The total value of UK residential mortgages worth more than £5m taken out over the last year has increased by 22% to £3bn in 2024, up from £2.5bn in 2023, says Lubbock Fine Wealth Management, the wealth management arm of chartered accountants and business advisers Lubbock Fine.
Lubbock Fine says that this increase is partly being driven by high-earning UK residents taking out mortgages to buy prime luxury properties put on the market by former non-domiciled taxpayers (non-doms) relocating abroad.
Former non-doms have been relocating abroad following tax changes in last year’s Autumn Budget which scrapped the non-dom regime. As of April 6 2025, non-doms will now pay tax in the UK on income earned overseas. Many non-doms are relocating to Dubai, Portugal, Italy and the US, where tax regimes are more favourable for wealthy foreign residents.
The number of new sales instructions in the first six months of the year in prime central London (PCL) was 32% higher than the five-year average (excluding 2020), Knight Frank data shows.
Many UK buyers of the prime properties being sold by departing non-doms require finance to acquire these prime and super-prime properties.
Says Andrew Noton, Partner at Lubbock Fine: “With more non-doms leaving the UK market a significant number of new prime properties have been added to the market. Wealthy UK residents are now seizing the opportunity to snap up those properties and move up the property ladder.”
“These wealthy UK buyers are most often using mortgages – rather than cash – to fund purchases. They either prefer to or need to borrow the sums required rather than sell their down some of their other investments or they have to fund the purchases from future income.”
“Non-doms on the other hand more frequently paid in cash.”
“Not all of the non-doms leaving the UK are selling their properties, many are keeping them and renting them. The UK property market is seen as much more stable than many overseas residential property markets.”
Noton also highlights the introduction of the Foreign Income and Gains (FIG) regime which came into effect on April 6 2025, replacing the remittance basis. Noton explains that HNWs coming to UK to take advantage of the FIG regime aren’t purchasing super prime properties.
Under the remittance basis, UK residents only paid tax on foreign income and gains if it was brought to the UK. Under the new FIG regime, new UK tax residents won’t pay tax on foreign income and gains for the first four years of their residency, regardless of whether the income is brought into the UK.
Adds Noton: “The new FIG tax treatment is very attractive to overseas wealthy individuals. These individuals have substantial buying power, but they are primarily opting to rent first – rather than committing to high value property purchases.”
*Source: FCA. Year-end December 31
