From California to the Cotswolds: why Americans are investing in UK property

The American couple were delighted to acquire a large, traditional Cotswold stone house with significant grounds, just a short drive from the Daylesford Organic farm shop and Soho Farmhouse. A favourable exchange rate meant a de facto discount on the £8 million sale price. But the main driver of their decision? Their close friends had recently purchased a home in the same village. 

“Over the past couple of years, the volume of our work coming from American clients has doubled if not tripled,” says Saskia Arthur, Partner and Head of Residential Property at Boodle Hatfield. This surge of investment in UK property is arriving from California and wealthier areas of the East Coast – particularly New York, which Saskia and Immigration Partner Zoe Jacob now visit twice a year to talk potential clients through their options.

“Whether or not they are moving full time, a lot of wealthy US people are buying property because they would like a foothold here. Historically we have always seen an interest from US buyers. Increasingly US investors looking to diversify their assets view the UK as a safe and stable country with a strong rule of law. Current pricing in prime markets and a relatively weak pound against the dollar make the UK a good investment opportunity and has been cited by clients as a reason for buying both holiday homes, or somewhere with a long-term view to potentially settling here or spending longer periods of time here.” Saskia explains.

Drivers are different for each client, but “One client said they settled on London as being a nice place to invest in Europe. They bought a holiday home in Notting Hill, and consulted our tax team to ensure they don’t spend too many days here and trigger UK tax residency. London is certainly a buyer’s market, and we do encourage our clients to work with a buying agent to negotiate even better value,” says Residential Property Partner Edward Allan.

According to Zoe Jacob, a large demographic arriving is families with young children, working in the financial services or tech sectors, or creative fields such as film and music. “We particularly see a lot of people in tech, because of the UK’s strong tech sector – though they aren’t coming for specific job opportunities. They’re coming because they are concerned about things that are happening at home, like gun crime, and climate change on the West Coast including the California fires,” she says.

We are seeing investment into the UK by US companies too and this is likewise bringing increased interest in UK property.

The UK also has a number of pull factors for Americans: notably its world-class education system, rich culture and history, abundant green spaces and the lack of a language barrier. “Schooling has been a major factor for many high-profile families relocating in the past few years,” Ed says. “We worked with one very high-profile couple last year whose children were about to go to school, which prompted them to ask, do we want them in school in the States or is it time to move to Europe? For them, the key drivers were quality of life, the quality of schools in the UK and feeling their children were safe.”

Immigration advice is a key part of Boodle Hatfield’s offering, with Zoe and her team on hand to support anyone considering a purchase or move. “The first thing I want to understand is who’s coming to the UK and why,” says Zoe. “Why do you want to come, what are your priorities in terms of work and study, and how many days will you spend here each year?”

As US citizens are non-visa nationals, some clients’ plans may fall within visit visa parameters, with the firm able to provide a comfort letter for them to produce if any questions are asked on arrival. Others may have a UK passport, or eligibility to acquire one through their ancestry, and to apply for a spouse visa for their partner.

For those who require a visa, the firm offers a white-glove service, handling the fast-track process from start to finish, with a positive result usually arriving within a week or two of the application being made. “Most of our American clients arrive on global talent visas or innovator founder visas,” says Zoe. “We work with them to make sure they meet the requirements, for example that a founder’s business is ready for endorsement in the UK. For clients who travel a lot, we will monitor that closely so they don’t break their continuous residence.”

Colleagues who specialise in areas such as tax, trusts and estate planning can also step in to advise on more complex situations, such as a case in which the heir to a landed estate wanted to return to the UK with his American wife and children, but wasn’t able to meet the financial requirements due to his assets being held in trust.

US citizens find that the UK property sector operates along broadly familiar principles; while the concept of only owning a lease for a fixed period of time that applies to all desirable London apartment blocks sometimes raises eyebrows and questions, the system is stable and well tested.

According to Saskia Arthur, the most significant difference is around how property is to be held. “In the US, it’s standard practice for high-profile or high net worth individuals to set up an LLC, which provides both protection and anonymity. It comes as a surprise to my US clients that setting up an equivalent limited liability company or buying in an LLC is not tax efficient in the UK and that it does not offer the same benefits as in the US given the information available to anyone on ownership of companies and in trust registers”.

Most clients purchasing property will benefit from a conversation with the Boodle Hatfield tax team, whose transatlantic expertise can help to ensure their new acquisition dovetails with their US setup. Meanwhile, the proposed annual “mansion tax” that will apply to properties valued at over £2 million from 2029 is far lower than a client would pay in California or New York.

Once they arrive, Americans tend to settle well into UK life, whether in London or the English countryside. While there will always be ups and downs – a disappointing concierge service, or an application to an elite school being rejected – Zoe can recall only one client who opted (for professional reasons) to leave when his three-year visa expired.

“What we’re seeing now is that things start to snowball,” says Ed. “Once people start investing, others in their circle follow suit.” Indeed, the couple who followed their friends to the Cotswolds have never looked back – and are now searching for a house in London.