even more attractive. The weakening of the British pound since Brexit allows UK investors to acquire foreign assets at more favorable exchange rates, especially in regions where local currencies are stronger​.

Political Uncertainty and Tax Efficiency

Political instability in the UK, including uncertainties surrounding tax policies, has encouraged many affluent individuals to look for safer and more tax-efficient havens. In 2023 alone, the UK saw a net outflow of 3,200 millionaires—the third highest globally—due to concerns over rising tax burdens on property, capital gains, and inheritance​. Changes to stamp duty and property tax laws, including the 3% surcharge on second homes, have made property investment less favorable domestically.

Countries like Portugal, Spain, and Greece, with their "Golden Visa" programs, offer attractive tax regimes that appeal to UK investors. These programs allow individuals to gain residency (and in some cases, citizenship) through substantial real estate investments, often with the added benefit of tax exemptions on foreign-sourced income.

Lifestyle Appeal: Post-Pandemic Priorities

The COVID-19 pandemic has fundamentally changed how investors view property, with many seeking homes in locations that offer better lifestyles and more space. Countries like Portugal, Spain, and France have seen increased interest from UK buyers who desire a more relaxed lifestyle, favorable climates, and access to high-quality healthcare and education. For instance, Portugal’s Algarve region saw property price growth of 15.3% in 2022, driven largely by international buyers​.

Remote working has also made owning a second home abroad more viable, as HNW and UHNW individuals no longer need to be tethered to a single location. Coastal properties in Southern Europe, beachfront villas in Dubai, and luxury apartments in cities like New York and Singapore are highly sought after by UK investors looking for a blend of lifestyle and business connectivity​.

Golden Visa Programs and Residency by Investment

Golden Visa programs continue to be a major draw for UK investors, especially as they offer an attractive combination of residency, mobility, and tax benefits. Countries like Portugal, Spain, and Greece have structured their programs to attract affluent foreign investors. In Portugal, for example, a property investment of at least €500,000 can secure residency, along with access to the Schengen Area, which has become particularly valuable for UK investors post-Brexit​.

The UAE has also become a popular destination for UK millionaires due to its Golden Visa scheme, which offers long-term residency through property investment and attractive tax incentives​.

Opportunities in Emerging Markets

While traditional markets in Europe and the US remain popular, UK investors are increasingly looking toward emerging markets for higher returns. Countries such as Vietnam and Mexico offer lower entry costs and significant growth potential, making them appealing options for forward-thinking investors.

Our take

As UK HNW and UHNW investors navigate an increasingly complex global landscape, international property has emerged as a key part of their wealth management strategies. Whether motivated by economic factors, tax advantages, lifestyle improvements, or the lure of residency programs, it’s clear that the trend of UK investors buying property abroad is set to continue well into 2024 and beyond.