Forget about higher stamp duty and capital gains liabilities, investors from Russia, the Middle East and the Far East especially are homing in on the UK and London in particular. Some of the attraction comes from the fact that expensive homes have fallen in value, which for an overseas buyer comes on top of sterling weakness. So, it’s good news at the Treasury because in the past year the percentage of stamp duty income gathered from second home buyers in this price bracket has jumped from just under 30 per cent to 50 per cent. In fact, income generated through the additional 3 per cent stamp duty has risen by over 20 per cent in 2018 so far to over £4bn. And if you include houses in all price brackets, over 40 per cent of total receipts came from second home purchases.
London has always been seen as a handy place to park funds because it is relatively safe both politically and economically. But these funds are also being put to work because three-quarters of overseas purchases were made for buy-to-let. More than a quarter of second homes worth over £1m were bought in London, with the largest amount of stamp duty generated in Westminster at £594m.